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Have We Reached Peak Oil?High oil prices have put everyone on alert for peak oil. The question that is on the tip of everyone’s tongue is have we reached peak oil? Let’s take a look. Rear View Mirror Peak oil is a simple concept, but one that is slippery when it comes to actual applications in time. By this, I simply mean that most people understand that peak oil means that production will increase to a certain point then plateauing before starting to decline. This creates an obvious concern given the fact that world wide demand is constantly rising with the evolution of China, India and other countries needing more and more energy.
While the concept of peak oil is simple to understand, figuring out when exactly it will occur is very difficult. The problem is the only way to really tell when it has happened is by looking back in time at it. When you are at the top of the bell shaped curve of production, you can’t see forward in time to determine if the road will continue up or start to decline. It is only a few years later when you realize things are heading down and you can say, “hey, we’re screwed!” Have We Reached Peak Oil? The obvious question now is have we reached peak oil in 2011? The answer is unclear, but it certainly appears so. The problem is most oil producing countries in OPEC don’t report real reserves or distribution numbers. Still, we are seeing other countries and independent agencies starting to admit there is a problem. The International Energy Association is one of my favorite groups, but also one of the most alarming. This group regularly attacked peak oil alarmists and noted that we wouldn’t see any production problems until at least 2030 at the earliest. As oil prices began rising, the IEA started to become a bit of a laughing stock. They soon started revising their numbers and, ta da, they now are announcing we actually peaked back in 2006. Perhaps. So, what are we to really believe? Have we reached peak oil or not? What most credible experts believe at the moment is we are somewhere along the top of the Hubert curve. Peak could have been achieved in 2006 or it might not happen until 2020 depending on economic growth. If there is a consensus finite range out there, most seem to feel that 2013 to 2015 will be the period we see it. Having said that, we will not be able to verify it until 2017 or so!
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