Hubbert Peak Theory

The Hubbert peak theory posits that for any given geographical area, from an individual oil-producing region to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve. It is one of the primary theories on peak oil.

Choosing a particular curve determines a point of maximum production based on discovery rates, production rates and cumulative production. Early in the curve (pre-peak), the production rate increases because of the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines because of resource depletion.

The Hubbert peak theory is based on the observation that the amount of oil under the ground in any region is finite, therefore the rate of discovery which initially increases quickly must reach a maximum and decline. In the US, oil extraction followed the discovery curve after a time lag of 32 to 35 years. The theory is named after American geophysicist M. King Hubbert, who created a method of modeling the production curve given an assumed ultimate recovery volume.

Hubbert's peak

"Hubbert's peak" can refer to the peaking of production of a particular area, which has now been observed for many fields and regions.

Hubbert's Peak was achieved in the continental US in the early 1970s. Oil production peaked at 10.2 million barrels a day. Since then, it has been in a gradual decline.

Peak oil as a proper noun, or "Hubbert's peak" applied more generally, refers to a singular event in history: the peak of the entire planet's oil production. After Peak Oil, according to the Hubbert Peak Theory, the rate of oil production on Earth would enter a terminal decline. On the basis of his theory, in a paper he presented to the American Petroleum Institute in 1956, Hubbert correctly predicted that production of oil from conventional sources would peak in the continental United States around 1965-1970. Hubbert further predicted a worldwide peak at "about half a century" from publication and approximately 12 gigabarrels (GB) a year in magnitude. In a 1976 TV interview Hubbert added that the actions of OPEC might flatten the global production curve but this would only delay the peak for perhaps 10 years.

Hubbert's theory

Hubbert curve

In 1956, Hubbert proposed that fossil fuel production in a given region over time would follow a roughly bell-shaped curve without giving a precise formula; he later used the Hubbert curve, the derivative of the logistic curve, for estimating future production using past observed discoveries.

Hubbert assumed that after fossil fuel reserves (oil reserves, coal reserves, and natural gas reserves) are discovered, production at first increases approximately exponentially, as more extraction commences and more efficient facilities are installed. At some point, a peak output is reached, and production begins declining until it approximates an exponential decline.

The Hubbert curve satisfies these constraints. Furthermore, it is roughly symmetrical, with the peak of production reached when about half of the fossil fuel that will ultimately be produced has been produced. It also has a single peak.

Given past oil discovery and production data, a Hubbert curve that attempts to approximate past discovery data may be constructed and used to provide estimates for future production. In particular, the date of peak oil production or the total amount of oil ultimately produced can be estimated that way. Cavallo defines the Hubbert curve used to predict the U.S. peak as the derivative of:

where Q _max is the total resource available (ultimate recovery of crude oil), Q ( t ) the cumulative production, and a and b are constants. The year of maximum annual production (peak) is:

Use of multiple curves

The sum of multiple Hubbert curves, a technique not developed by Hubbert himself, may be used in order to model more complicated real life scenarios.

Definition of reserves

Almost all of Hubbert peaks must be put in the context of high ore grade. Except for fissionable materials, any resource, including oil, is theoretically recoverable from the environment with the right technology. In contrast, Hubbert was concerned with "easy" oil, "easy" metals, and so forth that could be recovered without greatly advanced mining efforts and how to time the necessity of such resource acquisition advancements or substitutions by knowing an "easy" resource's probable peak. Also, as reserves become more difficult to extract there is the possibility that mining or alternatives are too expensive for developing countries.

For heavy crude or deep water drilling attempts, such as Noxal oil field or tar sands or oil shale, the price of the oil extracted will have to include the extra effort required to mine these resources. According to the U.S. Minerals Management Service, areas such as the Outer Continental Shelf may also incur higher costs due to environmental concerns. So not all oil reserves are equal, and the more difficult reserves are predicted by Hubbert as being typical of the post-peak side of the Hubbert curve.

Reliability

Hubbert, in his 1956 paper, presented two scenarios for US conventional oil production (crude oil + condensate):

most likely estimate: a logistic curve with a logistic growth rate equal to 6%, an ultimate resource equal to 150 Giga-barrels (Gb) and a peak in 1965.
upper-bound estimate: a logistic curve with a logistic growth rate equal to 6% and ultimate resource equal to 200 Giga-barrels and a peak in 1970.

Hubbert's upper-bound estimate, which he regarded as optimistic, accurately predicted that US oil production would peak in 1970. Forty years later, the upper-bound estimate has also proven to be very accurate in terms of cumulative production, less so in terms of annual production. For 2005, the upper-bound Hubbert model predicts 178.2 Gb cumulative and 1.17 Gb current production; actual US production was 176.4 Gb cumulative crude oil + condensate (1% lower than the upper bound estimate), with annual production of 1.55 Gb (32% higher than the upper bound estimate).

A post-hoc analysis of peaked oil wells, fields, regions and nations found that Hubbert's model was the "most widely useful"(providing the best fit to the data), though many areas studied had a sharper "peak" than predicted.

Economics

Energy return on energy investment

When oil production first began in the mid-nineteenth century, the largest oil fields recovered fifty barrels of oil for every barrel used in the extraction, transportation and refining. This ratio is often referred to as the Energy Return on Energy Investment (EROI or EROEI). Currently, between one and five barrels of oil are recovered for each barrel-equivalent of energy used in the recovery process. As the EROEI drops to one, or equivalently the Net energy gain falls to zero, the oil production is no longer a net energy source. This happens long before the resource is physically exhausted.

Note that it is important to understand the distinction between a barrel of oil, which is a measure of oil, and a barrel of oil equivalent (BOE), which is a measure of energy. Many sources of energy, such as fission, solar, wind, and coal, are not subject to the same near-term supply restrictions that oil is. Accordingly, even an oil source with an EROEI of 0.5 can be usefully exploited if the energy required to produce that oil comes from a cheap and plentiful energy source. Availability of cheap, but hard to transport, natural gas in some oil fields has led to using natural gas to fuel enhanced oil recovery. Similarly, natural gas in huge amounts is used to power most Athabasca Tar Sands plants. Cheap natural gas has also led to Ethanol fuel produced with a net EROEI of less than 1, although figures in this area are controversial because methods to measure EROEI are in debate.