Peak Oil Theory

When Virgin Group Chairman Sir Richard Branson isn’t trying to commercialize space travel, opening health care clinics that offer alternative and holistic therapies alongside conventional medicine, trying to set speed records for sailing across the Atlantic, or hanging out with the likes of Nelson Mandela and Peter Gabriel, he’s worrying about the world running out of oil. As this article from The Guardian reports, the shaggy, bearded billionaire has been telling anybody who’ll listen that modern civilization is facing an imminent, potentially disastrous shortage of petroleum. According to the prepared remarks from Branson’s recent appearance at the World Economic Conference in Davos, Switzerland:

“The next five years will see us face another crunch — the oil crunch. This time, we do have the chance to prepare. The challenge is to use that time well.”

There was a time when such talk would have been dismissed as the dystopian delusion of neo-Luddite granola heads, Malthusian killjoys and fans of the Mad Max/Road Warrior trilogy, in which an assortment of bikers and crazies battle with a leather-clad Mel Gibson in an oil-starved, anarchistic future. But no longer. The “Peak Oil” theory — belief that the industrialized world is rapidly running out of its most critical natural resource — seems to be catching on in high places. Branson is just one of a group of like-minded British business moguls who’ve formed the Industry Taskforce on Peak Oil & Energy Security, which is urging a switch away from oil to alternative energy sources.

Basically, the idea behind the Peak Oil theory is that the world’s supply of oil is finite. At some point, the most accessible deposits will run dry, and the cost of extracting and refining the more difficult-to-reach remainder of the supply will exceed the price that it fetches on world markets. As a result, production will fall. If that happens rapidly enough and there isn’t an alternative energy source available, oil prices will then dramatically spike, and civilization will crumble. (Well, at least in the Mad Max version of the theory.)

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Peak Oil is a notion that’s been bubbling up slowly to the surface for a while. Its creator, geophysicist M. King Hubbert, first warned in 1949 that the world oil supplies eventually would run out, and in 1956 used models to predict that U.S. oil production would peak and begin to decline by 1970. (As it turned out, he was off by only a year, at least as far as the lower 48 were concerned.) In a 1974 National Geographic article, Hubbert boldly prophesied that “the end of the oil age is in sight.”

While Hubbert’s gloomy scenario remains controversial, proponents of Peak Oil point to some ominous projections by experts such as the International Energy Agency, which predicts in this 2009 document that output at existing oil fields will drop by almost two-thirds by 2030, to the extent that it will provide only about a fifth of the world’s oil demand. Development of thus-far untapped deposits and/or discovery of new ones would have to make up about 60 percent of the difference, which is a fairly scary variable to have in the equation. (Even scarier: Last November, The Guardian reported an unnamed whistleblower’s allegation that the IEA, under pressure from U.S. officials, has been downplaying the impending shortage and overstating the likelihood of new oil discoveries in order to stave off an economic panic.)

Skeptics of the Peak Oil theory — we won’t call them deniers, for the time being — argue that all this is largely alarmism. Estimates of the world’s remaining supply of oil vary widely, depending upon which expert you consult. (Here’s a recent Cambridge Energy Research Associates report, for example, that estimates that 80 percent of the world’s original supply of oil — about 3.7 trillion barrels — still remains to be extracted.) At the same Davos conference where Branson sought to shake up world leaders, Khalid Al Falih, chief executive of the Saudi Arabian Oil Co., reassured them that fears over future supplies of oil were exaggerated. “The issue of peak oil has been pushed behind,” he said, according to a Dow Jones news service article. “There are plenty of resources out there.”

Visit the “A World Without Oil” forum post to discuss whose responsibility it is to reduce our need of oil. Do you think it’s the responsibility of the general public? The government? Or the responsibility of corporations and businesses?


  1. Bill Simpson
    March 8, 2010, 2:18 pm

    It’s actually a lot worse than most people think. Consider that about 95% of everything that moves, does so using some oil product. Developed countries can’t function without transportation. Nothing comes from nearby anymore. Business has become globalized.
    Unless you live on a farm and grow your own food, diesel fuel grows and transports your food. Go only one week without food, and you can do almost no physical work.
    Yet the real oil problem, which we will face a lot sooner than most people realize, is not a physical oil shortage. Oil won’t disappear overnight. The first thing that will happen is that you will lose your job. And you won’t be alone.
    As soon as world oil output begins to decline (my guess is 2016, but no one really knows, because of the lack of accurate data on world oil reserves) the price of oil will begin to explode. It has to. How much would you pay for a glass of water if you hadn’t had a drink in three days? Everything you had, that is how much. Oil is not that bad, but it’s close.
    Today people spend a relatively small percentage of their income on fuel. Gasoline is still very cheap. Try to walk the distance that a gallon of gas can carry you, and you will see how cheap it is. That will all soon change. When it does, you will find how hard it is to do without oil. As you, and everyone else, are forced to spend a lot more for fuel, you will be forced to cut back on spending on everything else.
    What happens when people stop spending money going out to eat, buying clothes, going on vacations, etc.? The jobs of the people who provide all those goods and services disappear, and the economy spirals downward. That will be the first oil problem, but others await.
    Pretend that you are an oil exporter. Once the crisis starts, what will you do. Well, if you are as greedy as me, you will realize that the LESS oil you now export, the greater total wealth you can accumulate before your oil runs out. The less you export, the more the price will go up, because no one else has any oil to fill the demand gap. Hold a few hundred thousand barrels off the market, and watch the price go from $300 to $350 a barrel. You make MORE money by producing LESS product! How great is that. People are desperate for the stuff. They have discovered that starting and stopping refineries is very costly. And the riots and strikes are spreading.
    I could go on, but I think that you get the picture. We will all soon be facing a life threatening crisis. Had the Federal Government started to act 15 years ago, catastrophe may have been averted. Now, it is probably too late. I will be glad to be proved wrong, but considering the vast size of the petroleum industry, I doubt that I am.
    A process to convert natural gas to liquid fuel does exist. But building enought such plants, and producing the gas to fed them in time to avoid economic collapse is probably now impossible. Anyway, good luck. Bill Simpson in Slidell.

  2. NationalGeo
    March 8, 2010, 3:31 pm

    I think that it should not be argued about what possibly would be recovered as it should be said it is a rate problem. The amount of oil that could be extracted from the earth is hitting it’s limit and the costs will go up. At what level is too high to afford? Knowing oil is the foundation of 90% of how the US runs, the price of everything would go up. The price of oil is not sustainable above $150/barrel. Not only would you drive less, you would eat less. At this point, you should educate yourself. Start with the 300 year history of the consumption of oil graph. Then look at the historical graph of human population. I would agree with Bill. Your best bet is to get off the grid. Major corporations/government would need to stress public transport and maximizing solar technology. Since solar currently is less than 1% of what is currently used, I would guess that the time to change has passed. Get off the grid that is about to collapse, that is your best bet.

  3. Acenyc
    March 8, 2010, 3:56 pm

    It’s really simple. The oil industry is the most powerful force in the universe. They have no intention of doing anything to develope alternative energy sources until we get down to the last drop—and then it’ll be too late. All they care about is money. They want oil to go up $200.00 per barrel. All they see is the profit.

  4. bradfregger
    March 9, 2010, 7:28 am

    I tell people all of the time that you can be trusted, pointing out the wonderful work you did showing what happened to bring about 9/11, telling my friends that you can be trusted. … And then … you have to present this slanted report full of spin.

    First of all, what do you mean my "some lost loved ones." What a dumb comment. … An honest report would have told us how many would died … probably tens of millions. There definitely wouldn’t be enough left to move back into the cities for decades, if not centuries. But … of course … to state the total number of deaths would have destroyed the feeling you wanted to give that it might be tough, but ultimately we’d be much better off. How can you live with such a lie?

    Second, the world you presented is happening and we don’t have to have an end to oil in order for it to happen. In fact, it will probably happen first in the U.S. if the government doesn’t get in the way to much. Doesn’t, through incompetence bring about this very scenario. Oil doesn’t have to go away, countries only have to stop shipping it to us.

    Third, where is all of this electric power coming from? This is the most ridiculous oversight of all. Everybody’s mining for lithium, which means we haven’t improved our battery technology and yet we’ve got all this electricity … how dumb can you be? Anyone whose done any research knows that alternative energy sources will NOT be viable until we have solved the storage problem.

    Fourth, I’d like to see the figures on getting all that biofuel processed and to market without oil. I’ll admit I don’t know them either. But, I wouldn’t be surprised if it took almost as much energy to produce and transport it, than it delivered. Regardless, there wouldn’t be enough left over to produce all of the electricity that we seemed to be using.

    It was good that you showed the small farms, because, there definitely wouldn’t be a way that we could transport food across the country, let alone around the world. In addition with all that biofuel being grown, there wouldn’t be any large food producing farms. So … no meat, nothing to feed the cattle, pigs, chickens, etc. PITA would finally be happy, the vast majority of us will be vegetarians.

    I honestly don’t know how such a well respected organization can allow such a simplistic report to be aired without some sort of qualification.

  5. usc1801
    March 12, 2010, 6:52 am

    I think the Peak Oil Theory is happening. Mexico’s oil production is way down as their "easy oil" is running out. We’re having to go further and further out into the gulf, rely on Canadian oil sands, etc. Hopefully, we’ll see this as reason to begin substantially increasing efficiency and diversifying our energy supplies to include wind, solar, nuclear, and natural gas. For example using recycled aluminum uses 95% less energy. There are a lot of areas we could substantially ramp up efficiencies to greatly reduce energy use.

    Methane gas from garbage dumps can be used to produce power. Natural gas can be used for cooking, heating water, producing power, and to fuel cars and trucks. People in the Southern states can use solar power to heat water and produce some energy. Some western state can utilize wind power. While environmentalists will hate it, nuclear power can power a lot of the nation and to be used for charging electric cars. We need massive research on better and more efficient means of making biofuels. Corn ethanol is horribly inefficient barely producing more energy than they take and using 4 gallons of water for 1 gallon of fuel.

    As for food, cities and towns need to be encouraged to plant food and fruit crops. I think what Detroit is looking to do, convert desolate and blighted areas of town into agricultural areas, is a great planning. While this show is depressing and the thought of oil disappearing overnight shocking-the future isn’t a bleak. Hopefully oil will slowly phase out as efficiencies and alternatives ramp up to take their place. I certainly hope this program encourages a lot of discussion on how we can live without oil-and coal.

  6. zekeput
    March 12, 2010, 3:39 pm

    Once again, an article written by someone without a clue as to what the "Peak Oil theory" is all about. It is not about "oil fields running dry". It is about oil fields reaching maximum production meaning less production from that point on. Each field has a "peak oil" point. When sufficient numbers of fields reach that point and insufficient numbers of new fields coming on line to replace the lost production, we have a world "peak oil" event. Demand exceeds maximum production. That’s it. Not about oil fields running dry or running out of oil completely. There will be oil around a long time from now.
    It will be increasingly too expensive for the mass of population to purchase or to be utilized in the manner we do now. Overtime, societal and financial dislocations will be massive beyond our comprehension. As others have said, it is already beginning.

    My hope is, someday, articles will be written by those who know what the hell it is they are talking about. There’s an old saying, in order to solve a problem, you have to know what it is. We’ve a ways to go. So far all I read is misinformation and ton upon ton of simplistic solutions. Like the rain makers of old, there will be billions made by wind power, solar power, alternative solutions, etc. All of these things will help but the scale of the issue and speed of onset will far outweigh their impact.

  7. spikeof65
    March 13, 2010, 9:59 pm

    Zekeput, I don’t think the author is ignorant. I think he’s a self-censor who dutifully keeps himself from thinking things through. National Geographic isn’t interested in irking its corporate sponsors, who have no answers to this crisis. So, to write for them, you simply stop asking and thinking at key points.

  8. sandy t
    March 19, 2010, 3:54 am

    It’s time we all took a real hard look at how we use the oil and gas industry.
    By products are made from the oil and gas industry that everyone uses which I would like to point out even the anti oil and gas people use on a day to day basis.
    These are products that are made from the byproducts of the oil and gas industry:
    Ammonia, Anesthetics, Antihistamines, Artificial limbs, Artificial Turf, Antiseptics, Aspirin, Auto Parts, Awnings, Balloons, Ballpoint pens, Bandages, Boats, Cameras, Candles, Car Battery Cases, Carpets, Cash Registers, Caulking, Combs, Cortisones, Cosmetics, Crayons, Credit Cards, Computers, Curtains, Deodorants, Detergents, Dice, Disposable Diapers, Dolls, Dyes, Eye Glasses, Electrical Wiring Insulation, Faucet Washers, Fishing Rods, Fishing Line, Fishing Lures, Food Preservatives, Food Packaging, Garden Hose, Glue, Hair Coloring, Hair Curlers, Hand Lotion, Hearing Aids, Heart Valves, Ink, Insect Repellant, Insecticides, Lap tops, Linoleum, Lip Stick, Milk Jugs, Nail Polish, Oil Filters, Panty Hose, Perfume, Petroleum Jelly, Rubber Cement, Rubbing Alcohol, Shampoo, Shaving Cream, Shoes, Sulpher pills, Televisions, Toothpaste, Trash Bags, Upholstery, Vitamin Capsules, Water Pipes, Yarn
    Take all these products away then what do you have that the consumer will buy – NOTHING.
    Activists should start taking a hard look at their behaviour and what they are doing. Greenpeace has ships that run on oil and gas, their boats were made in warehouses that needed heating, buildings, welding tanks, etc. They also have rubber boats that are made from the byproducts of the oil and gas industry. They also fly in airplanes and helicopters (I know a lot of pilots who have flown Greenpeace and the activists behaviour was disgusting), drive vehicles that are blowing black smoke out of their tail pipes (seen it). They purchase computers, laptops and use cell phones which the plastic in these products are all made from by products from the oil and gas industry. They purchase grains that are swathed by combines that run on oil and gas, and purchase many other products that are made from the oil and gas industry.
    If Greenpeace and other activists feel they are so right, then I suggest that they quit heating their homes, grow their own vegetables and grains, toss out your cell phones, all of your computers and everything that has been made using these byproducts.
    The oil and gas industry has created thousands of jobs, put food on the table, roof over their heads and clothes on their backs for not only for themselves but their families as well. These people pay taxes, leave their families in their communities while they commute back and forth from a different community. What do these activists have to give back into the community? Would they financially support these people should they lose their jobs? The oil and gas industry pays their taxes and then some and this money is then divided into different parts of the country.

  9. markbaland
    September 22, 2010, 1:27 am

    This problem will only be solved from the bottom up. The solution will not come from the powers that be. They are so greedy that they would rather continue to profit from oil’s stranglehold on power than to embrace renewable alternatives like solar, wind, hydrodynamic, biomass, and geothermal. Greed is short sighted. Just like a dog will eat until it vomits, so the power brokers will strangle the people for profit until the people die and there is nobody left to strangle…

  10. greenearthnazi2020
    September 23, 2010, 12:02 am

    Oil or no oil there is no energy crisis it is only manmade for greed. I can prove it. Contact me national geographic if you don’t believe it. I have several new inventions that will change the world. Also for houses and small gardens all the water we need. No city water, no well water, no spring water is needed. Cheaper source of water easy farming 80% less space. Houses built out of landfill material. 2 to 6 times stronger. At least two times and more energy efficient And looks same. It seemed like a dream but is not it is all true. They don’t tell you the real green ideals. Government and media.

  11. hollywoodnc1
    February 10, 2011, 2:11 am

    I think a lot of you missed the point (except Mr. Bill Simpson)…

    The issue isn’t if we hit a critical point AKA: "Peak Oil"…the issue is when will we actually run out AND what we do from that point forward?

    I agree with a lot that was said on this forum and yet I disagree with a few.

    I don’t believe that this is a "Scare Tactic" by the author as some have stated.
    I believe that each one of us should be very concerned at the outcome of this, because it will impact every one of us when it does occur and we didn’t even consider an alternative yet.

    I agree with those here who had mentioned that it’s to late.
    If you think that the economy is bad now, wait till the Saudis make that crucial announcement that they are in the process of running out of oil.
    Immediately after the market opens, you will see oil spike to a high never seen, while the rest of the market plunges from panicked investors.
    People will fill everything with gasoline, that they can possibly get their hands on. Stations will run dry in a day.
    Shipping will also skyrocket and as Mr. Simpson has stated in his comment, everything goes downhill from there.
    And that’s just the start…

    Keep in mind, that a majority of items in your home is plastic, which, as you know is oil based.

    Here’s where the ‘Chain Reaction’ takes effect…

    It was also mentioned that people will lose their jobs. I AGREE. There are those employers out there that will terminate you, so that they can make as much as they can before they have to close down.

    As millions are let go, so is revenue to the Gov’t.. Social Programs of ALL sorts will cease, effecting all who rely on them.

    Two reasons why people won’t be able to feed their family…#1)Social Programs ceased, #2)Skyrocketing food prices due to expensive shipping. That’s assuming that there’s anything on the shelves, after it’s cleaned out by a panic stricken public as they do before a storm.

    What occurs when people are backed into a corner and cannot feed their family?
    Higher crime via robbery and possibly murder if they’re provoked.

    So, when it’s all said and done, our planet is (for the sake of a better word), FUCKED.

    Don’t think for a moment that the Saudis will give us prior warning. All they’re concerned about is the bottom line…$$$.

    Instead of the US bickering like children about whos’ ass is sitting in the White House, these inept morons should have spent that energy to convert us into the new age.

    For the stupid conservatives that prevented society from moving forward, you dumbfucks are going to get your wish. We are about to go back to the stone age!

  12. CommonSense
    February 15, 2011, 3:15 am

    Shareholders are the problem also! Who invests in the oil companies? And we demand cheap goods. The other thing is the system as it is now practiced is creating a system of poverty– Read: Why Global Poverty? ISBN 978-0-911312-94-2