M. King Hubbert and `Peak Oil` from a Distance of 40 years: Lessons

M. King Hubbert and ‘Peak Oil’ from a Distance of 40 years: Lessons Learned*
Peter R. Rose1
Search and Discovery Article #70189 (2015)**
Posted September 21, 2015
*Adapted from presentation at History of Petroleum Geology Forum, 2015 AAPG Convention & Exhibition, Denver, Colorado, May 31, 2015
**Datapages © 2015 Serial rights given by author. For all other rights contact author directly.
1
Rose and Associates, Austin, Texas ([email protected])
Abstract
Marion King Hubbert generated prescient and unwelcome forecasts in 1956 and again in 1962, that annual U. S. crude oil production would
peak in the late 1960s or early 1970s at around 3 billion bbl, and decline thereafter, implying growing American dependence on imported oil.
Hubbert estimated that ultimate domestic crude oil production would total about 200 billion bbl. These forecasts brought him into sharp
conflict with the U. S. Geological Survey's Vincent E. McKelvey throughout the 1960s, and continuing well into the 1970s, even after
McKelvey became Director of USGS in 1971. Under McKelvey's leadership, USGS had consistently estimated that domestic crude oil
resources were much larger than Hubbert's forecasts – as much as 590 billion bbl – sufficient “to meet projected consumption through and
beyond” the end of the 20th century. Their increasingly acrimonious dispute reached out well beyond the American scientific community and
spilled over into National energy policy. When U.S. crude oil production peaked in 1970 at about 3.2 billion bbl, Hubbert's bold forecast
seemed to be confirmed, and he was hailed as a prophet. McKelvey was fired in 1977 by the incoming Carter administration, and Hubbert's
forecasts were used as a basis to deny government subsidies to domestic E&P companies (“if the resource endowment is not there, it's not
worth paying companies to try and look for it”), and to develop alternative domestic energy sources, including oil shale deposits. Hubbert then
developed analogous estimates of future domestic natural gas production, as well as global crude oil production. He forecast that U. S. natural
gas production would peak in 1975, at about 18 trillion ft3 per year, with a total production of about 1050 TCF. Hubbert also predicted that
global oil production would peak at an annual rate of about 40 billion bbl in about 1995, with ultimate production of about 2000 billion bbl.
These forecasts have long since been eclipsed by actual production, and discovered reserves. Examined from the vantage point of nearly 40
years, all of Hubbert's forecasts are clearly too pessimistic, primarily because he failed to anticipate that technological breakthroughs would
make E&P in hostile environments possible and that new drilling and stimulation technologies would allow reservoirs to be developed in rocks
then thought to be incapable of production.
Selected References
Hubbert, M.K., 1956, Nuclear energy and the fossil fuels: Shell Development Company, Publication No. 95, 40p.; published on 8 Mar 2006 by
Energy Bulletin. Website accessed September 2, 2015, http://home.hiroshima-u.ac.jp/er/ZR11_Z_03.html.
Hubbert, M.K., 1962, Energy resources: National Academy of Sciences Publication 1000-D, p.81-83.
Hubbert, M.K., 1971, The energy resources of the Earth: Scientific American, v. 225 (September 1971), p. 60-70.
Hubbert, M.K., 1972, Estimation of oil and gas resources, in U.S. Geological Survey Workshop on Techniques of Mineral Resource Appraisal:
USGS, Denver, CO. p. 16-50.
Rose, P. R., 2014, M. King Hubbert, “peak oil,” and U.S. energy policy: Gulf Coast Association of Geological Societies Transactions, v. 64, p.
607–609. Website accessed September 2, 2015, http://archives.datapages.com/data/gcags/data/064/064001/pdfs/607.pdf.
Zapp, A.D., 1961, World petroleum resources, in Domestic and world resources of fossil fuels, radioactive minerals, and geothermal energy:
Preliminary reports prepared by the U.S. Geological Survey for the National Resources Subcommittee of the Federal Science Council,
November 28, 1961, 9 p.
M. KING HUBBERT AND ‘PEAK OIL’
FROM A DISTANCE OF 40 YEARS:
LESSONS LEARNED
Peter R. Rose
AAPG
2015
M. King Hubbert (~1976)
Hubbert’s Logistic Curve (1956)
Production Rate P vs. Time t for Complete Production Cycle of an
Exhaustible Resource, Hubbert, 1956.
1966
1971
Hubbert’s 1956 Curve, U.S. Crude Oil
1967-1969
Hubbert’s 1962 Curve, U.S. Crude Oil
Vincent E. McKelvey, Director,
US Geological Survey (~1974)
Comparison of Forecasts for U.S. Crude Oil
Production, USGS, 1961 vs Hubbert, 1962
1970
Hubbert’s “Complete Cycle of US Crude Oil
Production as of 1971”
Consequences of Hubbert vs.
McKelvey/USGS
 McKelvey fired as Director of USGS, 1977
 Hubbert view of diminishing US Oil & Gas
Production adopted by Carter
Administration for US Energy Policy
 Hubbert lionized, McKelvey forgotten
 USGS formed experienced teams to assess
oil & gas resources probabilistically, using
Play Concepts: 1974 → present
THE VICTOR
M. King Hubbert (~1978)
Hubbert’s “Complete Cycle of US Crude Oil
Production as of 1971”
Vs. Actual Production 1972-2014
Q∞ = 170 x 109 bbls
Total US production
1972-2014 (EIA)
Total Conterminous US
Production 1972-2014
(EIA)
Comparison of Forecasts for U.S. Crude Oil
Production, USGS, 1961 vs Hubbert, 1962
Production 1875-2014
Proved Reserves (2013)
Total
Mean Est. Rec. Resources
=
=
=
=
=
212
33
245
124
369
x
x
x
x
x
109
109
109
109
109
bbls
bbls
bbls
bbls
bbls
590 x 109 bbls
= USGS
MEAN
RESOURCES
RESERVES
200 x 109 bbls
= HUBBERT
369 x 109 bbls
= 2014 Actual
Hubbert’s Estimate of Complete Cycle of US
Natural Gas Production (1972)
2013 Proved
Reserves 354 TCF
US NATURAL GAS
Hubbert Forecast (1972) = 1050 TCF
Actual (2014) = 1604 TCF*
836 TCF
Measured
Production
EIA Projection
Shale
Gas
* Does not include natural gas
CBM
Tight
Gas
Conv.
Lower 48 Onshore
Lower 48 Offshore
2014
resources estimated at 15002000 TCF
1850s
1860s
1870s
1890s
1910s
Drilling for oil (cable tools)
Anticlinal theory
Surface mapping
Rotary drilling
Use of geologists
Torsion balance
Sedimentary petrology/petrography
Refraction seismic
Micropaleontology
Reflection seismic
Magnetometer
Electric logs
Drill-stem testing
Coring
Stratigraphic trap concept
Aerial photography
Gamma-ray neutron logs
Offshore drilling
Hydraulic fracturing
Sonic log
Density log
CDP Seismic
Discounted cash-flow analysis
Petroleum geochemistry and source rocks
Seismic amplitude anomalies ("Bright spots")
The March of E&P Technology
1920s
1930s
1940s
1950s
1960s
1970s
IMPROVED TECHNOLOGY
HIGHER PRICE
RESOURCE TRIANGLE
LARGE TARGETS
ENGINEERING - GEOLOGY
FIRST
CLASS
SMALL TARGETS
SEISMIC - GEOLOGY
LOWER GRADE RESERVOIRS
LOWEST GRADE RESERVOIRS
HUGE TARGETS
RESEARCH
2015 View of Hubbert’s 1972 Forecast on
Complete Cycle of World Crude-oil Production
1900-2014 Cumulative
Crude Oil Production ≈
2354 x 109 bbls
Current Predictions:
Peak Oil > 2020 → ?
Total Ult. Prod. > 5,453 B bbls
?
2013 Proved
Reserves (BP)
1688 x 109 bbls
2012 Estimated
Conventional Mean Oil
Resources (USGS)
1411 x 109 bbls
Recoverable
Oil Resources
in Organic
Shales?
2014
Hubbert Predictions:
Peak = 1995
Total Ult. Prod. = 2,000 B bbls
Conditions:
1. One Occurrence-mode
2. Static Technology around Peak
3. Same-cost Alternative Available
Conditions:
1. Multiple Occurrence-modes
2. Dynamic Technologies around Peak
3. More Costly Alternatives Available
4. Increasing Efficiencies of Use
The Hubbert – McKelvey Conflict on Oil & Gas Resources:
A 40-year Perspective
HUBBERT:
1. Hubbert Curve: A Hybrid of Resources & Utilization
2. A Static view of Resources
3. No sense of Economics or Innovation
4. Blinded by Mathematics; no sense of Uncertainty
5. Ego-driven, Disrespectful Arrogance
6. Forced us to look at Limits of Non-renewable
Resources
MCKELVEY:
1. Doctrinaire Cornucopian - - Economics drives
Resources
2. No sense of Geologic Constraints on Resources
3. Conceptual, not Mathematical, thinker
4. Ego-driven, Manipulative Arrogance
5. Encouraged Complacency about Energy Supplies
M. KING HUBBERT AND ‘PEAK OIL’
FROM A DISTANCE OF 40 YEARS:
LESSONS LEARNED
Peter R. Rose
AAPG
2015