Hubbert's Peak: The Coming Energy Shock

In the 1950’s, a U.S. geologist working for Shell, M. King Hubbert, noticed that oil discoveries, graphed over time, tended to follow a bell shaped curve. Exploration of a region would yield many discoveries at first, but eventually most of the oil would be found, and discoveries would decline sharply.

Production followed the same pattern, but with a delay of ten to thirty years depending on the region. In 1956, Hubbert predicted that production from the lower 48 states of the U.S. would peak in the early 1970s. Hubbert was right; U.S. continental oil production did peak in 1970.

Hubbert went on to predict a global oil peak between 1995 and 2000. He may have been close to the mark except that the oil shocks of the 1970’s slowed our use of oil. Most experts now expect a global oil peak some time between 2006 and 2010.

Global oil discovery peaked in the late 1960s. Since the mid-1980s, oil companies have been finding less oil than we have been consuming.

Of the 65 largest oil producing countries in the world, up to 54 have passed their peak of production and are now in decline. For example, the North Sea oil fields reached their peak in 2001.

Our industrial societies and our financial systems were built on the assumption of continual growth – growth based on ever more readily available cheap fossil fuels. Oil in particular is the most convenient and multi-purposed of these fossil fuels. Oil currently accounts for about 43% of the world’s total fuel consumption, and 95% of global energy used for transportation.

Of course, the oil which is the least expensive to produce is brought to the surface first. Therefore, the oil which remains in the ground becomes progressively more expensive to produce. The cost of the oil becomes unbearable long before the oil actually “runs out.”

The U.S. Department of Energy released a report on Peak Oil in 2005; it is commonly known as the Hirsh Report. This report warns that "as peaking is approached, liquid fuel prices and price volatility will increase dramatically, and, without timely mitigation, the economic, social, and political costs will be unprecedented. Viable mitigation options exist on both the supply and demand sides, but to have substantial impact, they must be initiated more than a decade in advance of peaking."


Peeking Into the Consequences of Peak Oil

Our nation has, in the recent past, experienced a number of clarifying moments that shocked, frightened and killed many. The 9/ll attack, the collapse of Enron and other major business scandals, and the failures connected to Hurricane Katrina are just a few examples. In virtually every instance the warning signals were there but the “dots” were not connected by those with the responsibility to act. Nevertheless, the dots - - the set of clear signals, facts, trends, and details were all there waiting for people to pay attention and to respond.

Once again, we risk ignoring the signals all around us today at our own peril. Indicators are telling us on Long Island and around the nation that we are headed straight for a train wreck even as we go about our business, ignorant of the impending crisis just ahead.

Connect some of these dots: the budgeted revenues of both Nassau and Suffolk Counties dipped in the final quarter of 2005 when consumer spending and thus sales tax revenue fell modestly; national gasoline prices soared in 2005 after disruptions of oil production due to hurricanes and international events; interest rates crept steadily higher as the national debt has exploded; personal savings rates have fallen to the lowest point since the great depression; the cost of home heating fuels climbed by 40% over the past year; growth in the average family income has stagnated over the past 5 years; median family debt has grown 34% over the past 3 years; electricity prices in the metropolitan area remain among the highest in the nation as are total tax rates; the Long Island region remains dependent on cars since it lacks a viable mass transit system; housing costs have priced the average homeowner out of the market; most young people can’t afford to live here; and 56% of residents consider leaving Long Island within the next 5 years. The “dots” show our economic well-being is in grave danger.

Now, to those dots add the following facts: worldwide oil production is predicted to peak in 2006 or 2007; the world’s growing addiction to oil and natural gas is rapidly out-pacing the world’s supply; the human population will increase by 50% from 2000 to 2050; the world may be spiraling toward uncontrolled international conflict over oil resources; the price of oil shot up in one day when terrorists recently tried to bomb a major oil field in Saudi Arabia; a majority of our consumer goods are produced in distant countries and must be shipped here; the price of all essential commodities (electricity, water, waste disposal, food, heat) will grow considerably in response to these conditions; and global warming will shift our moderate climate to extremes of hot and cold and severe storms that we are unprepared to easily accommodate.

The picture the dots reveal is a highly vulnerable and sensitive economic balance that depends on maintaining the status quo. But, the local and national economy is on the edge of significant change. Economic instability will influence the ability of all levels of government to deliver the basic services so prized on Long Island. The cost of operating local governments and institutions, including the schools, is highly dependent on the price of the same basic commodities that individuals will also have to spend much more money on in the near future. And, our tax dollars can not remain fixed and still provide sufficient revenue to meet our civic needs.

President Clinton had a campaign mantra that distilled his entire strategy into four words, “It’s the economy stupid.” Get it? Like the victims of Katrina, no one is going to ride in to save us. Our local fate is in our own hands, even if the external forces at the national level are beyond our control.

In response, our region must recognize this new situation. With the advent of peak oil production, the days of cheap oil and cheap energy will be over. To successfully ride out the major upheavals that expensive oil and energy will force, some strategies are known. Downtowns are the most efficient locations for living and working. Walkable communities, energy-efficient mass transportation along with new north/south corridors and ride-sharing will be essential. Local production of goods and services will be the most cost effective. Green buildings (both new and retrofitted) to drastically reduce the use of resources must become the standard. Conservation will be essential rather than optional. A strong mix of energy sources (green and low-impact traditional) will help to buffer price spikes and resource scarcities as we evolve to renewable energy production. We will need to be both economically self-sufficient and energy diversified.

The peaking of world oil production, and natural gas soon after, is real and imminent. No combination of remaining oil and natural gas reserves will change this reality. This is not a doomsday prediction any more than the “dots” showed that a major hurricane would destroy New Orleans. When the peak occurs, the consequences will be swift and damaging. Making the necessary changes in the regional infrastructure, economic diversity, energy independence and our community model will take time, money and creativity. Many communities across the nation are ahead of us in connecting the dots and planning accordingly.

The call to action is here and denial is not an option. Our region is full of bright, strong and energetic people. Collaborative, bold, visionary action and hard work are our best allies. Pulling together is our best strategy. Let us begin by understanding the full nature of the changes we face. “Thinking globally and acting locally” has never been more relevant.

The Oil Age Poster

An excellent graphic of Hubbert’s Peak is available in the form of a wall poster. It gives a concise summary of the history of world oil production, and projections based on the forecasts of Dr. Colin Campbell, a leading authority on oil depletion issues.

For more information about this poster, please visit their website:

Here is the direct link to a full-screen image of the Oil Age Poster:

On the Oil Age Poster, world oil production peaks in 2007.