What Is "Hubbert's Peak"?
- In the 1950s a US Geologist, M. King Hubbert, observed that once you extract half the oil from
a given field, production begins to decline. This became known as 'Hubbert's Law.'
- Hubbert extrapolated this to the US as a whole, and estimated that oil production in
the US would peak in the early 1970s.
- The previous chart shows that Hubbert was correct in predicting the peak.
- This period also marked the first time the US became a net importer of oil.
|
|
Demand is Growing
// Sources: IMF World Economic Outlook, April 2005;
Energy Information Administration International Energy Outlook 2006;
International Energy Agency World Energy Outlook 2006. NB - IEA did not provide projections for 2020 & 2025.
- A global population boom, coupled with the increased industrialization of emerging regions going forward, herald an explosion in global oil demand.
- Taken in the context of reduced production and discovery, the only logical conclusion is higher oil prices in the future.
|
|
