Read an Excerpt
One
Why Look Beyond Oil?
The supply of oil in the ground is not infinite. Someday, annual world crude oil production has to reach a peak and start to decline. It is my opinion that the peak will occur in late 2005 or in the first few months of 2006. I nominate Thanksgiving Day, November 24, 2005, as World Oil Peak Day. There is a reason for selecting Thanksgiving. We can pause and give thanks for the years from 1901 to 2005 when abundant oil and natural gas fueled enormous changes in our society. At the same time, we have to face up to reality: World oil production is going to decline, slowly at first and then more rapidly.
My late-2005 prediction is a statement about the smoothed average of annual oil production. As we go over the top of the smoothed average, individual years, like wine vintages, have their ups and downs. At the time of this writing (in the middle of 2004), the year 2003 had the largest oil production.1 However, production in 2003 was only 3 percent larger than the production in 1998. That’s not 3 percent per year; it is only 0.6 percent growth per year. World oil production has now ceased to grow. Decline is the next step. The picnic’s over.
My prediction of the world oil production peak is based on the methods that M. King Hubbert used in 1956 to predict the 1970 peak of U.S. oil production.2 (Hubbert’s method is explained in detail in Chapter 3). Even before I published my 2001 book Hubbert’s Peak: The Impending World Oil Shortage, half a dozen petroleum geologists had already published similar conclusions.3 Hubbert published his own world oil prediction in 1969; the more optimistic of his two scenarios placed the peak in the year 2000. On the other side of the debate, the U.S. Geological Survey published enormously more optimistic estimates for U.S. and world oil potential.4 Other analysts, using the USGS results, have predicted that world oil production will not peak until 2036.5
Thanksgiving
Between 1901 and 2005, oil and natural gas transformed our society. In 1901, the Spindletop well, near Beaumont, Texas, changed the basis of the petroleum industry. It opened the enormously productive area of the Gulf Coast, pushed U.S. oil production to first place in the world, displacing Russia, and introduced the rotary drilling rig, which is still the standard today. Moreover, the flow of water, oil, or gas into the well bore could be controlled. The last point, control of subsurface flow, removed the "gusher" scene from the routine oil business, except for accidental failures of the system.
M. King Hubbert was well known among geologists for several innovative ideas, usually backed by mathematical analysis. After his prediction of the U.S. oil production peak came true, conservationists considered Hubbert to be a folk hero. (© George Tames, The New York Times)
My parents, born in 1903 and 1904, grew up on farms in two different parts of Oklahoma. My mother claimed that the automobile was the major element of change, introducing social as well as personal mobility. Before the automobile, there were weekly trips in a horse-drawn wagon to the nearest small town to sell farm produce and buy supplies. The Ford Model T enabled my parents to find their way to Oklahoma A&M, now renamed Oklahoma State University. One of my aunts claimed that the major motivation for higher education was to get off of those farms.
The automobile and the oil business were made for each other. From 1859 through 1908, the major petroleum product was kerosene for lanterns. After that, automobiles and trucks became a rapidly expanding market. Oil refineries were gradually improved to turn a bigger fraction of the crude oil into gasoline. Oil exploration and production was a worldwide enterprise.
The year 1903 saw the Wright brothers’ first flight. The high energy content per unit weight of gasoline was even more important for airplanes than for cars. High-grade aviation gasoline became a profitable product, even though aviation was a smaller market than automobiles. With the 1945 introduction of the jet aircraft engine, a kerosenelike product known as JP-4 became important. Mobility is now global. It is possible today to travel door-to-door from a street address in any city in the world to any other city in less than twenty-four hours. It’s not just people: Mail, computer components, mangoes, and asparagus move by air freight.
Meanwhile, back on the farm, agriculture was transformed. Tractors replaced horses, produce was trucked to wider markets, and mineral fertilizers became widely available. The Green Revolution of the 1960s used improved seeds, pesticides, and mineral fertilizers to make famine obsolete. It wasn’t "organic," but it sure beat death from starvation. A measure of the importance of oil and gas: 80 percent of an Iowa corn farmer’s costs is, directly and indirectly, the cost of fuels.
A whole industry emerged for making products derived from oil: petrochemicals. An astonishing range of plastics, fibers, solvents, pesticides, and coatings are made from oil and natural gas. My guess is that petrochemicals will be the last, best use of petroleum as it becomes scarce. Using oil as premade building blocks for organic chemistry is better than burning it for fuel. When I am offered an unnecessary plastic bag at the grocery store, I reply, "No, save an oil well."
I visited England in 1967 and again in 1985, and I was amazed at the changes that had occurred in the meantime. The legendary poorly heated housing became warmed by gas newly discovered in the North Sea. A feeling close to hopelessness had been replaced by a whiff of prosperity. The wealth from oil and gas is very irregularly distributed throughout the world, both among countries and among individuals. That’s partly geology and partly politics. Big oilfields occur wherever all of the several required geological conditions are "just right." Our subdivision of the world into ever-smaller sovereign countries and the success of private-property systems concentrated much of the oil wealth into a few hands. An example: During my stay at the University of Cambridge in 1985, I needed a book in their main library. As I entered the building, I had the weird feeling that I wasn’t in England anymore. The Cambridge main library looked American. I found a hallway display that explained it. The library had been built during the Great Depression, with Rockefeller money. Oil money.
I’m not claiming that oil and gas generated all the goodies of the twentieth century. Computers and telecommunications succeeded in part because they used diminishing amounts of energy. Silicon is the second most abundant element in the earth’s crust, so the supply of materials was never a problem. Well, there was some help from the oil industry. The patent rights for the integrated-circuit chip were shared by Texas Instruments and by Intel. At the time of the invention, Texas Instruments was a service company, conducting seismic surveys in the search for petroleum.6
Because I am a geologist, I have my own narrow reasons to give thanks for the growth of the oil industry. Well-staffed and well-funded research laboratories were developed by the major oil companies. To a geologist, the miracle was having top-grade physicists, chemists, and mathematicians on the staff, willing and eager to discuss geological problems. Two technological innovations were important because both of them generated objective, noninterpretive, data:
• Sensors were sent down wells, at the ends of electrical cables, to measure rock properties. Known as "wireline logs," they were run on virtually every well and are a rich source of data.
• Sound waves generated at the surface and reflected back from subsurface rock layers produced cross sections similar to the so
