Origin of the Peakoil Theory

The peak oil theory is the belief that at some point the production of oil will reach a peak and then start to decline. The result of this decline will be a significant increase in the cost of oil and that will have a serious impact on the economy. The peak oil theory has been around since the 1950's but it has really started to gain traction in the last couple of decades. This is because it is only possible to tell when oil has peaked after the fact. The successful prediction of when oil would peak in many countries has helped to lend credibility to the theory.

The peak oil theory was developed in the 1950's by geologist M. King Hubbert when he noticed that if you graphed the discovery of new oil deposits over time they made a bell curve. Hubbert reasoned that the production of oil should follow a similar pattern and the result was what became known as the Hubbert curve. If one accepts this curve as being an accurate representation of the rate at which oil is produced then it is obvious that production will continue to grow until it reaches a peak after which there will be a decline in production. The decline in production will come with rising prices since it will be necessary to have higher prices to make it worthwhile to continue to produce oil that is becoming more and more difficult to get.

During the fifties Hubbert estimated that the oil production in the United States would peak about 1970. This turned out to be a remarkably accurate prediction and has made Hubbert something of a legend. While no countries oil production will fit under the bell curve exactly it has proven to be a fairly accurate representation at least as far as goals for individual nations goes. Certain factors like economics and geology will affect oil production so the curve is only an estimate but it has proven to be a fairly accurate one.

Despite the current popularity of the peak oil theory there are people who believe that it is in fact not true. Most of these people argue that peak oil is a theory promoted by the oil companies to justify the high price of oil. Most of the people who support this idea are also believers in the abiotic theory of oil. This theory suggests that oil is not made as the result of the decay of ancient life forms but is created from hydrogen deep in the earth's core. The result of the abiotic theory is that there is far more oil than the oil companies suggest there is. If this is the case it would result in a collapse in the price of oil, something the oil companies are obviously keen to avoid. Whether the abiotic theory is true or the peak oil theory is true remains to be seen as there is currently a great deal of disagreement on the subject.