surge in alternative fuels. Further, the Hubbert Curve would suggest
that at some point in the next few years the oil peak will occur whatever
the price of oil, meaning that year-over-year declines of production are
on the horizon.
The Hubbert Curve
As a framework for thinking about the world’s oil production and supply,
it is useful to understand the work of Hubbert, the Shell geologist who in
1956 correctly predicted that U.S. oil production would peak around
1966–1972. Oil analysts have applied Hubbert’s methodology to world
oil production and are predicting that world oil production will peak
within the next several years, though they disagree on the precise timing.
Essentially, Hubbert’s technique was based on the prediction that the
production level for oil as it was utilized would follow a normal distribution.
Thus, if the United States had 200 billion barrels of reserves when
100 billion barrels had been extracted, U.S. production would begin to
decline.
Assuming that the world originally had three trillion barrels of oil reserves,
if two trillion has been discovered thus far and one trillion has already
been consumed, then one trillion barrels would remain to be
discovered. A peaking of oil production would occur after another onehalf
trillion barrels had been consumed, and this would probably occur in
about 15 years, according to this analysis.
It is worth noting that Hubbert’s methodology is based on a purely
statistical analysis of exploration and production data. It does not take
into account new developments like tar sands, which could potentially
prolong oil supplies for a few decades, nor does it take into consideration
emerging advanced production technologies. Still, Hubbert’s theory is
important because it provides a road map for the oil market; if demand is
set to rise to 100 million barrels per day and there isn’t the production
capacity to match, oil prices can only move in one direction: up.
THE FUTURE OF ENERGY
As the world faces dwindling supply—and higher prices—for oil, there
is a tremendous appeal to the idea of inexpensive, nonpolluting, re-
THE END OF AN ERA? 31