Peak oil is the point in time at which the maximum global petroleum productionrate is reached, after which the rate of production enters its terminal decline. If global consumption is not mitigated before the peak, the availability of conventional oil will drop and prices will rise, perhaps dramatically. M. King Hubbert first used the theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His model, now called Hubbert peak theory, has since been used to predict the peak petroleum production of many other countries, and has also proved useful in other limited-resource production-domains. In some cases, the model has been completely useless as a country or region peaks 2 or more times. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.
Some observers, such as retired professor Kenneth S. Deffeyes or investment banker Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for theglobal economy. Although predictions as to what exactly these negative effects will be vary greatly, “a growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day.”
If political and economic change only occur in reaction to high prices and shortages rather than in reaction to the threat of a peak, then the degree of economic damage to importing countries will largely depend on how rapidly oil imports decline post-peak. The Export Land Model shows that the amount of oil available internationally drops much more quickly than production in exporting countries because the exporting countries maintain an internal growth in demand. Shortfalls in production (and therefore supply) would cause extreme price inflation, unless demand is mitigated with planned conservation measures and use of alternatives, some of which were advocated and started during the Carter administration, and continue to this day.
Liberal estimations of peak production forecast a peak will happen in the 2020sor 2030s and assume major investments in alternatives will occur before a crisis. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used..
Conservative predictions of future oil production operate on the thesis that the peak has already occurred or will occur shortly and, as proactive mitigation may no longer be an option, predict a global depression, perhaps even initiating a chain reaction of the various feedback mechanisms in the globalmarket which would stimulate a collapse of global industrial civilization.
Don’t listen to politicians, news organizations or people in the business of maintaining the status quo. Matt Simmons was one of, if not the most educated man to ever walk the planet regarding the subject of world fossil fuel production, usage and the future of it. His understanding of it is based on facts, science and genuine concern for the planet. He lived inside the industry for decades!Who is Matt Simmons?
Matthew Roy Simmons (April 7, 1943 – August 8, 2010) was founder and chairman emeritus of Simmons & Company International, and was a prominent figure in the field of peak oil. Simmons was motivated by the 1973 energy crisis to create an investment banking firm catering to oil companies. In his previous capacity, he served as energy adviser to U.S. PresidentGeorge W. Bush. He was, up until his death, a member of the National Petroleum Council and the Council on Foreign Relations.
Simmons, who lived in Houston, Texas, died at his vacation home in North Haven, Maine, on August 8, 2010, at the age of 67. The cause of death was ruled “accidental drowning with heart disease a contributing factor”.
Simmons was the author of the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, published in 2005. His examination of oil reserve decline rates helped raise awareness of the unreliability of Middle East oil reserves. He gave numerous presentations onPeak Oil and water shortages.