There are several "flaws" in this theory. I'm not a geologist, but with my background in economics and statistics, they are pretty evident.
First, let me start by saying that the "oil crisis" which will stifle mankind has been predicted on at least 3 previous occasions, and all have been incorrect. The 1972 Club of Rome report "Limits to Growth" predicted mass starvations and loss of energy supplies well before 2000 dieoff.org
So, the pessimist theory is intact, and that keeps me happy. We need people like Malthus to keep us honest through the space of time.
Secondly, Hubbert may have been correct in the lower 48 states (I don't know, I don't study oil supplies that closely). However, from what I've read about the oil industry, the main problem in extraction has been less the supply and more the cost of extraction. This is a far more devious component in energy. Oil supplies, once feared to last 15 more years in 1975, are now at 20+ years worldwide and still climbing. One has to question how this conundrum could exist if Hubbert were correct (though these calculations were not used via Hubbert's model, they are probably more pessimistic and therefore just as viable).
The cost of anything rises over time as the need for it increases or its supply decreases, or it becomes more difficult to get. In the US (and oddly in the former USSR, due to bizarre cost structures), oil is very expensive to extract. This, of course, is a problem in a competitive economy, as Julian Simon pointed out. If your costs are high, the overall costs of most basic goods are in state of constant decline (this has been proven time and again and Simon won a famous bet about this). Therefore, the extraction process for oil has had to shift to areas where cost effectiveness is key.
Thirdly, Hubbert needs to account for substitution effects. The US kept its use of energy stable for quite some time after the oil shocks of the 1970's. It was only in the 1990's that real usage began to skyrocket again (with SUVs labelled as the culprit).
Why did that period of stability occur? Substitution effects. Daylight Savings Time was a drop in the bucket in the 1970s, but other factors played a very important role. Houses are, today, far more energy efficient than ever before, as insulation is used extensively. Consumer goods are more energy efficient. Most cars (not SUVs) became much more energy efficient (though this has levelled off).
But primarily, the open economy promotes such things as ethanol or gasohol, electric or hybrid cars, solar power, etc., as oil prices rise.
Finally the real problem we face is the desire to keep oil cheap. Hubbert could be right if prices are kept artificially low, so that we use up all the available oil. This, of course, would be very hard to do, but is possible. The reason it is hard is simple to explain. Typically, most resources are not "used up" in a bell curve. Most resources follow a "viral curve", which shows a parabolic shot upward with corresponding short reversal, then a levelling off. The question is at which point the reversal levels off, so that sustainability can be maintained.
I wouldn't say Hubbert's Peak is impossible, but merely unlikely if open economic conditions are upheld and promoted. However, a constrained economy would create a terribly pessimistic outcome that is not unlike that predicted by the Club of Rome.
By the way, the most telling point in this article was in the final 3 paragraphs. The concept that scientists are supposed to "make predictions" is incorrect. Ask any scientist what his primary dictate is, and they'll tell you it is "to explain why things occur". The corresponding offshoot is that usually predictions CAN occur from these explanations...IF conditions are constantly the same (which, as an economist, I can tell you they rarely are anywhere in science). |
