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Authors: Ronald Bailey
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2001âs Hubbertâs Peak: The Impending World Oil Shortage and 2005âs Beyond Oil: The View from Hubbertâs Peak, had already predicted that the peak of global oil production would occur on Thanksgiving 2005.
Deffeyes was far from alone. Houston investment banker Matthew Simmons stated in his 2005 book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that the Saudi Arabians were lying about the size of their petroleum reserves, claiming that they are really running on empty. In September 2005 Simmons announced that âwe could be looking at $10-a-gallon gas this winter.â The price of gasoline in December 2005 was about $2.25 per gallon.
In a 2005 bet consciously modeled on the Simon-Ehrlich bet, New York Times columnist John Tierney and peak oil proponent Matthew Simmons wagered $5,000 on whether the price of oil in 2010 would average above $200 per barrel. When the bet was made, the price was $65 per barrel. When the bet was settled on January 1, 2011, the price of oil had increased to a 2010 average of $71 per barrel.
Colin Campbell, a former petroleum geologist who founded the Association for the Study of Peak Oil and Gas, had warned way back in 2002 that we were headed for peak oil production, and that this would lead to âwar, starvation, economic recession, possibly even the extinction of homo sapiens.â In his 2004 book Out of Gas: The End of the Age of Oil, the Caltech physicist David Goodstein wrote that the peak of world production was imminent and that âwe can, all too easily, envision a dying civilization, the landscape littered with the rusting hulks of SUVs.â Jim Motavalli, then editor of the environmentalist magazine E, wrote in the January/February 2006 issue: âIt is impossible to escape the conclusion that weâre steaming full speed ahead into a train wreck of monumental proportions.â
And James Schlesinger, the countryâs first secretary of energy, declared in the Winter 2005â06 issue of the neoconservative foreign policy journal The National Interest that âa growing consensus accepts that the peak is not that far off.â He added, âThe inability readily to expand the supply of oil, given rising demand, will in the future impose a severe economic shock.â A 2007 report by the German think tank Energy Watch Group (EWG) concluded that the world had reached the peak of oil production in 2006 and that supplies would fall from about 81 million barrels per day to just 39 million by 2030. âThe world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life,â declared EWG founder J ö rg Schindler. This fast onset of oil supply shortfalls, warns the EWG report, could trigger the âmeltdown of society.â As the price of petroleum ascended in July 2008 to $147 per barrel, an analysis released by the investment firm Goldman Sachs suggested that oil prices might soar to $200 per barrel. That did not happen. In fact, by the end of 2008, the price of oil had fallen to $34 per barrel.
Most of the petro-doomsters base their forecasts on the work of the geologist M. King Hubbert, who correctly predicted in 1956 that US domestic oil production in the lower forty-eight states would peak around 1970. In fact, US production did reach 9.6 million barrels per day in 1970 and then began declining. In 1969, Hubbert predicted that world oil production would peak around 2000.
Hubbertâs Peak
Hubbert argued that oil production grows until half the recoverable resources in a field have been extracted, after which production falls off at essentially the same rate at which it expanded. This theory suggests a bell-shaped curve rising from first discovery to peak and descending to depletion. Hubbert calculated that peak oil production follows peak oil discovery with a time lag.
Deffeyes was far from alone. Houston investment banker Matthew Simmons stated in his 2005 book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy that the Saudi Arabians were lying about the size of their petroleum reserves, claiming that they are really running on empty. In September 2005 Simmons announced that âwe could be looking at $10-a-gallon gas this winter.â The price of gasoline in December 2005 was about $2.25 per gallon.
In a 2005 bet consciously modeled on the Simon-Ehrlich bet, New York Times columnist John Tierney and peak oil proponent Matthew Simmons wagered $5,000 on whether the price of oil in 2010 would average above $200 per barrel. When the bet was made, the price was $65 per barrel. When the bet was settled on January 1, 2011, the price of oil had increased to a 2010 average of $71 per barrel.
Colin Campbell, a former petroleum geologist who founded the Association for the Study of Peak Oil and Gas, had warned way back in 2002 that we were headed for peak oil production, and that this would lead to âwar, starvation, economic recession, possibly even the extinction of homo sapiens.â In his 2004 book Out of Gas: The End of the Age of Oil, the Caltech physicist David Goodstein wrote that the peak of world production was imminent and that âwe can, all too easily, envision a dying civilization, the landscape littered with the rusting hulks of SUVs.â Jim Motavalli, then editor of the environmentalist magazine E, wrote in the January/February 2006 issue: âIt is impossible to escape the conclusion that weâre steaming full speed ahead into a train wreck of monumental proportions.â
And James Schlesinger, the countryâs first secretary of energy, declared in the Winter 2005â06 issue of the neoconservative foreign policy journal The National Interest that âa growing consensus accepts that the peak is not that far off.â He added, âThe inability readily to expand the supply of oil, given rising demand, will in the future impose a severe economic shock.â A 2007 report by the German think tank Energy Watch Group (EWG) concluded that the world had reached the peak of oil production in 2006 and that supplies would fall from about 81 million barrels per day to just 39 million by 2030. âThe world is at the beginning of a structural change of its economic system. This change will be triggered by declining fossil fuel supplies and will influence almost all aspects of our daily life,â declared EWG founder J ö rg Schindler. This fast onset of oil supply shortfalls, warns the EWG report, could trigger the âmeltdown of society.â As the price of petroleum ascended in July 2008 to $147 per barrel, an analysis released by the investment firm Goldman Sachs suggested that oil prices might soar to $200 per barrel. That did not happen. In fact, by the end of 2008, the price of oil had fallen to $34 per barrel.
Most of the petro-doomsters base their forecasts on the work of the geologist M. King Hubbert, who correctly predicted in 1956 that US domestic oil production in the lower forty-eight states would peak around 1970. In fact, US production did reach 9.6 million barrels per day in 1970 and then began declining. In 1969, Hubbert predicted that world oil production would peak around 2000.
Hubbertâs Peak
Hubbert argued that oil production grows until half the recoverable resources in a field have been extracted, after which production falls off at essentially the same rate at which it expanded. This theory suggests a bell-shaped curve rising from first discovery to peak and descending to depletion. Hubbert calculated that peak oil production follows peak oil discovery with a time lag.
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