(greentechmedia.com) Peak oil is the point at which global oil production peaks and can only go down. M. King Hubbert developed the theory of peak oil after observing this pattern in individual oil fields and then extrapolating these trends to the U.S., accurately predicting a peak in U.S. production by 1970.
But in the last few years, as U.S. oil production has dramatically ramped up, many peak oil believers have been left looking a bit silly.
I’ve followed the peak oil debate for a decade and written numerous articles on this issue. There’s a good chance we will see peak oil demand arrive before a permanent peak in global peak oil production induced by physical limits.
If these events do indeed play out, we will see peak oil relatively soon. But it won’t be driven by geological or political limits on the supply side. Instead, it will be driven by an increasing array of options for reducing petroleum consumption — lead by an ever-increasing array of electric vehicles.
I became really worried in the 2007-2008 timeframe about possible major problems from the earlier-than-expected arrival of peak oil because of the massive run-up in oil prices at that time. It was only the economic crash that began in mid-2008, the largest since the Great Depression, that led to a decline in oil prices from their record peak of $147 a barrel in July of 2008. Oil prices plummeted at that time to $33 a barrel — more than a 75 percent reduction — in early 2009. They climbed steadily back to over $100 a barrel in 2011 and stayed around that level until late 2014, when they crashed again into the high $20s.
The high price plateau was the highest-priced five years for oil in U.S. history, and it seemed to indicate a long-term structural shift in oil supply and demand, and thus higher prices. If there was plenty of oil to meet demand, as the “cornucopians” argued, why were prices staying so high? As the global economy climbed out of the Great Recession, it faced the strong headwinds of high oil prices.