Peak Oil is the theory that oil as a finite natural resource will come to a point after which we will no longer be able to extract the same amount or increase extraction. At that point oil becomes more expensive. Our world economy is built on the availability of cheap oil. In an energy hungry world for the economy to continue growth we must be able to increase the amount of energy available.
Oil has to be found before it can be extracted. To remain even, discovery has to match consumption. All of the giant oil fields have been found. Burgan in Kuwait was located in 1930’s. Ghawar in Saudi Arabia was first drilled in the 1940’s. Oil discovery reached its peak in the 1960’s and has been declining ever since. Consumption increases about 2 ½ percent a year. The chart is nasty looking as the consumption line rises away from the discovery graph.
The story can be told through the life and death of an oil well. Oil can only created between 5000 and 17000 feet underground. Go deeper and the heat turns it to natural gas. Go higher and it is too cool to create oil. After it is formed sometimes the oil is pushed to deeper depths by plate tectonics. Oil deposits are discovered in many ways but all are verified by test drilling. Once a field is discovered multiple oil wells are drilled so the field can be emptied as fast as possible. Oil Companies do this to make as much money as possible. Because there is a finite amount of oil in the ground at some point the pressure drops and extraction rate decreases. The extraction rate can be graphed as it quickly increases, plateau’s off and then decreases. In 1958 Standard Oil Geologist M. King Hubbert used a mathematical model of the extraction rate for all wells of a field and created a bell curve (Hubbert’s Curve) for the field.
Hubbert also plugged the U.S. into the Curve formula and predicted that in 1970 the US would hit its peak extraction and begin to decline. His colleagues laughed at him. In 1970 the United States hit the high point of its oil extraction and began to decline. The thirst for oil had not slackened so the U.S. began to increase imports. From 1970 until now the U.S. consumption has increased each year except the oil embargo years of 1973 and 1978 – 1979. 70% of the oil consumed in the U.S. today is extracted in other countries. Where does it come from? Canada 18%, Mexico 15%, Nigeria 12%, Saudi Arabia 12%, Venezuela 10%, Angola 6%, Iraq 5%, Algeria 3%, Colombia 3%, Ecuador 3%, United Kingdom and Kuwait 2%, Norway and Equatorial Guinea 1%.
Add all the oil wells for a particular field and you get an extraction curve for the life of the field. Add all the oil wells up in the world and get the extraction curve for the planet. Most of the world’s giant oil fields have hit their peak except for Ghawar in Saudi Arabia. Once Saudi Arabia hits its peak, the world will hit its peak
Through the years oil extraction technology has increased the amount recovered. New technologies like deep water drilling shows how desperate they are to claim all the oil possible. When the pressure begins to drop they use a technique called pressure filling. Pressure filling is pumping seawater into a well in the same field to maintain oil pressure in the other wells. They use horizontal drilling to get the oil trapped in rock cracks the pressure could not push out. These technologies are sopping up the last drops from dying wells.
Peak oil is important because as the world peak of extraction is crossed supplies become tighter and prices rise. The first half of the extraction hill was the ready to refine “light sweet” crude. The last part of oil becomes more sulphur laced “sour” crude. “Sour” crude takes longer and cost more to refine driving the prices even higher. Just like in early 2008 some southern U.S. gas stations will not receive gas and the gas lines of the 1970’s returns. The next step of the supply shortage is World War II gas rationing. The government printed gas coupons for the 1973 embargo also but never used them.
Wal-Mart’s distribution network is built on cheap oil. As prices increase the prices go up. People shop less and do without. The trucks will be fewer and then stop. The shelves will empty and the Wal-Marts will close. Unemployment will sky rocket. There will be an economic collapse.
Like grainy black and white photos from the 1930’s in the cities soup kitchens will open and bread lines will form. There will be food shortages in the cities. Every town in America had food riots at some time during the Great Depression in the 1930’s. There will be brown outs, rolling power outages and finally the power will go off forever. The government will slow down and then shutdown as workers who aren’t paid quit going to work. The government will impose martial law in the beginning but as the riots continue law enforcement and soldiers will stay home and defend their families. The strong and evil will prey of the weak. It will be a time of anarchy.
Peak oil is the end of the world, as we know it. C.J. Campbell oil investor said, “The economic prosperity of the 20th Century was driven by cheap, oil-based energy.”
Will there be a happy ending? Yes! But it takes planning and preparation
Read The Deep Hot Biosphere for a different perspective. Hubbert is considered an “eco-radical” by some.
There are no serious geologists that believe this theory. Just him and a few of the out there ones in Russia. Geologists figured out a long time ago that it comes from plant and animal matter from millions of years ago not created by natural geologic action of the earth. If any of his theory could be proven it eventually will be, but no one is trying to prove it.
Who considers Hubbert an eco radical? Thomas Gold? Anyone who does no believe in Peak Oil, I guess.
Be like the boy scouts and be prepared or don’t.