The Hubbert peak theory posits that for any given geographical area, from an individual oil field to the planet as a whole, the rate of petroleum production tends to follow a bell-shaped curve. It also shows how to calculate the point of maximum production in advance based on discovery rates, production rates and cumulative production. Early in the curve (pre-peak), the production rate increases due to the discovery rate and the addition of infrastructure. Late in the curve (post-peak), production declines due to resource depletion.
The Hubbert peak theory is based on the fundamental observation that the amount of oil under the ground is finite. The theory is named after American geophysicist Marion King Hubbert, who created a method of modeling known oil reserves and production rates. Hubbert's theory was initially greeted with skepticism by many in the oil industry, but oil companies now routinely use Hubbert's methods to predict future yields of existing oil fields.
Hubbert's peak can refer to the peaking of production of a particular area, which has now been observed for many fields and regions. "Peak Oil" as a proper noun, or Hubbert's peak applied more generally, refers to a singular event in history: the peak of the entire planet's oil production. After Peak Oil, according to the Hubbert Peak Theory, the rate of oil production on Earth will enter a terminal decline. Based on his theory, in a paper[1] he presented to the American Petroleum Institute in 1956, Hubbert correctly predicted that production of oil from conventional sources would peak in the continental United States around 1965-1970 (actual peak was 1970). Hubbert further predicted a worldwide peak at "about half a century" from publication. Many observers such as Kenneth S. Deffeyes, Matthew Simmons, and James Howard Kunstler believe that because of the high dependence of most modern industrial nations on inexpensive oil, the impending post-peak production decline and resulting severe price increases will herald grim implications for the future global economic outlook. Note, because of world population growth, oil production per capita peaked in 1979.[14]
WHAT IS "LIGHT SWEET CRUDE OIL"?
Sweet crude oil is a type of petroleum. Petroleum is considered "sweet" if it contains less than 0.5% sulfur[1], compared to a higher level of sulfur in sour crude oil. Sweet crude oil contains small amounts of hydrogen sulfide and carbon dioxide. High quality, low sulfur crude oil is commonly used for processing into gasoline and is in high demand, particularly in the United States and China.
For much much more information you have to go to this page:
http://www.eia.doe.gov/pub/oil_gas/petroleum/feature_articles/2004/worldoilsupply/oilsupply04.html
Posted: August 18, 2004
Long Term World Oil Supply Scenarios
The Future Is Neither as Bleak or Rosy as Some Assert
By
John H. Wood, Gary R. Long, David F. Morehouse
Conventionally reservoired crude oil resources comprise all crude oil that is technically producible from reservoirs through a well bore using any primary, secondary, improved, enhanced, or tertiary method. Not included are liquids from mined deposits (tar sands; oil shales) or created liquids (gas-to-liquids; coal oil). Earth's endowment of conventionally reservoired crude oil is a large but finite volume. Production from it may well peak within this century. All or very nearly all of Earth's prolific petroleum basins are believed identified and most are partially to near-fully explored. All or nearly all of the largest oil fields in them have already been discovered and are being produced. Production is indeed clearly past its peak in some of the most prolific basins.
Reflecting increasing consumer demand for petroleum products, world crude oil demand has been growing at an annualized compound rate slightly in excess of 2 percent in recent years. Demand growth is highest in the developing world, particularly in China and India (each with a population in excess of 1 billion) and to a lesser extent in Africa (0.8 billion) and South America (0.35 billion). Where high demand growth exists it is primarily due to rapidly rising consumer demand for transportation via cars and trucks powered with internal combustion engines. For economic and/or political reasons, this high demand growth component did not exist in most of the developing world even a decade ago.
A multitude of analysts consisting of retired petroleum industry professionals hailing from either the geologic or business side of the house, a smattering of physicists, assorted consultants, and less than a handful of economists have predicted at various times over the past two decades, and with increasing frequency, that world crude oil production would peak at times ranging from 8 to 20+ years after their forecast. Dire effects on world oil prices, the welfare of mankind in general, and the United States’ economy and lifestyle in particular are typically alleged to implicitly follow the predicted peaks. The times for many of these predicted peaks have already come and gone, or will soon do so.
In April 2000 the United States Geological Survey (USGS) released results of the most thorough and methodologically modern assessment of world crude oil and natural gas resources ever attempted. This 5-year study was undertaken "to provide impartial, scientifically based, societally relevant petroleum resource information essential to the economic and strategic security of the United States." It was conducted by 40 geoscientists (many with industry backgrounds) and was reviewed stage-by-stage by geoscientists employed by many petroleum industry firms including several of the multinational majors.
The above facts prompted the Energy Information Administration (EIA) to take the next logical step by providing the first Federal analysis of long term world oil supply since that published by Dr. M. King Hubbert of the USGS in 1974. The results of EIA's study as presented at the 2000 AAPG meeting and published in July 2000, remain online in slide show format at: http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2000/long_term_supply/index.htm. Since then nothing has happened, nor has any new information become available, that would significantly alter the results. High feedback and sustained requests for "live" presentation indicate widespread cognizance of the analysis among energy policy makers in the Federal government, analysts who focus on energy matters, and senior managers of public and private entities that are major consumers of petroleum products.
The bottom line
Will the world ever physically run out of crude oil? No, but only because it will eventually become very expensive in absence of lower-cost alternatives. When will worldwide production of conventionally reservoired crude oil peak? That will in part depend on the rate of demand growth, which is subject to reduction via both technological advancements in petroleum product usage such as hybrid-powered automobiles and the substitution of new energy source technologies such as hydrogen-fed fuel cells where the hydrogen is obtained, for example, from natural gas, other hydrogen-rich organic compounds, or electrolysis of water. It will also depend in part on the rate at which technological advancement, operating in concert with world oil market economics, accelerates large-scale development of unconventional sources of crude such as tar sands and very heavy oils. Production from some of the Canadian tar sands and Venezuelan heavy oil deposits is already economic and growing.
In any event, the world production peak for conventionally reservoired crude is unlikely to be "right around the corner" as so many other estimators have been predicting. Our analysis shows that it will be closer to the middle of the 21st century than to its beginning. Given the long lead times required for significant mass-market penetration of new energy technologies, this result in no way justifies complacency about both supply-side and demand-side research and development.
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