Peak Oil Task Force Report - City of Bloomington - State of Indiana

WHAT IS “PEAK OIL”?
Given the finite nature of oil, the fundamental problem is that there must inevitably come a
point in time when world oil production reaches some absolute maximum and then goes
into decline. Attributed to petroleum geologist M. King Hubbert, the term “peak oil” does
not refer to the time when we “run out” of oil. Instead, the problem is that we will run out
of cheap oil. Long before the oil runs out, the difficulty and cost of extraction will have risen
so far that it will no longer be possible to increase the rate of production. Instead of
increasing, production will start to fall. That point – the point at which the growth rate in
global oil production turns into a decline rate – is the point of “peak oil.” When we reach
that point, we will not have “run out” of oil, but we will have “run short.”
In order to grasp the point that “running short” is not the same as “running out,” it is
necessary to understand that the “sipping soda through a straw” model of oil production is
incorrect. That model assumes that it would be possible to suck up the world’s oil at a
uniform high rate until suddenly, one day, the oil is all gone, just as it would be possible to
sip up all the soda in a glass at a uniformly high rate until the bottom of the glass is reached.
The extraction of natural resources such as oil does not proceed in this way.
In reality, what happens is that the oil which is high quality, easy to find and readily
processed is used first. The oil that is inferior, harder to find and/or more difficult to
extract is produced later. The result is something of a bell‐shaped curve, in which
production rises over time to a peak and then transitions into decline. During the decline
phase, oil production continues to fall as the remaining sources become more and more
difficult to extract. M. King Hubbert projected that world oil production would peak around
2000, but continue at ever‐declining rates for another 200 years thereafter. Hubbert’s
projection turns out to have been off by a few years – world oil production did not actually
peak quite as early as 2000 – but he was remarkably close.
Report of the Bloomington Peak Oil Task Force
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