Criticisms of Peak Oil
Economist Michael Lynch argues that the theory behind the Hubbert curve is too simplistic and relies on an overly Malthusian point of view. Lynch claims that Campbell's predictions for world oil production are strongly biased towards underestimates, and that Campbell has repeatedly pushed back the date.
Leonardo Maugeri, vice president of the Italian energy company Eni, argues that nearly all of peak estimates do not take into account unconventional oil even though the availability of these resources is significant and the costs of extraction and processing, while still very high, are falling because of improved technology. He also notes that the recovery rate from existing world oil fields has increased from about 22% in 1980 to 35% today because of new technology and predicts this trend will continue. The ratio between proven oil reserves and current production has constantly improved, passing from 20 years in 1948 to 35 years in 1972 and reaching about 40 years in 2003. These improvements occurred even with low investment in new exploration and upgrading technology because of the low oil prices during the last 20 years. However, Maugeri feels that encouraging more exploration will require relatively high oil prices.
Edward Luttwak, an economist and historian, claims that unrest in countries such as Russia, Iran and Iraq has led to a massive underestimate of oil reserves. The Association for the Study of Peak Oil and Gas (ASPO) responds by claiming neither Russia nor Iran are troubled by unrest currently, but Iraq is.
Cambridge Energy Research Associates authored a report that is critical of Hubbert-influenced predictions:
| “ | Despite his valuable contribution, M. King Hubbert's methodology falls down because it does not consider likely resource growth, application of new technology, basic commercial factors, or the impact of geopolitics on production. His approach does not work in all cases-including on the United States itself-and cannot reliably model a global production outlook. Put more simply, the case for the imminent peak is flawed. As it is, production in 2005 in the Lower 48 in the United States was 66 percent higher than Hubbert projected. | ” |
CERA does not believe there will be an endless abundance of oil, but instead believes that global production will eventually follow an “undulating plateau” for one or more decades before declining slowly, and that production will reach 40 Mb/d by 2015.
Alfred J. Cavallo, while predicting a conventional oil supply shortage by no later than 2015, does not think Hubbert's peak is the correct theory to apply to world production.
Read more about this topic: Hubbert Peak Theory
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