Twenty years ago this month, I interviewed Marion King Hubbert at his home in Chevy Chase, Maryland. Hubbert was a brilliant and opinionated man. If he were alive, he would no doubt be fascinated by the quadrupling in oil prices and the increasingly vigorous discussion of peak oil. In this column, I’ll take my best shot at summarizing what Hubbert might have to say today about recent developments in the oil industry. His remarks from that old interview are in italics.
1. Hold the USGS’ feet to the fire:
There is no doubt in my mind that the USGS’s optimistic world petroleum resources report of 2000 would top Hubbert’s agenda today. His frustration would be born from his experience during the 1960s and 1970s, when the USGS issued a number of over-optimistic forecasts. While Hubbert would need a crash course in the new computing tools and resource assessment terminology, once he were up to speed, I suspect he’d blister the USGS’ year 2000 report. Quotes from the 1988 interview:
The U.S. Geological Survey—Vincent McKelvey in particular—always came out with an ultimate of around 600 billion barrels for the Lower 48, for crude oil. Since the USGS is highly respected, these misguided figures were taken seriously in Congress. Industry wasn’t quite so taken in, but the government was.
In the early 1960s, I predicted that the US would peak shortly, within less than 10 years, and the Geological Survey was predicting that it would occur in closer to 40 years. So, okay, I said “well, let’s wait and see what happens.” As it turned out, the USGS misled the government for 15 years [through 1977].
2. Critiquing unreasonably optimistic forecasters:
How would Hubbert feel about the U.S. Energy Information Administration’s forecast of a global peak between 2036 to 2043? I suspect he would be railing at EIA in public.
In their forecast, after peak production, EIA projects a cliff-like decline rate (10%/yr). Based on his statement below, Hubbert would favor a more gentle decline, similar to that drawn by the EIA in 2000, showing a peak in 2016 with much slower net annual decline rate (about 2%/year). “After the hump, production can’t drop sharply; it’s got to go down gradually because that’s how you find oil. You don’t find it all at once and you don’t produce it all at once. It peters out gradually.” The key point here: since the decline rate wouldn’t fall that fast, Hubbert would insist that the peak would have to come decades sooner than currently forecast.
How about optimists, like Daniel Yergin and Cambridge Energy Research Associates? Consider Hubbert’s thought here: “After my study was published, there were two camps of thought. The first reaction was ‘that guy must be crazy.’ It violated their intuitive judgment. But when some of the skeptics went back and took a look at my ultimate, they found it fell within their range of their estimates, making the conclusion of a near peak in US production not just likely but inevitable. But others found my conclusion so abhorrent that they couldn’t accept it.” He would likely put CERA in the latter camp.
3. The Solar and Efficiency Pathway:
One of Hubbert’s famous presentations, delivered 52 years ago to an audience of his peers, was called “Nuclear Energy and the Fossil Fuels.” At the time, he anticipated that nuclear energy would step in to substitute for future declining petroleum production. Later, he saw too many problems with nuclear and started promoting solar energy instead.
‘Were we a rational society, a virtue of which we have rarely been accused, we would do so and so…’ Hubbert suggested. He believed we should husband our dwindling supplies of oil and gas—supplemented by imports as long as they are available—and institute a program comparable to that in the nuclear industry of the 1940s, 50s and 60s, for the conversion to solar energy. He understood that time was a precious and fleeting resource: We still have great flexibility but our maneuverability will diminish with time.”
The biggest source of energy on this earth, now or ever, is solar. I used to think it was so diffuse as to be impractical. But I’ve changed my mind. It’s not impractical…This technology exists right now. So if we just convert the technology and research and facilities of the oil and gas industries, the chemical industry and the electrical power industry—we could do it tomorrow. All we’ve got to do is throw our weight into it.
4. Challenge Shell to come clean:
Hubbert enjoyed speaking truth to power. Back before his famous 1956 presentation, Shell officials were twisting Hubbert’s arm to change his message right up to the last minute. Then afterwards, “This thing hit the New York Times and some officers at Shell nearly went through the roof. They just about had cat-fits. Things were pretty intense for a few weeks around Shell. But by the time they had time to study the paper, they found they couldn’t [refute it].”
Eventually Shell got over it. Hubbert continued to lecture at Shell’s month-long, executive training school at the Arden House for up-and-coming staffers. “I have a letter I received during the 1980s, written by a Shell vice president who wanted some information for a talk he had to give. He had been in one of these Arden House groups and he said he thought I was the most pessimistic geologist he ever heard….and now he commented about how right I was.”
Now comes 2008, and Royal/Dutch Shell’s CEO Jeroen van der Veer writes to his staff that the output of conventional oil is close to peaking, that world demand for oil and gas will outstrip supply within seven years. But in this country, Shell’s CEO John Hofmeister fired a salvo last week aimed at discrediting the concept of peak oil. Hubbert would favor the Euro-Shell’s view of our unfolding future and take Hofmeister to task.
5. No soft treatment of presidential candidates:
On the 1988 presidential candidates, he energetically opined: “They’re ignorant, they don’t know anything about [energy]. The entire crop, with the exception of [Governor Bruce] Babbitt, is a bunch of ignorant asses. They haven’t any idea of the state the country’s in, with respect to energy resources.” Just imagine what Hubbert would say about the recent pandering of presidential candidates to Iowa’s ethanol lobby; it wouldn’t be pretty.
6. Growth as a cultural problem:
“We’re dealing with a cultural problem. We’ve had nothing but exponential growth for 200 years. During that period we’ve had nothing but exponential growth, and so we’ve developed an exponential growth culture. Politicians are always trying to maintain our growth. If we could maintain it, it would destroy us.”
Steve Andrews is an energy analyst and co-founder of ASPO-USA.
