Peak oil
Peak oil is the theorized point in time when the maximum rate of global oil production will occur, after which oil production will begin an irreversible decline.[2][3][4] The primary concern of peak oil is that global transportation heavily relies upon the use of gasoline and diesel fuel. Switching transportation to electric vehicles, biofuels, or more fuel-efficient forms of travel (trains, waterways) may help reduce oil demand.[5]
For Peak brand motor oil, see Peak (automotive products).
Peak oil is very closely related to the concept of oil depletion; while global petroleum reserves are finite, the limiting factor is not whether the oil exists but whether it can be extracted economically at a given price.[6][7] Historically, it was theorized that a secular decline in oil production would be caused by eventual depletion of known reserves, though more recently a new competing theory has emerged - that reductions in oil demand may reduce the price of oil relative to the cost of extraction, as might be induced to reduce carbon emissions. Or, demand may be reduced from demand destruction triggered by persistently high oil prices.[6][8]
Numerous predictions of the timing of peak oil have been made over the past century before being falsified by subsequent growth in the rate of petroleum extraction.[9][10][11][12][13] M. King Hubbert is often credited with introducing the notion in a 1956 paper which presented a formal theory and predicted U.S. extraction to peak between 1965 and 1971.[14][15] Hubbert's original predictions for world peak oil production proved premature[15] and, as of 2023, forecasts of the year of peak oil range from 2025 to 2040.[16] These predictions are dependent on future economic trends, technological developments, and efforts by societies and governments to mitigate climate change.[8][17][18]
Criticisms[edit]
General arguments[edit]
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.[142][143] 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.[144][145]
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.[146]
Another argument against the peak oil theory is reduced demand from various options and technologies substituting oil.[147] US federal funding to develop algae fuels increased since 2000 due to rising fuel prices.[148] Many other projects are being funded in
Australia, New Zealand, Europe, the Middle East, and elsewhere[149] and private companies are entering the field.[150]
Oil industry representatives[edit]
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."[151] Hofmeister pointed to the large reserves at the US outer continental shelf, which held an estimated 100 billion barrels (16×109 m3) 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.[151]
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,[152] in the form of oil shale. Environmentalists argue that major environmental, social, and economic obstacles would make extracting oil from these areas excessively difficult.[153] Hofmeister argued that if oil companies were allowed to drill more in the United States enough to produce another 2 million barrels per day (320×103 m3/d), 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.[154]
In 2009, Dr. Christof Rühl, chief economist of BP, argued against the peak oil
hypothesis:[155]