Peak oil? No and maybe never. Why predictions of peak oil have never come true.
Have we beaten “peak oil”?
For decades, it has been a doomsday scenario looming large in the popular imagination: The world’s oil production tops out and then starts an inexorable decline—sending costs soaring and forcing nations to lay down strict rationing programs and battle for shrinking reserves.
U.S. oil production did peak in the 1970s and sank for decades after, exactly as the theory predicted. But then it did something the theory didn’t predict: It started rising again in 2009, and hasn’t stopped, thanks to a leap forward in oil-field technology.
“Technology moves so quickly today that any looming resource constraint will be nothing more than a blip,” says petroleum economist Phil Verleger. “We adjust.”
Whether peak oil exists is more than just a point of intellectual debate—although it certainly has proved to be a heated and divisive one for decades. The question—and how we think about it—also has a big potential impact for governments, oil producers and ordinary people across the globe, all of whom depend on the vagaries of oil production and would be threatened by soaring costs and shortages.
The peak-oil boosters argue that instead of plowing money into new ways to find oil, we should be conserving what we have and investing in alternative energy sources so that we’re prepared when supplies run low and costs soar. Most of the naysayers agree that we shouldn’t stick with oil forever. But they think it’s wiser to invest in technology to keep expanding the available supply, until it gets too expensive to do so. At that point, they’re confident, we’ll be able to come up with an economical alternative.
The History of an Idea
Peak oil was most widely popularized by M. King Hubbert, a brilliant—and egotistic, by some accounts—geologist who worked for years at Shell Oil. In a 1956 paper, he predicted that U.S. oil production would peak, probably in the early 1970s, and then decline. It would resemble a bell curve.
As the theory took hold, it helped justify increased investments in alternative energy, and informed some expert thinking about the future of energy. More recently, the theory saw a surge of interest a few years ago when oil prices were high and seemed stuck there.
“Welcome to the world beyond Hubbert’s peak,” wrote Kenneth Deffeyes, one of the adherents of peak oil, in 2008.
What changed? An innovation in oil-field technology, which peak-oil theory didn’t anticipate. Energy companies combined hydraulic fracturing and horizontal drilling to wring oil out of super-tight rock formations in North America. The industry figured out that pumping chemically slickened water and sand into shales could create thousands of fractures, each one a tiny path for energy molecules to travel into a well.