Minnesota's Energy Future?^©

Minneapolis, MN
October 20, 2003

Part II-A:  Energy &  Resources

Table of Contents
 

The Olduvai Theory and Resources

Similar to travel through a time portal, a new and different energy future is rapidly drawing near.

The awakening public in the 1960s and 1970s affirmed that our living environment was harmed by natural resource based human activity.  The solutions offered at the time were centered on population and pollution.  In the intervening years great strides were made to limit or reduce pollution; however, the growth side of the energy equation, despite important studies and public enthusiasm, was restricted to conservation.  It is understandable why the earlier period regarded growth a central concern: 93% of the increases in U.S. energy use since 1970 is attributable to population growth.  Despite numerous programs and technological advances directed at energy conservation over the years, U.S. energy consumption grows daily.  Although researchers cautioned at the time that energy was a primary concern of growth, the consequences seemed too distant for comprehensive public programs to be implemented.  Our future is now becoming visible and it is a potentially tumultuous period of change.

The earlier studies foretold and researchers and today’s industry specialists conclude that the U.S. and world have either reached or exceeded the limits to energy and biological carrying capacity.  The primary reason is industrial civilization has already exhausted a substantial portion of Earth's initially available fossil energy inheritance and biological capacities.  The root of energy problems is that demand for fundamental natural resources is rapidly outgrowing supply. The challenge for the future will be how to live sustainably on the daily energy income from the sun either directly in the form of solar arrays or in the form of water, wind, and biomass energies.  It is an idea the public appeared to have come to terms with in the 1960s and 1970s.

As the World-3 scenario mentioned in the introduction predicted, there are multitudes of serious resource and population matters rapidly converging at a single point in time.  The World-3 models suggests that now is an appropriate time to quickly revise prior policies and implement innovative population and energy programs.  The U.S. is in serious energy trouble on all three primary energy fronts.  Matthew Simmons states that shortages are occurring almost simultaneously in oil and natural gas (and electricity), that Europe will suffer, and that in North America the turning point will arrive earlier and with harsh consequences.

Punctuating those sentiments, he recently said “for the first time in our nation’s history, we are out of the capacity to grow our use of petroleum products, out of capacity to increase natural gas supply, and out of electricity generating capacity during hot summer days or cold winter days in too many regions of the country.”  Simmons concludes with an analogy of the terrible storm (and related movie) that swept the east U.S. coast two years ago that was labeled “the perfect storm” by meteorologists because of its severity and because it was the coming together of three storms into one, we have a “Perfect Energy Storm.”¹

Richard Duncan at a recent Geological Society of America conference made another more urgent, yet clarifying statement describing the world's looming energy dilemmas in discussing the “Olduvai Theory.”²  The theory measures the relationship between energy and population.  Dr. Duncan summarizes the gravity of the energy situation as follows:

The life expectancy of Industrial Civilization is less than or equal to 100 years: 1930 – 2030 and that energy production per capita will fall to its 1930 value by 2030, thus giving Industrial Civilization a lifetime of less than or equal to 100 years.³

The following graph illustrates the historical patterns of energy consumption in the U.S. since 1635.

Figure 3:  Energy Sources & Use in the United States: 1635 – 2000, %

“Annual Energy Review: 2001”. Introduction. Energy Information Agency. See at < http://www.eia.doe.gov/emeu/aer/eh/frame.html >.

Figure 3 demonstrates that long-term energy trends parallel industrialization and population growth.  Except for the recessionary period of the early 1970s, the trendlines are rising at a steep slope.  The chart suggests the relative importance and therefore potential relative consequences for each diminishing energy resource.  The chart illustrates the early use of wood (biomass) —in Europe until the forests were logged— replaced by coal during industrialization.  The rate of industrialization from 1875 initially using coal (in Europe and U.S.) was soon replaced with an easier to manage and concentrated energy source, oil, and then natural gas up to the present time.  As the graph illustrates, nuclear energy is a relative newcomer.  Of interest is that had coal not been replaced, its reserves would have been exhausted in the 1960s or 1970s.  As will be evident in other figures, beginning at the approximate endpoint of these trendlines, oil and natural gas production begins to flatten and commences rolling over ―a reversal of their previous trends.

On an international, national, and local level, historical patterns of energy use will undergo changes conforming to supply.  Suggesting the changes, in the year 2000, oil accounted for 34.8%, coal 23.5%, natural gas 21.1%, nuclear 6.8%, and renewables 13.8% (including hydro) of energy.⁴

The graph can also be used to examine the reasonableness of claims heard that there are sufficient quantities of baseline energy resources to last well into the century, or next century.  When these claims are made it always under the assumption that use is “at current rates”.  Stating at “current rates” implies at some future point the same volume of an energy will be provided to the same number of consumers or conversely, reducing volumes to match the higher level of consumers.  Examining the chart, for example of Figure 3, if the claim was made for oil in 1950, it would imply restricting the rate of U.S. consumption at approximately 10% for the duration.  The trendline in this instance would turn to the right and parallel the bottom of the chart at the point where oil goes above the coal trendline.  There is an approximately quadruple increase in petroleum use evident in the trendline today.  The implication is that under the “current use” pattern oil would have to be replaced by one or more of the other energies or energy relationships to economic or population growth significantly modified.

Using the Olduvai Theory as a framework, the paper now turns to a discussion of U.S. and world oil reserves and the differences between the optimists and the realists, the government and non-government viewpoints.
 

Petroleum

The problem in forecasting is GIGO "... garbage in, gospel out.
Jean LaHerrere. 2001.⁵

The story of natural resource extraction such as oil, follows a pattern.  First, a use is discovered, sometimes by accident (it burns!), then consumption and production grow hand-in-hand.  In the early years the easily available and inexpensive resources are extracted and larger populations in combination with low and declining cost energies meant increasing economies of scale which in turn encouraged further consumption.  Economies of scale also meant lower unit prices and an expanding middle class.  Additional uses of the resource are subsequently discovered or created and resource use is magnified.  Following this pattern, petroleum with more than 500,000 products derived from it has become institutionalized and the energy foundation of Western Society.

As demand builds the inexpensive and easily extracted stockpiles become depleted and more costly reserves are brought into production.  Because consumer demand is institutionalized (with expectations based on inexpensive supply from earlier periods), consumption rises faster than the resource base, the stage being set for a reduced supply availability.  In the final and the current stage, the energy cost of extracting the resource is greater than the energy potential extracted.  In this period prices accelerate until, to use an economist's term, the price clears the market; that is, until rising prices balance demand and available inventory.  Market pricing contrary to what some believe, does not “create” supply nor energy.  Furthermore, there is nothing intrinsic in using the competitive market to balance supply and demand that prevents the exhaustion of the resource, only that it becomes more expensive overtime.

Unless substitutes are readily available, rising energy prices imply corresponding declines in average standard of living.  Today and in the foreseeable future, substitutes are not readily available and those promoted or considered are small in scale or prohibitively expensive.  The consequence is that the price level necessary to balance market demand and resource availability will increasingly be determined by society's success at arresting population growth, conservation, and implementing the most efficient least costly alternative energy, if any.

This portion of the paper discusses the consumption, reserve and depletion situations for world and U.S. petroleum.  Because of its overarching importance to society and dearth of general public or media awareness, this section discusses world and U.S. food and energy relationships, major sources of oil and natural gas including the role of Alaska’s ANWR, the process and meaning of “peaking”, relationship to international instabilities and a brief examination of the oil and US-dollar relationship and its potentially serious effects on the U.S. economy.

Recent Energy Information Agency (EIA) data indicates the world in early 2001 very likely reached the peak in production of conventional oil.  “Peak production” has another side: peak depletion.  Because the industry and the general public think in terms of production it is not difficult to understand the decline in production.  Consider also however, the oil pool has diminished to the point where the ability to increase the rates of depletion or extraction has passed.  Petroleum geologist and Princeton University Professor Kenneth S. Deffeyes succinctly describes the petroleum situation stating that oil production will soon peak and that world oil production “will fall, never to rise again.”⁶

Saudi Arabia is an excellent example of Professor Deffeye's research.  Saudi Arabia's Ghawar petroleum field is the largest oil reservoir discovered and after being pumped for decades estimates are that it still contains 70 billion barrels of petroleum.  However, clearly demonstrating the coming petroleum situation, Chip Haynes writes in a prophetically titled article, “Ghawar is Dying”, that's “only an 875 day supply of oil for the world at the current rates of use.”⁷

Although recent data indicate oil production has peaked, industry estimates that in the 2004 to 2007 time frame, at the latest, all known and estimated oil reserves will fail to pace demand, falling in absolute and percentage terms.  Adding non-conventional sources of oil buys less than a handful of additional years.  Figure 7 and Table 8 (p58) indicates the actual volume level of the peak is likely to be reduced because of the worldwide reduction in economic activity in the previous two years reduced oil consumption.  If a recession had not reduced economic activity the production peak would have been higher because of higher use of energy and arrive earlier because of greater economic activity.⁸

The fact that petroleum resources are waning underscores the automobile industry’s harried rush to design and mass produce a substitute to existing internal combustion engines.  Oil fired generating plants are no longer constructed, and many existing plants are often retrofitted to burn natural gas.

There are practical and logistical impediments to a speedy solution.  Although no Super Giant fields have been discovered for decades, if several were discovered it would not be in time to prevent peaking and reversing the subsequent resource decline.  The fundamental reasons are that the peak has been achieved or is rapidly approaching, no sufficiently large field has been discovered, and about eight years are required to construct the necessary infrastructure in order to make the additional oil or gas available in quantity.⁹  Consumption is another reason.  Would it make a significant difference?  The world’s rate of extraction and growth combined with declines in petroleum inventory imply that finding a second colossal oil field such as “Ghawar” would result in approximately six or seven additional years of oil consumption. (Assume 140 billion barrel field and 50 million barrels daily production.)

On the other hand, some industry representatives and government allies declare there isn't a looming petroleum shortage and that reserves are more than adequate for the foreseeable future.  This viewpoint is evident in the “Taylor's Curve” showing the typical rise and subsequent fall.  However, the Taylor Curve is different: after a few years of decline, the trendline levels off.  It assumes substantially larger oil reserves —many “Ghawars”— will be discovered and immediately made available, more than petroleum scientists estimate.  The economic reason underlying the windfall of reserves is the assumption that price elasticity will “create” reserves as needed.  This is further discussed elsewhere; however, it is correct in that increased prices discourage demand, thus tending to balance supply with demand.  Although eternal optimists, even the U.S. Geological Survey (USGS) does not support this position.¹⁰

For example, in the September 2000 issue of “Scientific American” magazine, the U.S. Geological Survey (USGS) raised its previous estimate of the world's crude oil reserves by 20%, to a total of 649 billion barrels.  Although it was an attempt to downplay the arrival of the non-oil era, the USGS data confirms that even under the most optimistic assumptions, there remains less than 30 years of the petroleum era.  The Olduvai theory confirmed!  Although the intention was to suggest there is ample time for the transition, the report also stated that in less than 15 years, by year 2015, virtually all oil consumed in the U.S. will be imported.

Mirroring the statement opening this section from Jean Laherrere and the quote from the DOE/EIA in the section that follows on world oil, the same article included a quote from Dr. Cóilín J. Campbell.  This preeminent private oil industry analyst found the USGS estimates overly optimistic: “it's only the low end of this scale that has any practical meaning; the other end of the scale is a very bad estimate.”¹¹

Consistent with the government's position is the view promoted by the industry flag bearer, the American Petroleum Institute (API),

•  “.... it's unlikely that our demand will ever exceed or use up our supply. As supplies grow scarce, oil prices will begin to rise, and people will turn to a more abundant, less expensive alternative. In the near term, with oil products both economical and practical, alternatives will find it hard to compete.”

•  “The shift, when it comes, won't happen overnight, because oil supplies both conventional and unconventional are substantial. Moreover, the change is likely to be as painless a transition as when people switched from wood to coal to heat their homes or substituted computers for typewriters to prepare letters and documents.”

•  “World reserves are greater now than ever before. Even if we never discover another drop of oil, current reserves will be able to sustain the current rate of consumption for another half-century.”

•  “Taking into account probable future oil discoveries ... this amount of oil would sustain the current rate of consumption between 63 to 95 years.”

One must wonder if a reader could misinterpret what may be attempts at humor in the statements of industry advocates?  After all, replacing the approximately 60% of petroleum used in transportation requires considerable thought, money, and time.  And tossing a lump of coal into a pre-existing cast-iron wood stove has no comparison to replacing the worldwide use of gasoline!

Four brief points will be mentioned before addressing the substance and evident inconsistencies of the API and government positions.  First, although numerous and expensive attempts have been engineered to develop alternatives, there is simply no resource or technology on the horizon that could substitute for oil.

Second, any transition to a petroleum alternative will require the consumption of additional petroleum (even as reserves decline), and the nearly total and simultaneous overhaul of the energy infrastructure of this and all other petroleum based societies.  The social and economic price of this transition will be greater than the sum of the infrastructure costs producing the societies seen today.  Third, there can be no doubt, as Dr. Cóilín Campbell said and Jean LaHerrere agrees the “probable future discoveries” are generous to a fault.  Facts, including the USGS's own survey, confirm the opposite stance.  And lastly, the fact that the API suggests that oil consumption is static, “at current levels”, incredulously overlooks the fact that oil consumption is increasing and in some nations rapidly increasing, exceeding 7% in Asia.  A rate of 7% demand growth doubles oil consumption every 10 years.

Further aggravating the situation is that as developing nations continue to climb the consumption ladder from third to first world consumption levels, their oil use will rise in sync with development.  In fact, oil consumption in the developing world has already reached 40% of the world's total consumption.  The mind-boggling consequence of the rapidly approaching oil capacity constraint is that there are inadequate resources to match the oil requirements of an expanding U.S. population, the world's swelling populations, nor the hoped-for increases in living standards.

Although government and industry energy planners do not publicly admit the limited future of petroleum or natural gas, the oil transition has begun.  Realizing the post-petroleum era is rapidly approaching, industry (and government to a lesser extent) is taking steps to be players in the coming new era and to define its terms.  Evidently Big Oil and automobile companies understand the closing situation, yet vary their statements with the audience —while actively searching for alternatives.  For example, note the vigorous car industry efforts to have oil equivalent, efficient gas or electric powered vehicles.  Many oil fired electric generating plants are being retrofitted and new generating facilities are frequently designed and constructed to use natural gas.  As discussed earlier, natural gas, in smaller volumes than the original oil, is the final energy product extracted from a petroleum field.

Reasons for underplaying the situation are briefly noted in several areas of this paper —the discussion of Mexico's looming energy dilemmas is a case in point.  The fundamental blueprint appears to be one of limiting the public's understanding and to shield financial and other economic interests from the consequences.  For example, following the lead of California (and suggested by recent Minnesota developments), if the actual magnitude of energy problems were widely known would the current systems of private energy production and delivery be nationalized?

Consumers could become unduly apprehensive and world economies impacted if world leaders, including President Bush or OPEC President Rodriguiz, were to publicly express concern about future reserves or declining production.  One likely consequence is that it would encourage unnecessary resource competition and potentially inappropriate and uneconomic allocations between nations.  On a more subtle level, because manipulating reserve estimates also manipulates prices and profits, it can be used as an instrument to influence selling prices and possibly reduce probabilities of Islamic nations from using the oil weapon.  Simultaneously, it would tend to discourage money from flowing into alternative energies and technologies.  Or perhaps our good Canadian neighbors would be less likely to transport their declining resources southward, and Mexico, its energy resources northward, if prices were not, at least in some measure, artificially set and public awareness dampened.

Once the public becomes aware of the futility of maintaining the status quo, further inroads to support will be a formidable obstacle to new programs.  Conservation programs in developed nations may be difficult to mandate and if implemented successfully have little if any impact on reserves.  With the Western nations in denial (including the State of Minnesota), how developing nations react, first to genuine world resource limits and soon after, to actually diminishing supply is a question not sufficiently addressed today.

In a similar conundrum, the West's options for dealing with oil dependencies are limited.  Further, there are few internal options Western nations can accomplish economically in the required time horizon to effect changes.  Any changes will be difficult to implement, and come at great political cost.  In the meanwhile, the West can continue to blame OPEC and demonize the oil producers and companies in an effort to shift responsibility, from taking a science-based rational approach to domestic U.S. actions.
 

World Oil

Get Ready For Another Oil Shock!
  L.F. (Buzz) Ivanhoe. Petroscientist. 1997¹²

Today, daily world petroleum consumption is approximately 80 million barrels.  Of that 80 million, the U.S. produces about 10 million.  It is evident from the gargantuan volumes of oil consumed that society is dependent on what is known as Super-Giant fields for oil and natural gas.  “Super-Giant” fields are measured in billions of recoverable barrels of oil.  These large reservoirs explain how supply has been maintained with substantial increases in use.  Analogous to a large swimming pool or lake, reserves available in the “pool” greatly exceeded the oil volume demanded —producers only needed to crank open the spigot.  However, this analogy does not, cannot, suggest an impending peak.  Many of the important oil fields were discovered in the 1930s, drilled in the 1950s to 1970s and have now reached or exceeded maximum production.

The Super Giant petroleum fields are primarily responsible for the development of the world’s economies seen today.  Not considering other factors, the Middle East and U.S. oil fields were largely responsible for more than half a century of Western and worldwide economic development.  There can be little doubt that the success of industrial democracies —especially the U.S.— was the consequence of abundant and cheap oil and the equalities and the freedoms it permits.  It is ironic that in order for Western democracies to continue in their present forms, oil from Muslim and non-Western nations is required.

The plentiful and cheap energy era will not be repeated.  It is not that oil will be exhausted soon; only that its affordability will soon begin a relentless decline.  According to petroleum industry specialists, the world's petroleum reserves —even assuming locating considerably more— will peak sometime between the years 2000 and 2010, shown in Figure 5 (p56).  Research by oil conglomerates such as Agip (large Italian oil company) and Atlantic Richfield (Arco) and many experts also offer a less optimistic view than the government or API, anticipating a world oil peak around the year 2005, perhaps as early as 2003.

There are other forms of petroleum and petroleum-like structures that could provide additional supply.  Oil sands and shales or methane hydrates for example.  The sum of these alternative or unconventional oils are estimated to total more than three or four times the conventional.  However, as will be discussed, they are difficult to extract, place the environment at risk, are unaffordable, and often use more energy to obtain than contained in the resource.

The International Energy Agency (IEA) also offers a different, overly optimistic, scenario than the government or API view seen in the previous section, forecasting oil production peaks in the year 2000 for the world excluding the OPEC Middle East, 2015 for OPEC Middle East, and 2012 for world oil supply.  The IEA projects a peak in conventional oil in 2012 with 78.9 Mb/d and then, as has occurred in the U.S., then the beginning of a steep decline, a decrease to 72.2 Mb/d by 2020.¹³

On the other hand, preeminent oil geologist Dr. Cóilín Campbell states “it now appears that the world capacity limits were breached at the end of 2000, and oil prices began to soar when it became clear that the historic trend of growth at about 2% could not be maintained…”  In other words, Dr. Campbell concludes that the peak of conventional oil was reached two years ago, in the year 2000.¹⁴  Actual EIA production data supports Dr. Campbell.  Non-OPEC production for August 2002 was 922,000 barrels greater than the previous year and September 2002 non-OPEC production declined to 417,000 million barrels above September 2001.  Demonstrating the continuous declining trend, September 2002 was 505,000 below April of the same year.¹⁵

Regarding the projected peak, there is now better information available.  A peak in oil production was initially found to be in the year 2000, as Dr. Campbell suggests, however, revised EIA production data released January 2003, indicate the actual world’s production peak was achieved in early 2001.  The Iraq situation combined with Russian increases implies that the 2001 peak should be marginally exceeded: extending the peaking time period through 2003 – 2004.  Because of minor revisions the actual “peak year” will be known only several years after the fact.

Of greater immediate consequence is that the major petroleum exporting nations have little additional reserve production capacity.¹⁶  Figure 4 shows the difference in the year of maximum discovery and annual discovery compared with production.  The world’s peak year of discovery was 1964 and 1980 the final year discovery paced consumption.  The subsequent discovery falloff was, at least in part, from the resulting oil surplus.  The trendline marked with dark diamonds shows the number of new drilling rigs each year.  The trendline demonstrates that the spirited attempts to locate new oil fields peaked in 1980 and subsequently succumbed to geologic realties.  The chart also illustrates that despite periods with price spikes over decades, little or no lessening of the consumption gap is evident.  In the year 2002 total world discoveries was only approximately 15% of consumption, 3 – 6 Gbl.¹⁷  The failure to close the gap in recent years using sophisticated discovery and drilling technologies is clear as well.

Announcements of “new discoveries” often are of expansions of existing, unknown but calculated to exist fields or, more likely, revisions in existing reservoir estimates ―total volumes are fixed.  Thus, the heralded “new discoveries” are known.  Because they are not “new”, the correct approach is to backdate the field estimates as recommended by Jean LaHerrere and Cóilín Campbell.  This approach correctly identifies the resource and better informs decision makers and public of actual inventories.  The trendlines vividly demonstrate that at some point in production (see Figures 19, p123, and 21, p128) the physical hold on the resource exceed the economic costs of extraction —the Mideast reservoirs being the case in point.  The consequence of the geologic reality is that further production results in negative energy and net loss of energy capital for society.

Figure 4 illustrates the trend of world discovery and consumption over the previous four decades.  The chart demonstrates that despite desperate searching, no new Super-Giant field has been discovered since the late 1960s.

Figure 4:  Oil Discovery vs. Consumption 1960 – 2002 (April)

    Surplus/Discovery: Vertical bars (red/dark gray). Wells/Consumption: Trendline
Chart courtesy of Jean LaHerrere. See original at < http://www.hubbertpeak.com/ >.

As the graph illustrate, reserve growth from drilling and discovery has not kept pace with consumption for more than two decades.  Experts’ state there is approximately a 20-year span between discovery and consumption.  This is clear from the above figure where the world’s peak oil surplus (discovery) is about 20-years before the peak in drilling/consumption.  Similarly, the steady decline after peaking and the generally increasing discovery-consumption gap.

If the opening quote from the DOE/EIA and the preceding discussion failed to heighten doubt regarding the future of oil, then a September 2000 quote from the president of OPEC should: “we are approaching a crisis of great proportions because oil production capacity is reaching a limit.” Ali Rodriguiz, President of OPEC, reminding oil consumers of a period of long lines and rapidly escalating prices in the same presentation went on to say that “the world could soon face an energy crisis similar to the one that hit Western economies in the 1970s”.¹⁸  The high porosity of many OPEC oil fields implies that high levels of production are possible even as field capacities decline.  It suggests what has been stated by OPEC authorities is accurate: the fall-off in Mideast production is likely to be unnoticed and rapid after it occurs.

As noted, almost all major oil producing nations are now in decline or will soon reach maximum production.  Moneyed interests will likely consult resource geologists about these matters and conclude that investing in additional oil production facilities in declining fields could be hazardous to their financial interest.  Thus, it is evident there are prudent reasons underlying the substantial programs funded by Big Oil to develop natural gas production in, for example, Saudi Arabia and Kuwait.  The politics of this matter will be left to another author to discuss.

The transition to natural gas is clear evidence that the major oil exporting nations are nearing or have reached peaks in oil production and that despite increasing demand, oil reserves are beginning the final stages of depletion.

The graph of world oil production and reserves depicted in Figure 5 is generally known as the “Hubbert Curve”.  The Hubbert Curve was developed in the 1950s and 1960s by Shell Oil Company’s geoscientist, M. King Hubbert.  The curve combines the production and reserve profiles of individual wells in a reservoir or in countries.  Dr. Hubbert linked rates of discovery with production finding a lag period of two or three decades between discovery, maximum production and decline (note Figure 4).  The rising curve represents inexpensive and efficient production; the descending curve portrays the investment of additional energy to produce declining production.  The dotted line indicates actual production and the solid line is actual smoothed forecasted production.  The chart illustrates that following actual peak production, the ensuing decline appears similar to a roller-coaster ―gaining speed as the decline gains momentum, averaging 2% to 3% percent per year.  The declining line assumes that societies will moderate consumption consistent with the decline in reserves or/and substitutes are readily available.¹⁹  If not, the trendline’s slope will steepen as population and consumption increase.  Further, it indicates the rate of change in resource reallocations within and between industries and nations.  The wealthy and the mighty will likely control the queue changes.
 

Figure 5:  World Oil Production & Reserves

Chart courtesy of Dr. Albert Bartlett. Dots are actual; line is calculated production.

The chart clearly illustrates that the world is in the midst of the time horizon for maximum oil production and either has or soon will begin its inexorable decline to the volumes consumed in a less industrialized period of history.  It is important to understand the projected production trendline reflects “proven” reserves, future reserve projections from known fields, and “reserves” thought to exist mathematically but not actually discovered.  The graphical consistency with the 1930 – 2030 period of the Olduvai Theory is remarkable.  Of substantial interest is the extent of the production decline which the chart illustrates: from 23.0^{^10} to 2.5^{^9} barrels per year, about an 80% decline within less than 30 years.  The ascent of the left side is propelled by population growth.  The oil decline on the other side will be accomplished with the same population level as at the peak plus growth subsequent to peak production.  In brief, absent societal changes, the descent begins slowly then gains momentum to rates which are multiples of the ascent.

Let’s place this difficult to comprehend resource development in a readily understandable context: the petroleum accumulated over millions of years will be virtually exhausted in the lifetime of a person born in the 1930s or early 1940s.  Absent immediate population and growth reductions and patterns of consumption, the trendlines suggest that a Western-society child born in the year 2000 is unlikely to own a vehicle or fly in an airplane after graduating from elementary school.

Trends demonstrate that the time to prepare for significant production declines is now ―that within less than a handful of years decline momentum accelerates.  Oil production will remain at high levels for several years before commencing a decline that will never be reversed.  The repercussions will be across the social and economic spectrum.

Figure 6 illustrates nature of the peak and ski-jump appearance of the ensuing decline.  The explanation for the slope of the decline is that the population on the left side of the trendlines are one or more billion fewer than the slide-side.  Due to growth, the rates of decline relative to the differences between the four resource depletion scenarios are minor.  The graph illustrates three year old data.  It appears the peak has been achieved, as indicated —2000 or early 2001, and the ensuing decline is set to get underway.

Figure 6:  Four Oil Depletion Scenarios

Chart courtesy of Dr. Cóilín Campbell. See original at < http://www.hubbertpeak.com/midpoint.htm >.²⁰

 
Another method of examining oil production illustrated in the preceding charts is seen in Figure 7.  Figure 7  illustrates the world’s total conventional and non-conventional oil production relative to world population.  The chart uses actual world population and oil production through 2002, then considers Census Bureau projected population to 2050.  Projected conventional and non-conventional oil production is from Table 8 Column D (p58).  The graph indicates that total daily oil production per capita peaked in 1979 at 0.0153 barrels.  In gallon terms the per person maximum was 0.64 gallons per day or 234 gallons per year.  During year 2003 per capita production will have fallen from the peak by more than 23%.  By 2010 per capita oil production will have fallen approximately 33%, 15 years later, 2025, approximately 67%.  Consistent with Figure 5, including increasing non-conventional oils, before 2050 per capita oil will have fallen more than 87%.
 

Figure 7:  Per Capita Conventional + Non-Conventional Oil 1970 – 2050

Table 8 contains the numerical data on which Figure 7 is based.

Table 8:  Per Capita Conventional & Non-Conventional Oil 1979 – 2050