The geophysicist M. King Hubbert was the first to introduce the concept of peak oil in what is now called Hubbert peak theory, where the shape of a graph representing an oil-producing region would resemble a bell curve (although the actual shape may be irregular and unsymmetrical).
In 1956 he used peak oil models to successfully estimate that oil production in the USA would peak between 1965 and 1970. His attempts to calculate global peak oil revealed the limitations of his theory however. In 1962 he predicted that the peak of global oil reserves would be reached in 2000, but his model did not incorporate artificial limits to oil production, such as the OPEC-led 1973 oil crisis.
A key problem with Hubbert’s peak theory is its reliance on a value known as URR, or Ultimate Recoverable Reserves. URR “is the amount of oil that has already been produced plus the oil that will be produced in the future.” The URR can change if new oil fields are discovered, though such a possibility is now unlikely and probably unhelpful – for example, “increasing the global URR by one billion barrels delays the date of peak production by only 4.7 days” and total oil discoveries have been steadily declining since the 1960s.
Additionally Hubbert’s 1956 prediction was based on reliable and accurate data supplied by USA regulations. For global URR estimates, there is no single equivalent accurate dataset. Datasets regarding the URR left do exist but all include approximations and estimates.
Also, oil-producing countries may exaggerate their own oil supplies for economic gains, as “belief that a country’s reserves are large boosts its economic clout and creditworthiness with international banks and investors.” Almost 90% of global oil reserves are owned by nationalised oil companies which are not legally obligated to provide reliable reserve estimates. To put it simply, “Oil data are not of public domain and this imposes strong limitations on scientific evaluation and control.”
Despite this, “Hubbert curves” are deemed sound enough to be used in calculating not only peaks in oil reserves, but also for other non-renewable resources such as coal, natural gas, and phosphorus.
In the next article on peak oil, we’ll look at the problems of classifying oil as “conventional” or “unconventional”, as well as looking at the conflicts between economics and geology when it comes to estimating the time of peak oil.