Peak oil
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Peak oil is the point when global oil production reaches its maximum rate, after which it will begin to decline irreversibly.<ref>Template:Cite web</ref><ref>Template:Cite web</ref><ref>Template:Cite news</ref>Template:Request quotation The main concern is that global transportation relies heavily on gasoline and diesel. Adoption of electric vehicles, biofuels, or more efficient transport (like trains and waterways) could help reduce oil demand.<ref name=":1">Template:Cite web</ref>
Peak oil relates closely to oil depletion; while petroleum reserves are finite, the key issue is the economic viability of extraction at current prices.<ref name=":2">Template:Cite web</ref><ref>Template:Cite web</ref> Initially, it was believed that oil production would decline due to reserve depletion, but a new theory suggests that reduced oil demand could lower prices, affecting extraction costs. Demand may also decline due to persistent high prices.<ref name=":2" /><ref name="Parisbas">Template:Cite web</ref>
Over the last century, many predictions of peak oil timing have been made, often later proven incorrect due to increased extraction rates.<ref>Kenneth S. Deffeyes, Hubbert's Peak: The Impending World Oil Shortage (Princeton University Press, 2001).</ref> M. King Hubbert introduced comprehensive modeling of peak oil in a 1956 paper, predicting U.S. production would peak between 1965 and 1971, but his global peak oil predictions were premature because of improved drilling technology.<ref name="mkinghubbert19563">Template:Cite conference</ref> Current forecasts for the year of peak oil range from 2028 to 2050.<ref>Template:Cite web</ref> These estimates depend on future economic trends, technological advances, and efforts to mitigate climate change.<ref name="Parisbas" /><ref name=":3">Template:Cite web</ref><ref>Template:Cite web</ref>
Supply
Defining oil
Oil, or petroleum, is a mixture of hydrocarbon substances. By its very nature, what "oil" is may vary. The geology of a region affects the type of oil underground. The types of hydrocarbons produced from an oilfield may also vary depending on the geology.
Crude oil generally comes in various 'grades,'<ref>Template:Cite web</ref> commonly classified as "light," "medium," 'heavy," and "extra heavy."<ref>Template:Cite web</ref> The exact definitions of these grades vary depending on the region from which the oil came. Grades of oil are also assessed by API gravity. Light oil flows naturally to the surface or can be extracted by simply pumping it from the ground. Heavy refers to oil that has higher density and lower API gravity.<ref>Template:Cite web</ref> It does not flow as easily, and its consistency can be similar to that of molasses. While some of it can be produced using conventional techniques, recovery rates are better using unconventional methods.<ref>Template:Cite web</ref>
Generally, especially with regard to peak oil, the primary concern regards what is called "crude oil" production (which may also be referred to as "crude and condensate" production in US EIA statistics), which is what is actually refined into the common fuels most people know such as gasoline and diesel fuel, in addition to other common fuels. Other oil production statistics may be named "total liquids production" or "petroleum and other liquids" in EIA statistics.<ref>Template:Cite web</ref> This includes crude oil production in addition to other hydrocarbon liquids, such as natural-gas liquids (NGLs).<ref>Template:Cite web</ref> These two production numbers are distinct and shouldn't be considered the same thing. Using "total liquids" production to refer to "crude oil" production is misleading. The extra liquids included in "total liquids" production do not refine into the same products. It can be misleading as it could be used to inflate the actual amount of crude oil being produced globally.
Where oil may come from is commonly divided into two categories, "conventional" oil sources and "unconventional" oil sources. The terms are not strictly defined and may vary within literature. As a result of the wide range of potential definitions, different oil production forecasts may vary based on which classes of liquids they choose to include or exclude. Some standard definitions for "conventional" and "unconventional" oil are detailed below.
Conventional sources
Conventional oil is oil that is extracted using "traditional" techniques (i.e., in common use before 2000) techniques.<ref>Template:Cite web</ref> Conventional oil commonly refers to onshore oilfields and shallow offshore oilfields that are "easy" to extract.
It has been recognized that conventional oil production has peaked around 2005–2006.<ref>Template:Cite journal</ref><ref>Template:Citation</ref> What has prevented peak oil from then on is US tight oil production,<ref>Template:Cite web</ref> which rapidly increased since the 2008 financial crisis. Additionally, but to a lesser extent, Canadian oil-sands production has helped increase oil supply since 2008.<ref>Template:Cite web</ref>
In the same way, sources of natural gas production are usually divided into "conventional" and "unconventional".
Unconventional sources
Unlike conventional oil, unconventional oil refers to oil that is "difficult" to extract. The number of steps required translates into extremely high production costs. Common unconventional oil sources include:
- Tight oil refers to oil extracted from deposits of low-permeability rock using hydraulic fracturing techniques (commonly referred to as "fracking").<ref>Template:Cite web</ref> Hydraulic fracturing is a process where a well is first drilled and then fluid containing water, chemicals, and sand is injected at very high pressures to create fractures in the rock.<ref>Template:Cite web</ref> This process has generated controversy as fluid injections may trigger seismic activity, in addition to concerns regarding the chemicals used.<ref>Template:Cite news</ref> Additionally, tight oil is also commonly referred to as "shale oil" due to the oil often being in shale deposits. Due to this nickname, tight oil is often confused with oil shale, which is a different process of oil extraction. This process involves manufacturing oil from the kerogen contained in an oil shale.
- Oil sands are unconsolidated sandstone deposits containing large amounts of very viscous crude bitumen or extra-heavy crude oil that can be recovered by surface mining or by in-situ oil wells using steam injection or other techniques. It can be liquefied by upgrading, blending with diluent, or by heating; and then processed by a conventional oil refinery. The material found in oil sands is an extra-heavy and viscous form of oil known as bitumen.<ref>Template:Cite web</ref>
Other less common unconventional oil sources include oil shale (see article).
Production of tight oil is mainly concentrated in the United States due to world-class geology and ease of borrowing (tight oil production is extremely expensive).<ref>Template:Cite web</ref> Oil sands production is also concentrated in Canada for the same exact reasons (but different type of oil). There are also economic tight oil deposits in Argentina known as the Vaca Muerta Formation, but are less developed than tight oil in the US due to a lack of infrastructure and less capacity to borrow money.<ref>Template:Cite news</ref>
In recent history, production of tight oil led to a resurgence of US production in the 2010s. US tight oil production initially peaked in March 2015<ref>Template:Cite web</ref> and fell by 12 per cent over the next 18 months; but then production rose again, and by September 2017 production had exceeded the old peak.<ref>US Energy Information Administration, Estimates of tight oil production, accessed 9 December 2017</ref> As of 2024, US oil production, especially tight oil production, is higher than ever thanks to the Permian Basin.
Venezuela has oil sands deposits similar in size to those of Canada, and approximately equal to the world's reserves of conventional oil. Venezuela's Orinoco Belt tar sands are less viscous than Canada's Athabasca oil sands – meaning they can be produced by more conventional means – but they are buried too deep to be extracted by surface mining. Estimates of the recoverable reserves of the Orinoco Belt range from Template:Convert to Template:Convert. In 2009, USGS updated this value to Template:Convert.<ref name="USGS Venezuela">Template:Cite web</ref>
While not an actual source of unconventional oil, processes which convert other hydrocarbons are similar to unconventional oil in that they are 'unconventional' and very costly to produce. They include coal liquefaction or gas to liquids which produce synthetic fuels from coal or natural gas via the Fischer–Tropsch process, Bergius process, or Karrick process.
Discoveries
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Global discoveries of oilfields peaked in the 1960s<ref name="campbell1222000">Template:Cite web</ref> at around Template:Convert per year.<ref name="longwell2002">Template:Cite journal</ref> More recently, 2021 was the worst year for oil and gas discoveries dating back to 1946.<ref name=":5">Template:Cite web</ref> This is to be expected of a finite resource. But despite the fall-off in new field discoveries, the reported proved reserves of crude oil remaining in the ground in 2014, which totaled 1,490 billion barrels, were more than quadruple the 1965 proved reserves of 354 billion barrels.<ref>OPEC, Annual Statistical/ Annual Statistical Bulletin 2014 Template:Webarchive.</ref> A researcher for the U.S. Energy Information Administration has pointed out that after the first wave of discoveries in an area, most oil and natural gas reserve growth comes not from discoveries of new fields, but from extensions and additional gas found within existing fields.<ref>David F. Morehouse, The intricate puzzle of oil and gas reserve growth Template:Webarchive, US Energy Information Administration, Natural Gas Monthly, July 1997.</ref>
A report by the UK Energy Research Centre noted that "discovery" is often used ambiguously, and explained the seeming contradiction between falling discovery rates since the 1960s and increasing reserves by the phenomenon of reserve growth. The report noted that increased reserves within a field may be discovered or developed by new technology years or decades after the original discovery. But because of the practice of "backdating", any new reserves within a field, even those to be discovered decades after the field discovery, are attributed to the year of initial field discovery, creating an illusion that discovery is not keeping pace with production.<ref>Steve Sorrell and others, Global Oil Depletion, UK Energy Research Centre, Template:ISBN, p. 24–25.</ref>
As of 2010, finding new oil had reportedly become much more difficult and expensive, as oil producers had to search through more remote and inhospitable parts of the planet.<ref>Template:Cite news</ref>
Oil reserves
Different classes of potential conventional crude oil reserves include crude oil with 90% certainty of being technically able to be produced from reservoirs (through a wellbore using primary, secondary, improved, enhanced, or tertiary methods); all crude with a 50% probability of being produced in the future (probable); and discovered reserves that have a 10% possibility of being produced in the future (possible). Reserve estimates based on these are referred to as 1P, proven (at least 90% probability); 2P, proven and probable (at least 50% probability); and 3P, proven, probable and possible (at least 10% probability), respectively.<ref>Template:Cite web</ref>
As stated previously, oil is divided up into different types, therefore those counting up reserves should keep that in mind. Conventional oil reserves are different than unconventional reserves.
Concerns over stated oil reserves
Sadad Al Husseini estimated that Template:Convert of the world's Template:Convert of proven reserves should be recategorized as speculative resources.<ref name="cohen102007">Template:Cite web</ref>
One difficulty in forecasting the date of peak oil is the opacity surrounding the oil reserves classified as "proven". In many major producing countries, the majority of reserves claims have not been subject to outside audit or examination.<ref name=":6">Template:Cite journal</ref>
For the most part, proven reserves are stated by the oil companies, the producer states and the consumer states. All three have reasons to overstate their proven reserves: oil companies may look to increase their potential worth; producer countries gain a stronger international stature; and governments of consumer countries may seek a means to foster sentiments of security and stability within their economies and among consumers.<ref name=":6" />
Major discrepancies arise from accuracy issues with the self-reported numbers from the Organization of the Petroleum Exporting Countries (OPEC). Besides the possibility that these nations have overstated their reserves for political reasons (during periods of no substantial discoveries), over 70 nations also follow a practice of not reducing their reserves to account for yearly production. Analysts have suggested that OPEC member nations have economic incentives to exaggerate their reserves, as the OPEC quota system allows greater output for countries with greater reserves.<ref name=":6" /><ref name="nyt08212005"> Template:Cite news</ref>
Reserves of unconventional oil
As conventional oil becomes less available, it can be replaced with production of liquids from unconventional sources such as tight oil, oil sands, ultra-heavy oils, gas-to-liquid technologies, coal-to-liquid technologies, biofuel technologies, and shale oil.<ref>IEO 2004 pg. 37</ref> In the 2007 and subsequent International Energy Outlook editions, the word "Oil" was replaced with "Liquids" in the chart of world energy consumption.<ref>IEO 2006 Figure 3. pg. 2</ref><ref>IEO 2007 Figure 3. pg. 2</ref> In 2009 biofuels was included in "Liquids" instead of in "Renewables".<ref>IEO 2009 Figure 2. pg. 1</ref> The inclusion of natural gas liquids, a bi-product of natural gas extraction, in "Liquids" has been criticized as it is mostly a chemical feedstock which is generally not used as transport fuel.<ref>Template:Cite web</ref>
Reserve estimates are based on profitability, which depends on both oil price and cost of production. Hence, unconventional sources such as heavy crude oil, oil sands, and oil shale may be included as new techniques reduce the cost of extraction.<ref>Template:Cite journal</ref> With rule changes by the SEC,<ref>Template:Cite web</ref> oil companies can now book them as proven reserves after opening a strip mine or thermal facility for extraction. These unconventional sources are more labor and resource intensive to produce, however, requiring extra energy to refine, resulting in higher production costs and up to three times more greenhouse gas emissions per barrel (or barrel equivalent) on a "well to tank" basis or 10 to 45% more on a "well to wheels" basis, which includes the carbon emitted from combustion of the final product.<ref name="MJ Herald">Template:Cite web</ref><ref>Template:Cite news</ref>
While the energy used, resources needed, and environmental effects of extracting unconventional sources have traditionally been prohibitively high, major unconventional oil sources being considered for large-scale production are the extra heavy oil in the Orinoco Belt of Venezuela,<ref>Template:Cite web</ref> the Athabasca Oil Sands in the Western Canadian Sedimentary Basin,<ref>Template:Cite web</ref> and the oil shale of the Green River Formation in Colorado, Utah, and Wyoming in the United States.<ref name="dyni">Template:Cite journal</ref><ref name="fossilenergy">Template:Cite journal</ref> Energy companies such as Syncrude and Suncor have been extracting bitumen for decades but production has increased greatly in recent years with the development of steam-assisted gravity drainage and other extraction technologies.<ref>Template:Cite journal</ref>
Chuck Masters of the USGS estimates that, "Taken together, these resource occurrences, in the Western Hemisphere, are approximately equal to the Identified Reserves of conventional crude oil accredited to the Middle East."<ref>Template:Cite web</ref> Authorities familiar with the resources believe that the world's ultimate reserves of unconventional oil are several times as large as those of conventional oil and will be highly profitable for companies as a result of higher prices in the 21st century.<ref>Template:Cite journal</ref> In October 2009, the USGS updated the Orinoco tar sands (Venezuela) recoverable "mean value" to Template:Convert, with a 90% chance of being within the range of 380-Template:Convert, making this area "one of the world's largest recoverable oil accumulations".<ref name="USGS Venezuela" />
Moreover, oil extracted from these sources typically contains contaminants such as sulfur and heavy metals that are energy-intensive to extract and can leave tailings, ponds containing hydrocarbon sludge, in some cases.<ref name="MJ Herald" /><ref>Template:Cite journal</ref> The same applies to much of the Middle East's undeveloped conventional oil reserves, much of which is heavy, viscous, and contaminated with sulfur and metals to the point of being unusable.<ref>Template:Cite journal</ref> However, high oil prices make these sources more financially appealing.<ref name="nyt08212005" /> A study by Wood Mackenzie suggests that by the early 2020s all the world's extra oil supply is likely to come from unconventional sources.<ref>Template:Cite news</ref>
Production
Globally, oil production is very concentrated. Not just geographically depending on the country, but depending on the oilfields themselves. As of 2014, it was recognized that 25 oilfields account for 25% of global oil production, and a few hundred 'giant' oilfields (reserves greater than 500 million barrels) account for 50% of global oil production.<ref name=":7">Template:Cite journal</ref><ref name=":8" /> Globally, the amount of oilfields is estimated to be between 50,000-70,000.<ref name=":7" /> Additionally, it has now been recognized that worldwide oil discoveries have been less than worldwide annual oil production since about 1980.<ref>Template:Cite web</ref><ref name=":5" />
More recently, there has been some research about the net energy of oil production.<ref name="L. Delannoy 2021">L. Delannoy et al., "Peak oil and the low-carbon energy transition: A net-energy perspective" Applied Energy, 2021, v.304, 117843.</ref> Regarding energy production, what also matters is the "Energy Return on Investment" (EROI). To put it simply, in order to produce energy one must also invest some energy, and the EROI is the return on investment in energy terms. With regards to conventional and unconventional oil, it is recognized that conventional oil offers a much higher EROI than unconventional sources of oil.<ref name="L. Delannoy 2021" /> In reality, the EROI is felt through the cost of production. A higher EROI generally translates to a lower cost of production and higher (monetary) profits for the oil company, and a lower EROI generally translates to a higher cost of production and lower (monetary) profits for the oil company. A higher energy investment means physically using more materials (which require energy to produce) in order to produce energy. Oil sources with a lower EROI are theoretically more environmentally damaging than those with higher EROIs, due to the larger amount of resources required to extract the oil.<ref>Template:Cite web</ref> For instance, building a gigantic oil rig produces a lot of greenhouse gas emissions, but is a requirement to access "difficult" deep water offshore oil reserves.
Oil field decline
As a finite resource, naturally every oilfield eventually declines. Generally, the production profile of a typical oil well is that first production increases, then it plateaus, and then it declines.<ref>Template:Cite web</ref> This is the underlying assumption of the Hubbert peak theory. The chart to the right shows the decline of Alaskan oil production since after the 1980s, which is reflective of a typical pattern of decline among most oilfields.
Meanwhile, unconventional oil production follows a different production profile depending on the type. For tight oil, production begins at its maximum, or near its maximum, and then quickly declines.<ref>Template:Cite web</ref>
As mentioned previously in the production section, oil production is very concentrated in a few fields, therefore these few fields (out of every field) can dictate where oil production would be headed. If these few fields were to decline, then all oil production would decline. In 2019 when Saudi Aramco went public, the Ghawar oilfield, which is the largest oil field in the world, was revealed to be producing much lower than what conventional wisdom at the time had assumed its production was.<ref>Template:Cite news</ref> Although while no official data exists, certain analysts believe that the Ghawar field has entered into decline,<ref>Template:Cite web</ref><ref>Template:Cite web</ref> corroborated by the aforementioned news from 2019.
According to the US EIA in 2006, Saudi Aramco Senior Vice President Abdullah Saif estimated that its existing fields were declining at a rate of 5% to 12% per year.<ref name="eiaSAbrief">Template:Cite web</ref> According to a study of large oilfields (reserves greater than 500 million barrels) published in 2009, the average decline rate of onshore fields was about 5%, and offshore fields were about 9.5%.<ref>Template:Cite journal</ref> An annual rate of decline of 5.1% in 800 of the world's largest oil fields was reported by the International Energy Agency in their World Energy Outlook 2008.<ref name="iea-weo08">Template:Cite journal</ref> In 2013 an informal study of 733 giant oil fields concluded that only 32% of the ultimately recoverable oil remained.<ref name="peakoilbarrel.com">Template:Cite web</ref>
Demand
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Peak oil demand
More recently, "peak oil demand" has become a more popular interpretation of peak oil. The International International Energy Agency (IEA) argues that the world will first intentionally reduce oil demand before supply issues actually become a problem, as to address climate change and greenhouse gas emissions.<ref>Template:Cite news</ref>
Unlike peak oil demand, peak oil generally is concerned with the global supply of oil, due to the importance of oil to the global economy.
The central idea revolves around technological advancements such as the development of electric vehicles and potentially biofuels in order to phase out gasoline or diesel powered vehicles. Then, in theory, oil demand would fall over time.<ref name=":1" />
In the past 4 decades, oil demand has secularly increased.<ref>Template:Cite web</ref> Generally, oil demand increases unless there is a recession. Recently, in 2020 oil demand sharply fell from 2019 levels due to the COVID-19 pandemic, but recovered swiftly by 2022.
In 2020, British Petroleum (BP) claimed that the world had hit peak oil demand, predicting that oil demand would never recover to pre-pandemic levels due to increased proliferation of electric vehicles and stronger action on climate change.<ref>Template:Cite web</ref>
As of 2023, new projections from Enverus Intelligence Research and the U.S. Energy Information Administration suggest that peak oil demand will not occur before 2030. Enverus forecasts global oil demand to reach 108 million barrels per day by 2030, driven by slower improvements in fuel economy and electric vehicle adoption in the U.S. Similarly, the EIA has updated its estimates, predicting global liquid fuels consumption will be 102.91 million barrels per day in 2024 and 104.26 million barrels per day in 2025, due to higher-than-expected non-OECD consumption. These updates indicate a continued increase in oil demand, potentially exceeding pre-pandemic levels.<ref>Template:Cite web</ref>
In 2024 OPEC suggested that global demand for oil will not decline.<ref>Template:Cite web</ref>
Oil as a component of energy demand
Energy demand is distributed amongst four broad sectors: transportation, residential, commercial, and industrial.<ref>Template:Cite web</ref> Oil demand primarily concerns the transportation sector, as 50% of oil use in OECD countries are for road transportation.<ref>Template:Cite web</ref> This is a result of the proliferation of vehicles powered by internal combustion engines. Transportation is therefore of particular interest to those seeking to mitigate the effects of peak oil.
As of 2023, it is forecasted by the IEA that 90% of global oil demand growth will come from the Asia-Pacific region.<ref>Template:Cite web</ref> As of 2022, China and India are the second and third largest oil consumers globally.<ref name=":9">Template:Cite web</ref> The United States is still the largest consumer of oil globally (as of 2022).<ref name=":9" />
Generally, when countries economically develop, they use more energy, which includes using more oil.<ref name=":10" /> In recent years, China surpassed the United States as the world's largest crude oil importer in 2015.<ref>Template:Cite magazine</ref> This was a result of China developing in addition to US oil exports decreasing due to increased US tight oil production.<ref>Template:Cite web</ref>
Economic growth
Some analysts argue that the cost of oil has a profound effect on economic growth due to its pivotal role in the extraction of resources and the processing, manufacturing, and transportation of goods.<ref name="How Economic Growth Fails">Template:Cite web</ref><ref name="How dependant is Growth from Primary Energy">Template:Cite web</ref> Comparing GDP and energy consumption, there is a clearly defined correlation between having a higher GDP, and having a higher energy consumption.<ref name=":10">Template:Cite web</ref> To some degree, this is an intuitive observation as those in very undeveloped countries use a small amount of energy (no electricity), meanwhile those in developed countries use a high amount of energy (electricity consumption, gasoline consumption), and this use of energy translates into economic activity.
There is a concern by more pessimistic analysts that assuming there was a dramatic spike in the price of oil, the world economy may be unable to pay for it, leading to a disconnect between the price of oil that oil producers need to maintain supply, and the price of oil consumers need to be able to afford things.<ref name="ourfiniteworld.com">Template:Cite web</ref> This has partially occurred in recent years with the dramatic run-up in oil prices during 2022<ref>Template:Cite web</ref> and then the release of the US Strategic Petroleum Reserve in 2022 in order to cool down oil prices.<ref>Template:Cite news</ref>
Possible consequences
Template:Further The wide use of fossil fuels has been one of the most important stimuli of economic growth and prosperity since the Industrial Revolution,<ref>Template:Cite journal</ref> allowing humans to participate in takedown, or the consumption of energy at a greater rate than it is being replaced. Some theorize that when oil production significantly decreases, human culture and modern technological society will be forced to change drastically. A rise in oil prices as a result of peak oil could severely impact the cost of transport, food, heating, and electricity globally. A recent example of this has been seen since Russia's invasion of Ukraine in 2022; a global spike in oil and energy prices exacerbated the global energy crisis (2021–present).
The impact of oil supply limitations, assuming they occur, will depend heavily on how severe the limitations are and the development and adoption of effective alternatives.
Possible long-term effects on human lifestyle
Commodity production is heavily globalized in 2024, with almost all major supply chains relying upon diesel fuel or heavy fuel oil to power almost all global shipping and aviation fuel to power all aircraft.<ref>Template:Cite web</ref> A study from the Geologic Survey of Finland found that 90% of the supply chain of all industrially manufactured products depend on oil derived services or oil derived products,<ref name=":8">Template:Cite journal</ref> and World Bank data shows over 30% of global GDP accounted for by exports of goods and services.<ref name="GDP">Template:Cite web</ref> Many countries with highly developed economies are dependent on food imports (for example, the United Kingdom produced just under half of domestic food consumption as of 2021<ref>Template:Cite web</ref>), meaning a disruption in trade due to peak oil would exacerbate food insecurity.
Since aviation relies mainly on jet fuels derived from crude oil, commercial aviation has been predicted to go into decline alongside global oil production as it would then become unaffordable for most people.<ref>Template:Cite web</ref> Alternatives such as electric aircraft show promise, but are yet to prove commercially viable as of 2024,<ref>Template:Cite news</ref> while hybrids approaches such as a 50% blend of aviation biofuel or utilising metal sails on cargo ships<ref>Template:Cite news</ref> still rely on oil.
Possible effects on agriculture
Template:See also Supplies of oil are absolutely critical to modern agriculture. Diesel fuel and agrichemicals such as pesticides and fertilizers are directly derived from hydrocarbons.<ref name=":4">Template:Cite journal</ref> According to Our World in Data, artificial fertilizers feed over 3.5 billion people as of 2015.<ref>Template:Cite web</ref>
The largest consumer of fossil fuels in modern agriculture is ammonia production for fertilizer via the Haber process,<ref name=":4" /> which is essential to high-yielding intensive agriculture. The specific fossil fuel input to fertilizer production is primarily natural gas, to provide hydrogen via steam reforming.
More recently, some theorize that hydrogen could be generated without the use of fossil fuels by using renewable electricity for electrolysis. But as of 2024, this remains commercially unviable.<ref>Template:Cite web</ref>
Possible mitigation
Template:See also In 2005, the United States Department of Energy published a report titled Peaking of World Oil Production: Impacts, Mitigation, & Risk Management.<ref name="hirsch_report">Template:Cite web</ref> Known as the Hirsch report, it stated, "The peaking of world oil production presents the U.S. and the world with an unprecedented risk management problem."<ref>Template:Cite web</ref> To avoid the serious social and economic implications a global decline in oil production could entail, the Hirsch report emphasized the need to find alternatives, at least ten to twenty years before the peak, and to phase out the use of oil over that time.<ref name="hirsch_report" /> This was similar to a plan proposed for Sweden that same year. Such mitigation could include energy conservation and fuel substitution. The timing of mitigation responses is critical. Premature initiation would be undesirable, but if initiated too late could be more costly and have more negative economic consequences.<ref>Template:Cite journal</ref>
The two major oil consumers, China (second globally) and India (third globally), are taking many steps not to increase their crude oil consumption by encouraging the renewable energy options.<ref>Template:Cite web</ref>
Methods that have been suggested for mitigating these urban and suburban issues include the use of non-petroleum vehicles such as electric vehicles, transit-oriented development, carfree cities, bicycles, light trains, smart growth, shared space, urban consolidation, urban villages, and New Urbanism.
An economic theory that has been proposed as a remedy is the introduction of a steady state economy. Such a system could include a tax shifting from income to depleting natural resources (and pollution), as well as the limitation of advertising that stimulates demand and population growth. It could also include the institution of policies that move away from globalization and toward localization to conserve energy resources, provide local jobs, and maintain local decision-making authority. Zoning policies could be adjusted to promote resource conservation and eliminate sprawl.<ref>Center for the Advancement of the Steady State Economy</ref><ref>Template:Cite web</ref>
Potential positive aspects
It is known that the combustion of fossil fuels emits greenhouse gases which cause climate change. Therefore, a reduction in oil use would be a net positive for the environment.
Permaculture sees peak oil as holding tremendous potential for positive change, assuming countries act with foresight. The rebuilding of local food networks, green energy production, and the general implementation of "energy descent culture" are argued to be ethical responses to the acknowledgment of finite fossil resources.<ref>Template:Cite web</ref>
The Transition Towns movement, started in Totnes, Devon<ref>Template:Cite web</ref> and spread internationally by "The Transition Handbook" (Rob Hopkins) and Transition Network, sees the restructuring of society for more local resilience and ecological stewardship as a natural response to the combination of peak oil and climate change.<ref>Template:Cite webTemplate:Cbignore</ref>
Predictions
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The idea that the rate of oil production would peak and irreversibly decline is an old one. In 1919, David White, chief geologist of the United States Geological Survey, wrote of US petroleum: "... the peak of production will soon be passed, possibly within 3 years."<ref name="David White 1919, p.227">David White, "The unmined supply of petroleum in the United States," Transactions of the Society of Automotive Engineers, 1919, v.14, part 1, p.227.</ref> In 1953, Eugene Ayers, a researcher for Gulf Oil, projected that if US ultimate recoverable oil reserves were 100 billion barrels, then production in the US would peak no later than 1960. If ultimate recoverable were to be as high as 200 billion barrels, which he warned was wishful thinking, US peak production would come no later than 1970. Likewise for the world, he projected a peak somewhere between 1985 (one trillion barrels ultimate recoverable) and 2000 (two trillion barrels recoverable). Ayers made his projections without a mathematical model. He wrote: "But if the curve is made to look reasonable, it is quite possible to adapt mathematical expressions to it and to determine, in this way, the peak dates corresponding to various ultimate recoverable reserve numbers"<ref>Eugene Ayers,"U.S. oil outlook: how coal fits in," Coal Age, August 1953, v58 n.8 p 70–73.</ref>
By observing past discoveries and production levels, and predicting future discovery trends, the geoscientist M. King Hubbert used statistical modelling in 1956 to predict that United States oil production would peak between 1965 and 1971.<ref name="mkinghubbert1956">Template:Cite conference</ref> While this prediction held for many decades,<ref>Deffeyes, Kenneth S (2002). Hubbert's Peak: The Impending World Oil Shortage. Princeton University Press. Template:ISBN.</ref> more recently as of 2018 daily oil production in the United States had finally exceeded its previous peak in 1970.<ref>Template:Cite web</ref><ref>Template:Cite web</ref> Hubbert used a semi-logistical curved model (sometimes incorrectly compared to a normal distribution). He assumed the production rate of a limited resource would follow a roughly symmetrical distribution. Depending on the limits of exploitability and market pressures, the rise or decline of resource production over time might be sharper or more stable, appear more linear or curved.<ref name="Brandt2007">Template:Cite journal</ref> That model and its variants are now called Hubbert peak theory; they have been used to describe and predict the peak and decline of production from regions, countries, and multinational areas.<ref name="Brandt2007" /> The same theory has also been applied to other limited-resource production.
A comprehensive 2009 study of oil depletion by the UK Energy Research Centre noted:<ref>Roger Bentley et al., "Comparison of global oil supply forecasts," UK Energy Research Centre, Review of Evidence for Global Oil Depletion, Technical Rept. 7, July 2009, p.25</ref>
The report noted that Hubbert had used the logistic curve because it was mathematically convenient, not because he believed it to be literally correct. The study observed that in most cases the asymmetric exponential model provided a better fit (as in the case of Seneca cliff model<ref>Bardi, Ugo. The Seneca Effect: Why Growth is Slow But Collapse is Rapid. Springer, 2017.</ref>), and that peaks tended to occur well before half the oil had been produced, with the result that in nearly all cases, the post-peak decline was more gradual than the increase leading up to the peak.<ref>Adam Brandt, "Methods of forecasting future oil supply," UK Energy Research Centre, Review of Evidence for Global Oil Depletion, Technical Rept. 6, July 2009, p.21</ref>
List of past predictions of peak oil
In the 21st century, predictions of future oil production made in 2007 and 2009 stated either that the peak had already occurred,<ref name="deffeyes012007"> Template:Cite web</ref><ref name="ewg1007">Template:Cite journal</ref><ref name="cohen102007" /><ref name="alklett112009">Template:Cite web</ref> that oil production was on the cusp of the peak, or that it would occur soon.<ref name="koppelaar092006">Template:Cite journal</ref><ref name="owen032010">Template:Cite journal</ref> A decade later, world oil production would rise to a new all time high in 2018, as developments in extraction technology enabled a massive expansion of U.S. tight oil production.<ref>Template:Cite magazine</ref><ref name=":3" /><ref>Template:Cite web</ref> Though world oil production faltered in 2020 due to the coronavirus pandemic causing significant disruptions in the oil markets, production in 2023 reached a new high of 101.73 million barrels per day in 2023.<ref>Template:Cite web</ref><ref>Template:Cite web</ref>
| Pub. | Made by | Peak year/range | Pub. | Made by | Peak year/range |
|---|---|---|---|---|---|
| 1972 | Esso | About 2000 | 1999 | Parker | 2040 |
| 1972 | United Nations | By 2000 | 2000 | A. A. Bartlett | 2004 or 2019 |
| 1974 | Hubbert | 1991–2000 | 2000 | Duncan | 2006 |
| 1976 | UK Dep. of Energy | About 2000 | 2000 | EIA | 2021–2067; 2037 most likely |
| 1977 | Hubbert | 1996 | 2000 | EIA (WEO) | Beyond 2020 |
| 1977 | Ehrlich, et al. | 2000 | 2001 | Deffeyes | 2003–2008 |
| 1979 | Shell | Plateau by 2004 | 2001 | Goodstein | 2007 |
| 1981 | World Bank | Plateau around 2000 | 2002 | Smith | 2010–2016 |
| 1985 | J. Bookout | 2020 | 2002 | Campbell | 2010 |
| 1989 | Campbell | 1989 | 2002 | Cavallo | 2025–2028 |
| 1994 | L. F. Ivanhoe | OPEC plateau 2000–2050 | 2003 | Greene, et al. | 2020–2050 |
| 1995 | Petroconsultants | 2005 | 2003 | Laherrère | 2010–2020 |
| 1997 | Ivanhoe | 2010 | 2003 | Lynch | No visible peak |
| 1997 | J. D. Edwards | 2020 | 2003 | Shell | After 2025 |
| 1998 | IEA | 2014 | 2003 | Simmons | 2007–2009 |
| 1998 | Campbell & Laherrère | 2004 | 2004 | Bakhitari | 2006–2007 |
| 1999 | Campbell | 2010 | 2004 | CERA | After 2020 |
| 1999 | Peter Odell | 2060 | 2004 | PFC Energy | 2015–2020 |
| A selection of estimates of the year of peak world oil production, compiled by the United States Energy Information Administration. Some forecasts relate to conventional oil. | |||||
Criticisms
General arguments
The theory of peak oil is controversial and became an issue of political debate in the US and Europe in the mid-2000s. Critics argued that newly found oil reserves forestalled a peak oil event. Some argued that oil production from new oil reserves and existing fields will continue to increase at a rate that outpaces demand, until alternative energy sources for current fossil fuel dependence are found.<ref>Template:Cite web</ref><ref name=Stanford>Template:Cite web</ref> In 2015, analysts in the petroleum and financial industries claimed that the "age of oil" had already reached a new stage where the excess supply that appeared in late 2014 may continue.<ref name=Spencer>Template:Cite report</ref><ref name=Shilling>Template:Cite news</ref> A consensus was emerging that parties to an international agreement would introduce measures to constrain the combustion of hydrocarbons in an effort to limit global temperature rise to the nominal 2 °C that scientists predicted would limit environmental harm to tolerable levels.<ref name=Paris>Template:Cite magazine</ref>
Another argument against the peak oil theory is reduced demand from various options and technologies substituting oil.<ref>Template:Cite web</ref> US federal funding to develop algae fuels increased since 2000 due to rising fuel prices.<ref>"National Algal Biofuels Technology Roadmap" (PDF). US Department of Energy, Office of Energy Efficiency and Renewable Energy, Biomass Program. Retrieved 3 April 2014.</ref> Many other projects are being funded in Australia, New Zealand, Europe, the Middle East, and elsewhere<ref>Template:Cite journal</ref> and private companies are entering the field.<ref>Darzins, A., 2008. Recent and current research & roadmapping activities: overview. National Algal Biofuels Technology Roadmap Workshop, University of Maryland.</ref>
Oil industry representatives
John Hofmeister, president of Royal Dutch Shell's US operations, while agreeing that conventional oil production would soon start to decline, criticized the analysis of peak oil theory by Matthew Simmons for being "overly focused on a single country: Saudi Arabia, the world's largest exporter and OPEC swing producer."<ref name="cnbc.com">Template:Cite web</ref> Hofmeister pointed to the large reserves at the US outer continental shelf, which held an estimated Template:Convert of oil and natural gas. However, only 15% of those reserves were currently exploitable, a good part of that off the coasts of Texas, Louisiana, Mississippi, and Alabama.<ref name="cnbc.com"/>
Hofmeister also pointed to unconventional sources of oil such as the oil sands of Canada, where Shell was active. The Canadian oil sands—a natural combination of sand, water, and oil found largely in Alberta and Saskatchewan—are believed to contain one trillion barrels of oil. Another trillion barrels are also said to be trapped in rocks in Colorado, Utah, and Wyoming,<ref name=HofmeisterPeakOilCriticism>Template:Cite web</ref> in the form of oil shale. Environmentalists argue that major environmental, social, and economic obstacles would make extracting oil from these areas excessively difficult.<ref>Template:Cite web</ref> Hofmeister argued that if oil companies were allowed to drill more in the United States enough to produce another Template:Convert, oil and gas prices would not be as high as they were in the late 2000s. He thought in 2008 that high energy prices would cause social unrest similar to the 1992 Rodney King riots.<ref name=HofmeiserCharlieRose>Template:Cite web</ref>
In 2009, Dr. Christof Rühl, chief economist of BP, argued against the peak oil hypothesis:<ref>Template:Cite web</ref> Template:Blockquote
Rühl argued that the main limitations for oil availability are "above ground" factors such as the availability of staff, expertise, technology, investment security, funds, and global warming, and that the oil question was about price and not the physical availability.
In 2008, Daniel Yergin of CERA suggest that a recent high price phase might add to a future demise of the oil industry, not of complete exhaustion of resources or an apocalyptic shock but the timely and smooth setup of alternatives.<ref>Financial Times Germany, 29 May 2008 Daniel Yergin: Öl am Wendepunkt (Oil at the turning point)</ref> Yergin went on to say, "This is the fifth time that the world is said to be running out of oil. Each time-whether it was the 'gasoline famine' at the end of WWI or the 'permanent shortage' of the 1970s-technology and the opening of new frontier areas have banished the spectre of decline. There's no reason to think that technology is finished this time."<ref name="Ali">Template:Cite book</ref>
In 2006, Clive Mather, CEO of Shell Canada, said the Earth's supply of bitumen hydrocarbons was "almost infinite", referring to hydrocarbons in oil sands.<ref name="Shell Canada CEO">Template:Cite web</ref>
Others
In 2006 attorney and mechanical engineer Peter W. Huber asserted that the world was just running out of "cheap oil", explaining that as oil prices rise, unconventional sources become economically viable. He predicted that, "[t]he tar sands of Alberta alone contain enough hydrocarbon to fuel the entire planet for over 100 years."<ref name="Shell Canada CEO" />
Environmental journalist George Monbiot responded to a 2012 report by Leonardo Maugeri<ref>Maugeri, Leonardo. "Oil: The Next Revolution" Discussion Paper 2012–10, Belfer Center for Science and International Affairs, Harvard Kennedy School, June 2012. Retrieved 13 July 2012.</ref> by suggesting that there is more than enough oil (from unconventional sources) to "deep-fry" the world with climate change.<ref name=peakoil>Monbiot, George. "We were wrong on peak oil. There's enough to fry us all" The Guardian, 2 July 2012. Retrieved 13 July 2012.</ref> Stephen Sorrell, senior lecturer Science and Technology Policy Research, Sussex Energy Group, and lead author of the UKERC Global Oil Depletion report, and Christophe McGlade, doctoral researcher at the UCL Energy Institute have criticized Maugeri's assumptions about decline rates.<ref>Mearns, Euan. "A Critical Appraisal of Leonardo Maugeri's Decline Rate Assumptions" The Oil Drum, 10 July 2012.</ref>
See also
Notes
Citations
Further information
Books
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- Campbell, Colin J. (2005). Oil Crisis Multi-Science Publishing.
- Campbell, Colin J. (2013). Campbell's Atlas of Oil and Gas Depletion Template:ISBN
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- Herberg, Mikkal (2014). Energy Security and the Asia-Pacific: Course Reader. United States: The National Bureau of Asian Research.
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Articles
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- De Young, R. (2014). "Some behavioral aspects of energy descent." Frontiers in Psychology, 5(1255).
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Documentary films
- The End of Suburbia: Oil Depletion and the Collapse of the American Dream (2004)
- A Crude Awakening: The Oil Crash (2006)
- The Power of Community: How Cuba Survived Peak Oil (2006)
- Crude Impact (2006)
- What a Way to Go: Life at the End of Empire (2007)
- Crude (2007) Australian Broadcasting Corporation documentary [3 x 30 minutes] about the formation of oil, and humanity's use of it
- PetroApocalypse Now? (2008)
- Blind Spot (2008)
- GasHole (2008)
- Collapse (2009)
- Peak Oil: A Staggering Challenge to "Business As Usual"
Podcasts
- Saudi America? – The U.S. Oil Boom in Perspective
- KunstlerCast 275 — Art Berman Clarifies Whatever Happened to Peak Oil Template:Webarchive
External links
- Association for the Study of Peak Oil International
- Eating Fossil Fuels FromTheWilderness.com
- Peak Oil Primer – Resilience.org; Peak Oil related articles Template:Webarchive – Resilience.org
- Evolutionary psychology and peak oil: A Malthusian inspired "heads up" for humanity Template:Webarchive An overview of peak oil, possible impacts, and mitigation strategies, by Dr. Michael Mills
- Energy Export Databrowser-Visual review of production and consumption trends for individual nations; data from the BP Annual Statistical Review
- Peak oil – EAA-PHEV Wiki Electric vehicles provide an opportunity to transition away from fueling our vehicles with petroleum fuels.
- Peak oil charts A site that allows users to group and chart production data by country.
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