Critique
Few would deny that fossil fuels are finite and that alternative energy sources must be found in the future. Most critics instead argue that the peak will not occur soon and that the form of the peak may be irregular and extended rather than a sharp logistic curve peak.
In 1971, Hubbert used high and low estimates of global oil reserve data to predict that global oil production would peak between 1995 and 2000. This peak did not occur. However, it should be noted that other events that occurred after Hubbert's prediction may have delayed the peak, especially the 1973 energy crisis, in which a decreased supply of oil resulted in a shortage, and ultimately less consumption. The 1979 energy crisis and 1990 spike in the price of oil due to the Gulf War have had similar, albeit less dramatic effects on supply. On the demand side, recessions in the early 1980's and 90's have decreased the demand and consumption of oil. All of these effects would theoretically delay peak oil.
The implications of the model are controversial. Some petroleum economists, such as Michael Lynch, argue [3] that the Hubbert curve with a sharp peak is inapplicable globally due to the differences in oil reserves, political and military leverage, demand, and trade partnerships between countries and regions.
The United States Geological Survey estimates [4] that there are enough petroleum reserves to continue current production rates for 50 to 100 years. A year 2000 USGS study of world-wide oil reserves predicted a possible peak in oil production around the year 2037. That is countered by an important Saudi oil industry insider who says the American government's forecast for future oil supply is a "dangerous over-estimate."[5] Campbell argues that the USGS estimates are methodologically flawed. One problem, for example, is that OPEC countries overestimate their reserves to get higher oil quotas and to avoid internal critique. Population and economic growth may lead to increased energy consumption in the future.
Further, the USGS reserve estimate appears to owe as much to politics as to research. According to the Energy Information Administration of the United States Department of Energy, "estimates are based on non-technical considerations that support domestic supply growth to the levels necessary to meet projected demand levels. [emphasis added]" (Annual Energy Outlook 1998 With Projections to 2020).
Critics such as Leonardo Maugeri point out that Hubbert peak supporters such as Campbell previously predicted a peak in global oil production in both 1989 and 1995, based on oil production data available at that time. He claims that nearly all of the estimates do not take into account non-conventional oil even though the availability of these resources is huge and the costs of extraction, while still very high, are falling due to improved technology. (A drawback to this position is that heavy oil sources will never be as profitable as current light oil sources, both in production rates and energy gain.) Furthermore, he notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today due to new technology and predicts this trend will continue. According to Maugeri, the ratio between proven oil reserves and current production has constantly improved, passing from 20 years in 1948 to 35 years in 1972 and reaching about 40 years in 2003. Also according to Maugeri, these improvements occurred even with low investment in new exploration and upgrading technology due to the low oil prices during the last 20 years. The current higher oil prices may well cause increased investment (Maugeri, 2004).
According to professor James H. L. Lawler, a modular plant, integrating several well proven technologies into a new system, could recover almost all the oil left from primary and secondary recovery, while at present economic recovery, only half of the oil or less is being recovered from a reservoir. [6] Thus, the world's reserves of oil could virtually double in a stroke. His process promises a recovery rate in excess of 95%, though consuming about 3% of total initial reserves for operating energy requirements. Therefore, massive additional amounts of oil could come from already known sites.
There are many other attempts to predict oil production. One example is that the global conventional oil production will peak somewhere between 2020 and 2050, but that the output is likely to increase at a substantially slower rate after 2020. A continued rapid increase in oil production requires an increased exploitation of non-conventional sources (Greene, 2003).
As of June 2005, OPEC has admitted that they will 'struggle' to pump enough oil to meet pricing pressures for the fourth quarter of the year. It is expected that the summer and winter of 2005 will bring oil prices to a new high; some would say this is a prime example of demand starting to outstrip supply. Others could blame it on various geopolitical forces in the regions where oil is produced. One other explanation for the rising oil prices is that it is a sign of too much paper money and not too little oil. In this view, dramatically higher prices of all commodities and U.S. real estate indicates rising inflation.
