On Monday after the WSJ ran Daniel Yergin’s essay, There Will Be Oil, I submitted this rebuttal. They ask to have the exclusive right to any submission for 10 days. At this point, they have neither printed it nor responded back, so it seems OK for me to post it here instead.
Saturday, September 17, the WSJ ran an essay by Daniel Yergin called, “There Will Be Oil.” In the essay, Yergin argues that the advocates of “peak oil” theory are wrong. He says, “Meeting future demand will require innovation, investment and the development of more challenging resources,” but he doesn’t make this sound like a huge problem. Most of the big challenges would be above ground issues, like politics, mismanagement of resources, and wars.
Should we believe this story? It sounds strangely dissonant, compared to what we have been hearing from other sources. In 2007, the National Petroleum Council (NPC) issued a report called, “Facing Hard Truths about Energy.” In fact, Daniel Yergin was one of the authors of the report. The cover letter to this report said,
“To meet the accumulating risks, all recommendations of the 2007 report require implementation with increased urgency and commitment. As stated in the 2007 report, there is no single, easy solution to the global challenges ahead. Given the massive scale of the global energy system and the long lead-times necessary to make material changes, all actions must be initiated now and sustained over the long term. We need all economic, environmentally-responsible energy sources to assure adequate, reliable supply.”
Daniel Yergin has recently been an author of another, recently released NPC report called, “Prudent Development—Realizing the Potential of North America’s Abundant Natural Gas and Oil Reserves.” As the title implies, this study relates only to North America. It in no way indicates a fix to world energy problems. In fact, even the North America part of the analysis is disputed, as indicated by articles such as “Behind Veneer, Doubt on Future of Natural Gas,” from the New York Times suggest.
Yergin points out that the world has produced about one trillion barrels of oil to date, and that there are at least five trillion barrels in the ground, of which 1.4 trillion are deemed technically and economically accessible enough to count as reserves. Of the 1.4 trillion counted as reserves, less than 0.1 trillion are from OECD countries. (The 1.4 trillion excludes Canada’s oil sands, which are very slow to extract.)
Nearly 1.1 trillion of the 1.4 trillion in reserves are from OPEC countries. These reserves have not been audited, and there is little reason to believe that they are set in the way OECD countries would set their reserves. Saudi Arabia reports the largest reserves, amounting to 265 billion barrels. Saudi Arabia also claims to have huge spare capacity. Yet, when Libya lost 1.4 million barrels a day of crude oil supply in February, Saudi Arabia and the other OPEC countries were not able to make up this relatively small shortfall. The International Energy Agency was forced to ask for a release of oil from OECD strategic petroleum reserves to meet the world’s oil needs.
The Wall Street Journal published an article on May 24, 2011, titled, “Facing Up to End of ‘Easy Oil’“. The article talks about the Saudis turning to tougher sources of oil, such as billions of barrels of heavy oil trapped beneath the desert that need to be steamed out. A current project is described as costing billions of dollars and taking decades to complete. If Saudi Arabia really has 265 billion barrels of reserves comparable to those of OECD countries, why would they feel a need to pay Chevron to help them with this project, which is described by the Journal as a “gamble”?
The big issues with world oil supply now are (1) it is not clear that it can rise fast enough to meet the world’s needs and (2) the price is already so high that it is causing economic distress to oil importers. With the ‘easy oil’ already being exploited and oil exporting nations needing high revenues fund government programs, the cost of oil can only rise higher.
What happens if oil is in such short supply that it needs to be rationed by high price? We know in agriculture what happens when a crop is short of a vital nutrient. Liebig’s Law of the Minimum says that crop output will be reduced, and in fact, will be proportional to the limiting nutrient. We know that a similar relationship holds with chemistry experiments. If a laboratory can afford only a small amount of a high-priced reagent, then the size of the “batch” that can be created will need to be scaled back by the limiting reagent.
Economists tell us that substitution can be expected if oil is in short supply. In the short term, though, how likely is this to actually happen? We have millions of cars and trucks in operation that use oil products and thousands of factories using oil products as inputs to manufacturing processes. Many years of research and huge investment will be required to create substitutes in adequate quantities. In the meantime, the expected reaction to limited oil supply (expressed as high-priced oil supply) would seem to be economic contraction. If the economy is thought of a system which depends on inputs of various types, this outcome would be analogous to what happens when crops have an inadequate amount of a particular type of nutrient.
Yergin tells us, “. . . the world has decades of further growth in production before flattening out into a plateau—perhaps sometime around midcentury—at which time a more gradual decline will begin. And that decline may well come not from a scarcity of resources but from greater efficiency, which will slacken global demand.”
Greater efficiency in the use of a resource has historically resulted in a lower price per unit (1,000 miles of auto travel, for example) for the purchaser. If the cost is lower, the product becomes more affordable to more purchasers, and use tends to increase, not decrease. This is why low-priced (and high gas mileage) automobiles by companies such as Tata motors of India and by various Chinese companies are so important in world oil demand.
An alternative view, held by an increasing number of “peak oilers” and economists, is that high price is what is likely to lead to reduced oil consumption. High oil prices ration demand, and in fact, is what is rationing it right now. These high oil prices can lead to economic contraction, and this economic contraction is what brings about lower demand and lower prices. Eventually, because of increasingly recessionary responses, an equilibrium price point will be reached which is too low to keep production at its current level, and oil supply will fall.
Yergin characterizes the nature of peak oil discussion today by a rather inadequate reading of the earliest writings for M. King Hubbert on the subject. For example, if Yergin had read Hubbert’s 1956 paper more closely, he would have discovered that Hubbert talked about the likelihood of reduced decline rates in later years because of improved recovery methods. Furthermore, Hubbert gave his forecast for world oil supply in the context of some other resource—nuclear energy in his 1956 paper—rising to fill with shortfall in energy production. The shape of the world oil extraction curve is likely to be quite different (much steeper after peak), in the absence of this assumption, as I have explained in a post on The Oil Drum (theoildrum.com).
Today’s peak oilers have a range of beliefs. This is to be expected, in any new field. Not all of them can be correct. But it seems to me that the field has a great deal to offer to expand the thinking of economists, whose models to date have assumed that economic growth can continue indefinitely and that technological advances and substitution can fix world oil supply problems. Perhaps the situation is more complex than current models assume. A more refined view of the world situation is possible if the understandings that come from geological knowledge can also be brought to bear on the subject.
Gail Tverberg is a researcher and speaker on issues related to oil supply. Her background is as a casualty actuary. She is an editor of The Oil Drum (theoildrum.com), a speaker at the upcoming annual meeting of the Association for the Study of Peak Oil in Washington DC, and has her own blog, Our Finite World (ourfiniteworld.com).
I’m wondering what is the limiting resource in scaling up the production of electric cars as gasoline becomes more and more expensive, and we are forced to go to them in order to get to and from work and perform other tasks necessary for survival in the USA? Is it nickel or lithium for manufacturing batteries? Building new factories during what will probably become a depression after the peak becomes obvious, and exporters start reducing their exports? Can the power grid handle the increase in demand, even if the vehicles can be built fast enough to keep the US economy from collapsing, which will surely happen if suburbia can’t get to work? Is it capital to build battery plants? is it skilled labor? Is it the high cost of the electric vehicles as producers bid up the cost of scarce elements needed for their construction? I wonder if any think tank or government research organization has modelled the problem? Hedge funds might be the first to do it.
At least batteries can be recycled. Of course, it takes energy.
Intellectual disagreements over the finer details of things have an amusement value but that’s about it for me. You know things like “x said this”. Not quite, I think the person said “this”. For me, Hubbert’s point has value whether it was 1.5 or 2.356. There is a profile for each field that, while having some variables, is one of increased production to a point and then an inevitable decline that may have some bumps in it but the over all decline will continue. Seems true to everything in my opinion. Simply put, in the overall picture we are chasing an ever decreasing resource of incredible value with ever increasing amounts of money, time and energy. I don’t need a discussion of the finer points. The big point makes it for me. We aren’t drilling to 30,000 feet for pleasure. And for god’s sake, we’re MINING oil in Canada. Pretty obvious to me something is going on. Was Hubbert accurate in every little detail? Who cares?
For the folks with very good incomes and large sums of money, it’s an intellectual discussion about who said or claimed what, at what time and how accurate were they. For hundreds of millions it’s a senseless discussion over which they have no interest as they are too damn busy working their butts off just to make a living and that’s getting harder on a consistent basis. That’s the real world. The folks at the bottom of the economic scale aren’t engaged in these academic discussions. And one day, that will be us folks reading these blogs. We’ll be way, way too interested in eating to be arguing academic minute topics to care. I don’t know about you but it’s already changing my lifestyle.
That’s where I’m at in life. Have already changed a lot, and trying to figure out what more I can do within consideration of the real energy situation. I live in Texas, I have to have air conditioning in the summer, or dig a deep hole in the ground to live in. Already have the land; how wisely can I spend what I have for the future. All I want is the truth!
Ikonoclast – This is an interesting list of logical fallacies. It should have wider distribution. The Yergin post at The Oil drum is still open.
“It should have wider distribution.”
It will be a waste of time.
Our modern society (Idiocracy) hears only 3 word slogans:
Drill Baby Drill
Jobs Jobs Jobs
We Shall Overcome
Hope Change & Audacity
There willBe Oil
p.s.:
Kurt Cobb may have said it better:
“No matter how well-reasoned one’s arguments are, as a tactical matter, … reason is not what moves crowds.”
source=
http://resourceinsights.blogspot.com/2011/09/ignoring-daniel-yergin.html
Yergin’s article is an exhibition of the complete array of cornucopian fallacies and specious arguments.
1. The argument that past premature predictions mean that a current prediction is premature too. This conclusion does not follow. Past premature predictions have no bearing on a current prediction. All that has a bearing on the likely correctness of a current prediction are the empirical facts of the present and our best data gathering and calculations of those objective facts.
2. Arguing by assertion rather than from empirical facts. Yergin asserts a “plateau” of production will occur (which is not necessarily wrong in itself) and then asserts without any empirical support that this plateau will occure “sometime mid-century”. This latter assertion is already contradicted by empirical facts which indicate a circa 2005 beginning of the oil plateau.
3. Arguing for specious, inflated and dubious reserve figures and increases. Considerable empirical research of reserve claims has already debunked many such claims.
4. Arguing about energy efficiency and forgetting Jevons paradox.
5. Misrepresenting earlier research and conclusions like the work of M. Hubbert King. King’s work was for the lower 48 states and his hypothesis of a peak and decline in lower 48 production has already been borne out by empirical reality.
6. Failure to understand that no market price compensates for the arrival of the nil return EROEI point. Failure to understand that the Laws of Thermodynamics are not repealed by market mechanisms.
7. Failure to understand that comparing 2008 oil prodcution to 2010 oil production in the US, neglects the slowdown caused the 2008 major recession (called by some the Global Financial Crisis or GFC). This is a form of cherry picking data points.
8. Failure to understand or even mention that burning all oil, gas and coal will in any case substantially damage our climate by increasing global mean temperatures by at least 6 degrees Celsius.
It is hard to write a reasonable length Opinion piece, and cover everything that is wrong. Every paper has word limits.
Re: Step Back
I don’t know – but I’m thinking about it – and I’m sure not the only one.
Here’s one on coal, though it isn’t specific…
**********************************************************
http://www.kentucky.com/2011/09/27/1899338/ap-enterprise-appalachia-faces.html
The thinner seams make it less cost-effective for a coal operator to send an army of miners underground, so surface mining with blasting and earth movers has often been the answer.
“I’ve heard of them getting little seams of coal as small as six inches,” Fleming said.
Coal company reports to investors are also candid about the region’s steadily declining supply of coal.
Arch Coal, the nation’s second-largest coal producer, told investors last year that the region’s coal “is in secular decline – faced with depleting reserves and significant regulatory hurdles.”
Central Appalachia saw a boom in surface mining over the last decade, helped by industry-friendly regulation under former President Bush. Hiring in eastern Kentucky and southern West Virginia doubled at surface mines over the last decade, yet overall production fell by 25 percent there in all mines under and above ground.
Read more: http://www.kentucky.com/2011/09/27/1899338/ap-enterprise-appalachia-faces.html#ixzz1ZMzP8wWp
This sounds like it’s not so much a problem of tougher regulations, but that the coal isn’t worth mining, if they have to worry about the damage they do in getting it.
It is my understanding that coal fired power plants are optimized for a particular kind of coal . It is possible to change this, but it takes a little doing. If Eastern coal is depleting, there are substitutes, but it may take modifications to the coal plants to properly use the substitutes. It will likely take more rail capacity, and more mining out West.
Weaseldog, I do not have the expertise you have in the industry. All I can do is share an opinion that many people outside the industry hold. Namely, our economy is dying. Why do we not use the resources we have to help to reverse that trend. I care about clean water, I care about our economy, I care about promoting a healthy, fair and responsible energy industry. Along the way, people get paid. The landowner, the mineral owner, the lessee, the producer and on through the chain of getting product to market. The problems with the relationship between government entities and the energy industry are many – fair treatment on both sides would be an improvement.
I wasn’t aware that Gail had restrictions on comments that demanded rehashing post references offered by anyone else. If that is the case, I’m sure she would not be shy to advise me.
TexasJune, Actually I hoped you did know something.
I hear similar things from many other people. It all seems to be Urban Legends that people want to believe in. Everyone hears the story from someone else. It’s part of our collective mythology.
I do understand how the legend of the capped super giant oil fields comes about. When an oil field operator wishes to use injection wells to build pressure in a field, they cap the wells between the injection point and the collection point. It’s easy to see how this practice can lead to the rumor that producing wells are being capped for no reason.
I think these Urban Legends could become the basis for new religious beliefs in coming generations.
“I do not have the expertise … promoting a healthy, fair and responsible energy industry. Along the way, people get paid.”
June,
Our biggest problem in communicating with each other is that a language does not exist (the words do not exist) for getting through with truths rather than with delusions.
Yes, people get “paid” with a thing called “money” and as that process unfolds we are led into the delusional belief that something “fair”, balanced and “responsible” has been going on.
But as Gail tried to point out above, a word like “demand” is a double edged knife. In one sense it makes us feel as if we, like spoiled children, can simply express a wish for toys and candy and by such verbal demand they will magically appear.
On the other hand, if we pretend to be adults and responsible about the enterprise, we must also assure everyone that our otherwise childish “demands” are backed up by an ability to pay for received value by us bringing to the table something of equal or greater value to match that which is to be received.
Oil and other energy forms have real world value. On the other hand, “money” is more in the realm of fantasy and fiction and comes with questionable, if not totally non-existent value.
So when we pacify our concerns about the whole system by saying that people are getting “paid” along the way, we are not really addressing the problem. And in fact we have a hard time expressing the problem in a non-delusional way because the words do not exist. A system cannot go on for very long (cannot be sustained) where a “supply” of real value (i.e., delivery of not so cheap oil) is matched up against a “demand” that is backed up merely by “made-out-of-thin-air” money stuff.
Am I wrong to assume that your value of oil/gas is so high, it should not be sold? In spite of all assessments of inventory, proven and forecast, oil/gas is a commodity in the so-called modern financial system. In a short time, it will drop to second place – behind clean water. Why? Potential for monitory profit.
The only thing that exceeds the value of profit – is the value of power. With power comes the critical responsibility to ensure there is a continuing market that feeds that power. This is not due to any compassion felt, but rather the understanding that targets must remain viable in order to wield that power. With most consumer markets subjected to the international financial circuit, each one has become less able to defend its own interest.
I had to think about that a bit TexasJune.
And on this note, “This is not due to any compassion felt, but rather the understanding that targets must remain viable in order to wield that power.”
I think a piece is missing, that’s assumed in your argument. Today, ‘Power’ appears to lack wisdom. It has no clue as to how to accomplish this goal, and further, doesn’t know it needs to. So it operates in only to serve it’s own interests at the cost everyone else’s.
And that is a valid concern – to be obliterated by a power that lacks the intelligence to play the game in which they are involved – especially when I can distinctly observe their condemning errors in poor judgment. As I inferred, a sustaining “self-interest” is not a one-way relationship between give and take.
“Am I wrong to assume that your value of oil/gas is so high, it should not be sold?”
@TJ
Thank you for replying.
I appreciate that I sound a bit off (a kook) because of my challenge to well established concepts (i.e. supply, demand, money, value, etc.). I’m sorry that happens. However, we have no words in our language to express some of the sentiments I wish to convey.
The “value” of oil/gas to “me” has nothing to do with what I was trying to get across.
Instead, it is the meaning of “money” and what gets transferred (and more importantly, not transferred) when someone is “paid” that lies at the root of many of our problems.
Yes, we can laugh it off by saying money is “evil” and by then casting our attention to other concerns.
The better way to say it might be that money is the root of many of our delusions and denials.
When someone in the oil patch gets “paid”, we; as responsible adults, wash our hands of all responsibility for what happens next as a result of the economic transaction. The fact that CO2 will soon be released into the atmosphere is somebody else’s problem. The fact that the end consumer (i.e. car owner) may soon be out of job and home is somebody else’s problem. We become guilt-free and responsibility-free adults as a result of the money-mediated transaction.
In other words, no one is responsible for anything. The system becomes a run away machine all on its own. Then we scratch our heads in bewilderment when “The Market” is not behaving as we demanded it should. The run-away Market is not “providing”. Instead it is gobbling up the Planet and leaving destruction and grief in its wake. Of course, such a tornado is merely another weather story that is someone else’s headache until the day it tears up our back yard.
Thank you for your time to explain that. It normally doesn’t take that many words for me to discern I’m on the same page with someone else. The ‘machine’ IS killing us – and we have no choice but to find a way to stop it. Money is nothing more than an efficient means of barter; accountability by and of all parties will determine the fate of our nation and the global economy. We’re mixing too many ingredients in one boiling pot, trying to cover the stench of the rotten. How will we fix that? Most likely, a redistribution of responsibility with accountability, because this issue extends way further than the energy industry..
“The ‘machine’ IS killing us – and we have no choice but to find a way to stop it.”
Agreed.
We are on the same page on that aspect.
The deeper question though is, what makes the machine the runaway process that it is?
If we don’t come to grips with that, we are unlikely to find a way to stop it or slow it down.
Thanks! Good explanation!
At the same time, we are putting heavy restrictions on oil and gas production in the lower 48, and environmentalists are fighting against the north-south pipeline that would take both Alaskan and Canadian products to the export markets in Houston. I totally understand the fear of contamination of the giant aquifer, but from the generalized maps, it appears to me it could be moved to the east without adding that many more miles of construction. This opinion is of course shared, in my highly precise and technological knowledge base!
What heavy restrictions are talking about?
It seems that the oil and gas industry do anything they want. They have thousands of rigs in the Gulf and thousands of leases that they don’t even drill on. They are very rarely denied a permit. They are even drilling in wealthy suburbs.
I know there’s an effort to better regulate them, but it’s going nowhere.
Please post references.
Thanks for trying to get the word out to a broader audience. It is frustrating. A couple days ago Onpoint from WBUR had a program discussing whether the US was facing its own “lost decade”. They got through the whole hour without even hinting at the role of high priced fossil fuels in our current predicament!
Hubbert prediction was for the lower 48. It did not include Alaska. See http://hubbert.mines.edu 97/1 for Ivanhoe on Hubbert
Some of these disproofs of Hubbert and other forecasters intentionally mix up oil types to make a false comparison.
I don’t know for certain that this is the case here, but I suspect that Yergin may be comparing ‘All Liquids’ to a Hubbert Forecast for Sweet Crude’. Or some similar comparison.
Even if that guess is right or wrong, I would like to point out that updated data, doesn’t change the methodology. Exponentially increasing consumption has outstripped supply and we are seeing no meaningful supply growth. Real demand, produced by a healthy growing economy increases at 2-3% / year. that is to say if supply grew at constant 2-3% / year, consumption would rise with it. Because supply can’t meet this, we’re still on the plateau and losing ground, regardless of what the current production figures are.
Keep in mind that economists measure demand by looking at how much is purchased. It doesn’t recognize supply as a limiting factor. If supply drops, they call it falling demand. After all if there’s less stuff to buy because of shortages, then people buy less, proving that demand is dropping. This is important to keep in mind when we hear about economists talking about demand on the news.
Demand comes from having salaries sufficient to pay for the oil that is available (at the price that it is sold at). It is a no-brainer that demand will drop when people are laid off from work or are forced to take salary cuts. If supply drops, price rises, and oil products become less affordable. I think we are saying the same thing.
Right, but you and I are talking about a form of demand that economists ignore.
I’ve encountered some confusion in the past when talking about demand in this way.
word up. putting supply side restrictions onto the demand side, when using an otherwise BAU model is a total lie. If you don’t understand what I just said don’t worry about it. Maybe you will someday.
And Gail, I know you do. And yes it is the same thing. But framing is o so important. U think the natural framing is coincidence? On the only site I’ve found that admits physical limits aka demand side problems as a central thesis, on the internet???
p.s. sorry for another quasi-incoherent post.
p.p.s. and it may be (a coincidence in framing). but it neeeds to be changed. In a world that extropolates BAU in all future projections, supply disruptions do not equal a lessening of demand.
the low hanging fruit is gone. I have educated hardly anyone, in RL (maybe seiously tried with 5 people), but rather used the metaphor with most that the low hanging fruit is gone, and then have gone on to quote some basic copper mining and/or petroleum pumping statistics and/or factoids. People have responded in kind, generally responding with the quasi-metaphor that we are in the end days. I respond with a quasi-cop-out that I would still like a “back up plan” “just in case we aren’t”. Demand wanes as it waxes, supply waxes as it wanes?.?. Kind of.? I could keep typing but I have time constraints.
sigh. way up in the first paragraph i meant supply side not demand side. wish this format had an edit button. wish i could write more clearly. take it in the spirit it was meant and ignore this amendment. thx.
the good thing is the truth is natural.
I’m pretty sure I understand how economists do it and why they are wrong.
You’re welcome to correct me, if you think that economists don’t measure demand from the supply side or you think this is the proper way to do it.
Nah, not at all.. I agree with you. 2nd para I used wrong word, switched intent, couldn’t edit.
Cool.
You can address all of these problems by delineating demand from consumption.
They aren’t the same thing.
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Gail, I would like your thought on something Yergin wrote about Hubble. Is Yergin right?
Quote: “Hubbert got the date exactly right, but his projection on supply was far off. He greatly underestimated the amount of oil that would be found—and produced— in the U.S.
By 2010, U.S. oil production was 3½ times higher than Hubbert had estimated: 5.5 million barrels per day versus Hubbert’s 1971 estimate of no more than 1.5 million barrels per day. ”
Another stray thought on my part. Does the high price of oil promote (guarantee?) a higher home consumption of oil in the exporting countries? Could this be positive feed back?
best
phil
I think part of the issue is what Hubbert was forecasting. If the estimate excluded Alaska and deepwater production, then his estimate was probably not too bad. If it was somehow supposed to match of with those areas which hadn’t been considered at that time, then it wasn’t as good. (Alaska became a state in 1959, so was not even part of the US when the forecast was made).
Regarding your second question, I am not sure. Norway has tried to keep consumption down, but its consumption is still a lot higher per capita than some other EU countries. A high price of oil guarantees a high price of imported food, so a food-importing country (like those in the Middle East) will have to spend more on food subsidies to keep citizens happy. They may also want to continue to subsidize oil prices, to prevent rioting. When oil prices are subsidized, consumption will grow.
Gail
Thanks for the reply.
I take your point that Alaskan and deepwater oil allowed Yergin to make a rhetorical claim about US 2010 oil production. However, US production, minus those contributions in 2010 still looks like 2.2mbpd compared with Hubbert’s projection, at least that quoted by Yergin, of 1.5mbpd, See here http://www.oilempire.us/alaska.html
Yergin is attacking Hubbert methodology, and Hubbert does not seem to provide a
credible methodology for handling the probability of future discoveries, some large. (OK, those future discoveries did not alter the longterm trend for the USA as a whole, nor for the North Sea; the trend of declining production continues.)
Just a note: IMHO I do not think that Alaska not gaining Statehood until 58/59 is particurly relevant; Alaska was part of USA and being intensively prospected in the 1950s.
Regarding my 2nd question, again thanks. I should have checked out for myself http://mazamascience.com/OilExport/
I was thinking though of the important exporters who illustrate Jeffrey Brown’s case for the ‘Export Land Model’; poster-boy Saudi Arabia. In the relevant cases, a growing population is subsidised in all respects by oil revenues, and the rate of domestic consumption increases significantly sufficient to very rapidly decrease net-exports. Mexico is another quoted example quoted by Jeff & Sam. (Even Russia with a static (falling?) population, and who has managed to increase exports of oil very significantly, we are told now needs high price oil receipts just to keep up the rest of GDP.)
Methodology doesn’t include data. It’s a process. If you want to include discoveries outside the scope of his projection, then you can do so, using his methodology.
There are many things he didn’t account for. He didn’t account for the US annexing Mexico in 1968. It didn’t happen, but it’s still true he didn’t account for it.
Your point about how Hubbert should’ve included the “Not a State of Alaska” in his analysis of oil projections in the United States of America is an interesting one. I have some points I’d like to make on that.
1. Complete data on Alaskan reserves was not available.
2. Statehood wasn’t a done deal. Russia and Canada were both interested in the property.
3. It’s important to set boundaries in making projections. It’s important to define the limits of your projections and document them. For instance in a report on Texas, you don’t include Brazil as a part of the State.
4. You’re assuming that at the time he published the study he was worried about what Daniel Yergin had to say, instead of satisfying the needs of his employers and colleagues.
On your second paragraph, you make some good points. Swelling populations increase local consumption, making less oil available for export. Coupled with multiple nations peaking in 1998-2001, it’s easy to see how this contributed to the crash of May 2001.
If you look at Hubbert’s 1956 paper, you will see that in the paragraph about future US oil production (on page 24) he says,
Clearly, steaming oil out, as is done at Kern River, is a newer technique. All of the fracking of shale oil using horizontal drilling is also a new technique. The recovery in the Bakken would have been very low, without new techniques. I don’t thing 2.2 mbpd vs 1.5 mbpd is material, given that Hubbert already explained that this kind of thing would happen, but post peak.
I think this might help answer your question about how accurate Hubbert was.
http://failinggracefully.com/?p=2788