Student Post: The Myth of “Peak Oil”

Economists, Geologists, and Politicians like to scare the public into believing we have reached “Peak Oil” or are about to reach “Peak Oil”.  Ever since M. King Hubbert, developed the Hubbert curve in 1956, scare mongers have been sure we will soon reach “Peak Oil. Hubbert predicted we would reach peak oil between 1965 and 1970. Well, production has continued to go up since that time. Hubbert, and many others failed to realize that higher profits would drive more investment into oil production. Substitution and innovation have also created other means of providing energy.  No one hears complaints of other scarce resources having a peak. No complaints of “Peak Coal”, “Peak Natural Gas”, “Peak Water”, “Peak Air”, “Peak Rock” etc…  These types of scare tactics are not new and have been used to scare people throughout history.

In the 19^th century economist Thomas Malthus gained popularity by declaring that food production could not keep up with human population growth.  Since then the population has increased dramatically but so has food production.  Like Malthus was proven wrong so will Hubbert. The earth obviously has only so much oil and other natural resources. Based on prices humans tend to substitute, scale back use, or innovate new technology.  No one can say for sure what the new method of energy will be.  It is likely that we may be able to harvest unlimited sources of energy in sun, wind, or nuclear power.  Even fossil fuels like natural gas could be used as a substitute.  Natural Gas is already being used to create hydrogen powered cars and airplanes. As of now we have very little knowledge of how much natural gas the earth has. We don’t know exactly how much natural gas the earth has but it is estimated that we may have up to 180 trillion cubic meters. This is enough natural gas to last over two thousand years. 

                  

Whatever replaces petroleum will have to be better and cheaper. As oil becomes scarcer many other energy sources will become cheaper. Humans will generally not want to replace oil with an inferior product. This will be up to energy suppliers trying to make profits. The higher the profits the more new technology we will see.  Just like the accidental discovery of kerosene saved whales from becoming extinct so will new technology save oil.

                  

Human ingenuity and the quest for profits will ensure we always have sources of energy.  Many energy sources are not profitable at present but as oil prices rise they would become more profitable. Humans wants and needs change over time based on prices. We are quick to substitute alternatives based on prices. The “world is ending” attitude has been around forever and will be around in the future. Those that believe in “Peak Oil” underestimate the ability of humans. One day economists will place Hubbert, and Malthus, right next to each other in scare mongers that were proven wrong.