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The oil 'spike': even worse than we thought

.........And the geology and physics are not reassuring. It's all very well talking about increasing production, but in order to produce something, it must first be there.

Geophysicist M King Hubbert predicted in 1956 that American crude-oil production in the 48 continental states would rise for 13 more years and peak in 1969, give or take a year
Unrestrained extraction of a finite resource in any large region rises along a bell-shaped curve
. He was ridiculed.

But in 1972, on cue, US oil production began to fall. Hubbert had been proved right.

Hubbert's forecast was based not on ESP but on mathematics.

In the mid-1930s he realised that unrestrained extraction of a finite resource in any large region rises along a bell-shaped curve that peaks when about half of the resource is gone.

Production lags behind discovery by about 40 years, the length of time it takes to bring a new oilfield into full production; the US oil-discovery curve peaked in the early 1930s. Hence Dr Hubbert's forecast.

Discoveries are still being made. But they are not the size they once were. In the words of oil-industry veteran Colin Campbell, "We now find one barrel for every four we consume."

The sums are simple. If you transpose the discovery graph forward 40 years (allowing for a small lag during the 1970s, when the oil price suddenly tripled and demand fell off), you arrive at just about where we are now.

Big rollover

In other words, what Hubbert called "the big rollover" is upon us: the moment when oil production actually begins to decrease.

Given that this coincides with the great Asian takeoff in demand, it is hard to see why we should expect the oil price to come down, however fervently we might wish that it would.

Of course, the kind of oil that gushes out of wells is not the only sort. There are other oil deposits in shales and tar sands.

These have been too expensive to be worth exploiting until now, but as the price of oil rises, so they will come into play.

However, they can never replace liquid oil as an abundant source of cheap energy, because the physics is against it. Comparatively little energy is needed to extract and refine liquid oil: in energy terms, it's almost pure profit.

But enormous amounts of energy are required to extract oil from shales and sands. The question must always be - are we putting in more energy than we are getting out? And the answer is seldom clear.

All this information is both starkly simple and widely available. Its implications are as unmissable as they are unpalatable.

Why, then, do those who ought to know - many of whom almost certainly do know - persist in pretending that everything will turn out all right in the end?

Unthinkable implications

Part of the answer is probably that they are in denial - the implications, given the way our lives work, are simply unthinkable. And part of it may be to do with self-interest - there can be no doubt that huge fortunes are being made by betting on future oil price rises.

However, the real problem seems to be the short-term nature of politics. The really big changes - the new infrastructures, the huge necessary investments in alternatives and in conservation, and the introduction of transparency into oil companies' records, so that we know where we stand and can begin to forward plan - all take time. And the worst will not happen until the people in power are dead.

Until those that are in power are prepared to admit the dire reality of the global oil situation, all that we can expect is yet more complacent editorialising and speculating about oil price spikes and market solutions......

Cheveron's new Gulf of Mexico oil find is a drop in the world oil bucket, and won't change the above coming reality. Bush knows this, but being part of, and in bed with Big Oil, greed and power is what drives him. The citizens of this land will suffer greatly because of the repercussions of his policies, and Bush will not lose sleep over it, since he will be leaving office in two short years, and will be living large off the hard earned money of the American Public, who he has screwed consistently with a smirk, and then a wink, to his oil pals. We absolutely have to kick bums like him and his kind out of our government. Public office should be about honest leaders with vision serving for the benifit of the citizens. Government for the Bushes has just been a tool they use, to gain more money and power, for themselves. We have a chance in changing things, and one good way is to vote, and get involved with demanding more from our countries government leaders. A sleepy, dis-connected, and un-aware citizenry is a sure path to national ruin.