"Are We 'Running Out of Peak
I Thought There Was 40 Years of the Stuff Left"
Oil will not just "run out"
because all oil
production follows a bell curve.
This is true whether we're talking about an individual
field, a country, or on the planet as a whole.
Oil is increasingly
plentiful on the
upslope of the bell curve,
increasingly scarce and expensive on the
down slope. The peak of the curve
coincides with the point at which the endowment of oil has been 50 percent
depleted. Once the peak is passed, oil production begins to go down while
cost begins to go up.
In practical and considerably oversimplified
terms, this means that if 2005 was the
year of global Peak Oil, worldwide oil production in the year 2030 will
be the same as it was in 1980.
However, the world’s population. in 2030 will be
both much larger (approximately twice) and much more industrialized
(oil-dependent) than it was in 1980. Consequently,
worldwide demand for oil will outpace
worldwide production of oil by a significant margin.
As a result, the price will skyrocket, oil
dependant economies will crumble, and resource wars will explode.
The human body is 70 percent water. The body of a
pound man thus holds 140 pounds of water. Because
water is so crucial to everything the human body does,
the man doesn't need to lose all 140 pounds of water
weight before collapsing due to dehydration. A loss of
as little as 10-15 pounds of water may be enough to kill him.
In a similar sense, an oil based economy such as ours
doesn't need to deplete its entire reserve of oil before
it begins to collapse. A shortfall between demand and
supply as little as 10 to 15 percent is enough to wholly
shatter an oil-dependent economy and reduce its citizenry to poverty.
The effects of even a small drop in production can be
devastating. For instance, during the 1970s oil shocks,
shortfalls in production as small as 5% caused the price
of oil to nearly quadruple. The same thing happened in
California a few years ago with natural gas: a production
drop of less than 5% caused prices to skyrocket by 400%.
Fortunately, those price shocks were only
The coming oil shocks won't be so short lived.
They represent the onset of a new, permanent
condition. Once the decline gets under way,
production will drop(conservatively) by 3% per year,
every year. War, terrorism, extreme weather and other "above ground" geopolitical factors will likely push the
effective decline rate past 10% per year, thus cutting the total supply by 50%
in 7 years.
These estimate comes from numerous sources,
not the least of which is Vice President Dick Cheney
himself. In a 1999 speech he gave while still CEO of Halliburton,
"By some estimates, there will be an
average of two-percent annual growth in
global oil demand over the years ahead,
along with, conservatively, a three-
percent natural decline in production
from existing reserves. That means
2010 we will need n additional 50 million barrels per day."