The Hubbert Peak Oil Production Theory
Michalis 'BIG Mike' Kotzakolios


Defined Tag: Peak Oil Production.

What is the Hubbert Peak Oil Production Theory? Basically, it postulates that oil production will follow a distinct, recognizable, and predictable pattern, rather than a completely unpredictable pattern that cannot reasonably be described. Specifically, the Hubbert Theory suggests that oil will first be discovered (or a new extraction technique will be discovered). Immediately following this, extraction (production) will begin slowly. As technology and approach improves, extraction will rapidly accelerate until it reaches the top of the curve. Once it does this, it will quickly begin to decline until it eventually tapers off to little or no production.

M.K. Hubbert, a geophysicist, created this method of estimating an oil reserve's oil production capacity. The fundamental aspect of peak oil is that there is a finite amount of oil in the ground. In other words, he stated that the world's supply of crude oil is exhaustible. Oil companies continue to use the concept of Peak Oil, although this theory was not met with immediate approval from Hubbert's peers. Apparently it has proven remarkably accurate in predicting production rates, the time an oil reserve will last, and what the peak production rate will be.

The Peak Oil curve has a given equation and parameters. When the curve is applied to several production parameters, the production and lifetime of the oil field can be estimated. The total length of time that the oil field will be viable can be predicted. The production rates can also be estimated. The equation provides a guess at the maximum oil production possible from an area. Finally, the area under the curve is a calculation of the total barrels of oil available from an oil site. Of course, predictions will become more accurate when those making them have access to more data.

In general, the Hubbert Theory of peak oil production has been surprisingly accurate time and time again following oil exploration. And if we extrapolate this successful theory and use it to assess oil production as a whole, it would tend to predict that the peak is close indeed. If this is the case, then we can expect that only hard oil will be available in the future, which means production will become increasingly more expensive.