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Sunday, May 29, 2005

Our Petroleum Predicament

This post includes a long "Peak Oil" editorial published in a popular fishing magazine from the 1970's called Fishing Facts. I think it took a lot of guts for the publisher, George Pazik, to write something with an edge to it that ostensibly catered to a rather conservative audience. This first grabbed my eye as a teenager and because of my tunnel-vision for outdoors activities at the time, I can't say whether other popular magazines featured such pessimistic outlooks. Pazik had written and continued to write strong editorials on conservation and environmental pollution after this editorial. However, this was a kind of crowning achievement, and authorities such as Al Bartlett from U. of Colorado reference this piece. Compared to what he did almost 30 years ago, today's current publishers and media midgets do absolutely shameful work.

Our Petroleum Predicament

A Special Editorial Feature by GEORGE PAZIK Editor & Publisher, Fishing Facts, November 1976

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FORWARD

If you and I could get away on a fishing trip for a few days, we would probably talk about many things. Our talk would not just be confined to fishing; we would probably discuss many other things which concern us. Since there is no way I could go fishing with 200,000 people, I use these editorials each month as an opportunity to visit with you. I don't confine my editorials to fishing, either, but have always covered a number of subjects which concern us as fishermen and as fellow human beings.

This editorial is written in early September. It should reach you at just about the time of the third anniversary of the Arab Oil Embargo and, perhaps, just before the American presidential election. Although a recent poll shows that 55% of us don't believe there ever was an "Energy Crisis", all of us will have to admit that the Arab embargo changed the world.

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No wonder we're confused. We have been confronted with an almost daily barrage of stories about the so-called "Energy Crisis". One day we're going to burn garbage for fuel, another day some "expert" proposes a space station to gather the sun's energy. Each day seems to bring yet another proposal, but one certain proposal never stops coming through: LET THE PRICE GO UP AND WE'LL GET ALL THE OIL AND NATURAL GAS WE NEED. That one must be on a broken record because we hear it over and over again. It lends credence to a popular belief that the Energy Crisis was artificially created to line the pockets of the petroleum industry and the oil-producing nations. I sense that all of us, Canadians and Americans alike, share an uneasy feeling that all is not well. We suspect that we are not being told the truth, the whole truth and nothing but the truth.

I have learned some startling facts about the so called "Energy Crisis" which will shock and dismay most people. I believe it is my obligation to pass these facts on to you for your own careful consideration. I have been as careful as I know how to be in assembling the facts, figures, judgements and opinions contained in the Special Editorial Feature that follows. It has been particularly difficult to get statistics which are all for the same time periods. In some cases they don't exist, therefore I've tried to be conservative in the way I use these statistics.

I am not a reporter. I do not claim to be impartial. I have no obligation to give equal space to all sides of every issue and to be "fair" to all sides. My only obligation is to be fair to you. I carefully identify my sources of information, I quote others accurately, and I clearly state which are my opinions. However, just by sifting through the millions of words which have been written about the "Energy Crisis" and choosing which I will use, I have already expressed my opinions by making those choices. If there are mistakes, they are unintentional but they are my responsibility.

Three years ago when the Arab Oil Embargo hit us, I knew I would want to write an editorial on it. I started to save hundreds of clippings from newspapers and magazines. I began attending lectures, seminars and meetings; some private, some public. I read numerous books and scientific papers and made voluminous notes. Always I felt that I needed a little more solid information before I could write the kind of editorial the subject deserved. Two and a half years went by and I still felt that I didn't have the whole story. Suddenly things began to fall into place and I realized I was ready at last.

You know, over thirty years ago I graduated from the University of Wisconsin with a degree in Metallurgical Engineering as my major course of study and with Mining Engineering as my minor study. I never entered the field of engineering because the Army wanted me to be a gunslinger in World War II and I never went back to it. Little did I dream thirty years ago that my studies in physics, chemistry, mathematics, excavating, are processing, metal extraction, etc., would be so useful to me in a study of Energy for an editorial I would write for a magazine I headed up as Publisher and Editor. I would never attempt to work as an engineer today, but those courses of thirty years ago sure helped me understand the many complexities of our energy-producing systems.

You will note that I chose the title, "Our Petroleum Predicament" rather than the term "Energy Crisis" we have all heard until we're sick of it. I don't think "Energy Crisis" is correct. I chose the word Petroleum because it includes both oil and natural gas, which supply 75% of our energy, and these are the substances with which we have aproblem. Our coal is not threatened, neither is water power. The word "Crisis" implies an immediate situation whose outcome will determine whether good or bad consequences will follow. "Crisis" is also used to describe the turning point of a disease when it becomes apparent whether the patient will live or die. Using the word "Crisis" implies that something came up suddenly which can and must be cured with a quick-fix remedy or all is lost. You can see why the term "Energy Crisis" does not correctly describe our present problems.

"Our Petroleum Predicament", however, does exist, as I will prove to you in this Special Editorial Feature. The Arabs didn't invent it or cause it. It's been coming on us ever since World War II. Nobody did it to us, we did it to ourselves. There is no quick fix, no one answer, just many possible answers, none of them quick, cheap or easy.

As fishermen we have to be concerned. Plentiful supplies of petroleum are essential to our sport as we now know it. As human beings we must also be concerned. Finally, as citizens of the United States and Canada, we have to know what is happening to us.

This is not a message of impending doom but a promise of the great opportunity that awaits us if we start acting wisely, NOW. It is a promise of a golden age; a future that is ours for only the effort to bring it about. To get there, however, will require us to change the way we feel about a great many things in our lives. If we fail to make these changes, a cataclysm awaits us.

Let me try to tell you about it.

FIRST, THE CONCLUSIONS

There are many people who are too busy to read lengthy articles. They'll glance at the first few paragraphs and then flip through to the end in order to read the conclusions.. To make it easy for such readers, and maybe add an extra touch of interest for the rest, I've listed immediately below some of the-most important facts and conclusions presented in this Special Editorial Feature.

  • In the early stages of the 1973-74 Arab Oil Embargo, President Richard M. Nixon went on national television to tell the country about Project Independence, which was his answer to "the energy crisis":
    "Let us set as our national goal, in the spirit of Apollo, with the determination of the Manhattan Project, that by the end of this decade we will have developed the potential to meet our energy needs without depending on any foreign energy sources. Let us pledge that by 1980, under Project Independence, we shall be able to meet America's energy needs from America's own energy resources."
    Project Independence was a politically-inspired slogan at best, a dangerously misleading doctrine at worst. There is no way that this nation can develop the energy to meet our needs without depending on
    any foreign energy sources by 1980, by 1985, and probably not even within this century.
  •  Project Independence was based on four basic premises: (1) Major expansions in nuclear energy. (2) The development of oil from oil shales. (3) Vastly increased production of coal. (4) Large, new oil and natural gas discoveries as a result of intensive exploratory drilling. None of these are happening now or are likely to happen by 1980, 1985, or by any other date in the near future.
  • We are now using about 6 billion barrels of oil per year, yet at its peak in 1970, U.S. production of oil was only 3.245 billion barrels, it slipped to 3.210 billion in 1971 and to 3.108 billion in 1972. 2 It's continuing to go down every year. What makes us think we could DOUBLE our production of this diminishing resource so as to achieve 6 billion barrels a year and thus be "Independent"?
  • Our frantic efforts to dig up all our oil and natural gas can best be described as a policy to "deplete America first".' How this adds to our national security escapes people of only average intelligence. Perhaps it involves some secret principle known only to a privileged few but which cannot be shared with the masses.
  • The present U.S. national energy policy can best be described by the title of that pleasant old song: "Drifting and Dreaming".
  • U.S. production of petroleum reached a peak in 1970 and has gone down every year since.2 It is not likely to ever rise again to its former heights unless Alaskan oil can be brought in soon enough, in large enough amounts, in which case it could peak slightly again and then go down again to ultimate depletion. 8
  • By the most optimistic predictions, Alaska's Prudhoe Bay oil field will produce about 10 billion barrels of oil, but it will take a half century or more to get it all out.2 That's not quite enough oil, totally, to fill U.S. present needs for two years.
  • There have been no major new discoveries of oil in Alaska since the discovery of the Prudhoe Bay oil field in 1968, 8 a matter of great disappointment to many in the industry.
  • Since Alaskan oil has been planned for shipment to the west coast, (where it isn't needed), half of it or more may go instead to Japan,3 which is exactly what some observers have been predicting for at least five years. 8
  • It is estimated that drilling for oil off the Atlantic Coast may produce 2 to 4 billion barrels; the Pacific Coast may produce 2 to 5 billion barrels.4 Just as with all oil fields, it will take about a half century to get it all. (We are using about 6 billion barrels of oil per year at present.)
  • In 1945, it required 51 new-field wildcat wells to make 1 profitable discovery of oil. By 1965, despite the use of the latest improved technology, it had dropped to 137 to 1.2 If we believe that this ratio will greatly improve in the future, we must assume that the oil companies drilled their worst prospects first.
  • About 80% of the oil that will ever be produced from the lower 48 states was already discovered by 1971.2
  • The United States is now importing a little over 40% of its oil. Another Arab Oil Embargo would make a shambles of our economy.
  • North America never had more than 15% of the world's total petroleum (includes oil and natural gas). The Canadian share is not yet half gone, but the American share is more than half gone. 2
  • The United States now probably has less than 5% of the world's crude oil reserves.2
  • America is using oil faster than any nation on earth. Guess who's going to run out first?
  • Those who think the Arabs and the Russians don't know all this are the same people who believe in Santa Claus and the Easter Bunny.
  • We can buy all the oil we want to buy from "our friends". All we have to do is to pay their price and meet their terms. You guess if the terms will get easier and the price will get lower as our own supplies get closer to running out?
  • Petroleum has so many wonderful and varied uses in the petrochemical industry: rubber, plastics, synthetic fibers, pharmaceuticals, fertilizer, etc., that simply burning it up for its heat alone can be described as an atrocity, a chemical crime.5
  • U.S. production of natural gas peaked in 1973 and has gone down every year since. Proved reserves have declined for the past 5 years. 2
  • About 75% of all the natural gas that will ever be produced in the lower 48 states was already discovered by 1975. 2
  • Natural gas is already in such short supply that it is not longer a question if some users will be cut off but only who will be first and second.
  • By 1974 estimates, each 20c per 1,000 cubic feet raise in price of natural gas would give the industry approximately an additional 56 billion dollars on estimated proved reserves; plus an approximate additional 70 billion on the gas still likely to be discovered in the future. That's a total of 126 billion dollars.2
  • By 1974 estimates, each $1 price raise on a barrel of petroleum liquids produced in the United States would give the industry approximately an additional 45 billion dollars for their estimated proved reserves; plus an additional sum of approximately 62 billion dollars on the recoverable petroleum liquids likely to be discovered in the future. That comes to an additional 107 billion dollars.2 (126 for natural gas plus 107 for petroleum liquids equals 233 billion dollars for the simple little price raises used in this example.)
  • Perhaps the petroleum industry is entitled to more money because of inflation. However, as to the claim that they will then "find all the new gas and oil we need," let's slow up and think. In this poker game they will be getting hundreds of billions of dollars more whether they find additional oil and gas or not. How about some hard evidence to show that all that "new" gas and oil really exists?8
  • Japan is one of the world's most heavily industrialized nations. Why is it that 210 million Americans squander as much energy each year as 107 million Japanese consume totally?6
  • From 1940 thru 1974, the gas mileage delivered by American automobiles has gone in only one direction: DOWN. When Detroit blames government-mandated emission controls and safety features (which only started in earnest in 1971) for the bad mileage of their gas-guzzling monsters, they are neglecting their sorry record of the preceding 31 years. We've had 35 years of waste, in all, because Detroit sold and we bought: "longer", "lower", "wider", "heavier", "faster" and "more powerful" .
  • Until May 1975, the highest and most erroneous estimates of our reserves of oil and natural gas for the preceding 14 years came from the official governmental agency entrusted with that job: The U.S. Geological Survey, of the Department of the Interior. By all their estimates during that period we had ample oil and natural gas reserves to last us thru the end of this century and beyond. Why was this sorry situation allowed to continue for 14 years? Who was responsible? Are they still giving us their "expert" advice?
  • Former Secretary of the Interior for eight years, Stewart Udall has written: "Having helped lull the American people into a dangerous overconfidence, I felt a moral duty to admit my own errors and to expose the wildly optimistic assumptions that had misled the country. It was clear to me that an enormous energy balloon of inflated promises and boundless optimism had long since lost touch with any mainland reality".7
  • For the past 20 years a world-renowned geologist has been trying to tell us about our declining petroleum reserves. In 1956 he predicted that domestic crude oil production would peak between 1965-70. It happened in 1970. In 1961, he warned that domestic natural gas production would peak in about 1977. It happened in 1973. He worked for the U.S. Geological Survey from 1963 thru August 1976. Why was he ignored?
  • Petroleum is a unique resource without equal. It is found in huge natural fields, not narrow seams covered by tons of earth. It is pumped not mined. It is concentrated chemical ~energy and a basis for a myriad products. There are no meaningful substitutes for petroleum in sight on this planet for the rest of this century. 7
  • Those who believe that some miracle of technology is going to magically produce a cheap, simple substitute for petroleum are probably the same people who still believe that storks bring babies.
  • The only SURE way to avoid a catastrophic disruption of our lives is to change from the most wasteful users of energy on earth to one of the stingiest. We need to get off the exponential growth for growth's sake joyride we've been on since World War II. That joyride was based on cheap oil, something we'll never see again. This means changing our way of life, our national outlook as a people. Some people may do this voluntarily but the bulk of us want to make sure that everyone is making the same sacrifices. That means that energy conservation will have to be mandated by law. We could do it now, cheerfully, or do it later when there is no longer a choice because disaster is upon us. Either way we'll do it.
  • We must go to the sun for our future energy. The sun's energy is virtually unlimited and good for at least a billion years. It is environmentally ideal and free for the taking. The technology exists today to harness the sun to produce electricity, either from heat or directly from sunlight by photo voltaic cells. The electricity can then be converted to chemical energy in the form of hydrogen from the hydrolysis of water and shipped by pipeline to wherever it is needed. Upon burning, hydrogen produces water. When we combine limitless clean energy from the sun with a new lifestyle which no longer insists that "more is better" and that "there is never enough", we will be in on the dawning of a new age upon the earth. 8
  • If any politician had guts enough to tell you all these things, would you vote for him?

ASIDE FROM THAT

There's a very, very sick joke that goes:

"Aside from 'that', Mrs. Lincoln, how did you enjoy the play at Ford's Theatre?"

A woman's husband, President of the United States, has just been shot by an assassin. The whole course of history has been altered. Yet someone is asking the lady how she enjoyed the play they were watching when her husband was shot! There is no "aside" from THAT! No one could brush aside an event of such tragic significance, or could they?

We do. We do it all the time. It's part of human nature. We try to shove aside unpleasant things or unpleasant facts with which we do not want to agree,

You know, in ancient times it was the custom to kill a messenger who brought bad news. Today we are not quite that barbaric.

We refuse to discuss the bad news and just ignore the messenger and everything he said. That's the "aside from" technique.

The other technique we use is to attack the messenger personally, try to destroy his character, question his sanity, or seek to find something in his personal life which will allow us to discredit him.

In no case do we deal with the bad news he brought. We prefer not to deal with bad news until il comes knocking at the door to deal with us. Will we ever change?

Well, aside from that. . . .

THE LONELY PROPHET

 The crowd gathered slowly in the convention hall for the first morning of the convention, as it does for nearly all conventions. It was a time for greeting old friends, backslapping and handshaking, and for some a time to clear heads still buzzing from partying the night before. San Antonio, Texas was playing host to about five hundred petroleum engineers in town to attend a three day meeting of the Production Division, Southern District of the American Petroleum Institute. Petroleum engineers are men who spend a lot of time in the field; hardy, rugged men in a he-man's industry.

There was nothing of special significance expected to come from this three day meeting which began on Wednesday, March 7, 1956. The first speaker of the morning was expected to give a broad-brush review of world energy resources. For many of those in attendance it was expected to be a re-hash of things they already knew. The United States was the world's greatest oil producer, the world's greatest oil consumer, and the U.S. petroleum industry was one that didn't even know the word "Can't". It was the greatest can-do industry of the world's greatest can-do country. If America was a world superpower, the American petroleum industry was its superindustry. Every new discovery was described as "vast", our petroleum reserves were always described as "boundless", and the outlook was never anything less than "fabulous". And so forth.

Petroleum geologists, engineers, and corporate officials all shared an intuitive judgement that went something like this: "We've been in the oil business in this country now for almost a hundred years. We've made a lot of money, had a lot of fun, and the future looks just great. It's taken us almost a hundred years (97) to produce about 53 billion barrels of oil and we know that we have two or three times that much still to go. We won't run out of oil during our lifetime or even during the lifetime of our children. Our grandchildren might have a problem, but with the new "Atoms For Peace" program announced by President Eisenhower last year, even our grandchildren should have no great problems with energy. Besides, we have at least a five hundred year supply of coal in this country."

The meeting got underway quite close to schedule and the first speaker was introduced. His name was M. King Hubbert, a native of Texas who had taught at a number of universities and for the last thirteen years had worked as a geologist with Shell Oil of Houston. Hubbert was fifty-two at the time; not a big, imposing man in size or appearance and not the kind of forceful speaker that brings an audience to a fever pitch. He was always addressed as "Dr. Hubbert", because he was the holder of several degrees and a true man of science. He was no armchair scientist, however, he had also won his spurs in the field. He began to speak in an evenly modulated voice that soon won his audience's attention with the force of his words and logic rather than with the force of his lungs.

He was committing heresy, right up there on the platform in front of their eyes. Contrary to the unwritten but well-established rules of conduct for petroleum industry figures, he started to point out to his audience that American petroleum reserves were not as vast as they had always assumed them to be and that American oil production (for the lower 48 states and continental shelves) could be expected to reach its peak in another ten to fifteen years and then drop down each year on its way to depletion. He committed yet another unpardonable sin by reminding his audience that we were already importing oil equal to about 20% of our production. . . dirty words in the petroleum industry. Some members of the audience were visibly upset, but they listened in silence, unable to combat the irrefutable logic of the man on the platform, but distrubed with him for saying it. It was truth that no one wanted to hear, but truth they could not deny. He just wasn't supposed to be saying such things!

His words also had serious financial implications for the industry. The date at which production peaks or culminates is the dread date at which an industry which has always had production increases of 5% or 10% a year will now begin to have production decreases of about the same amounts each year. It is the date at which creditors, suppliers, stockholders, etc. start to get wary. There is a big difference in running an industry whose production can be counted on to steadily increase or one which will steadily decrease. This is a date to be avoided at all costs and to be shoved as far into the future as possible.

The pre-printed version of Hubbert's paper distributed at the meeting made the following statements:

"According to the best currently available information, the production of petroleum and natural gas on a world scale will probably pass its climax within the order of a half a century, while for both the United States and for Texas, the peaks of production may be expected to occur within the next 10 or 15 years.

"Assuming this prognosis is not seriously in error, it raises grave policy questions with regard to the future of the petroleum industry. It need not be emphasized that there is a vast difference between the running of an industry whose annual production can be counted on to increase on the average 5 to 10 percent per year and one whose output can be depended upon to decline at that rate. Yet, in terms of the production of natural gas and crude oil, this appears to be what the petroleum industry in the United States is facing."


(When the paper was published, after Shell Oil Company censors had finished with it, the statement above was deleted and replaced with the following: "the culmination for petroleum and natural gas in both the United States and Texas should occur within the next few decades.")

At the finish of his talk, Hubbert was applauded politely and the conference went on to the next speaker, but the industry had been stung. Hubbert was soon to learn how upset Shell officials were with his talk and how they wished it had never happened. They knew they could do little to suppress a talk given before 500 petroleum engineers so they had to content themselves with the minor censoring job shown above. His mathematics and his eye-opening production curve had to stand as they were. Hubbert was not fired by Shell, incidentally, he continued to work for them until the end of 1963 when he retired at the mandatory retirement age of sixty.

The industry never forgot what he had done to them and got very busy over the next 5 or 6 years discovering tremendous quantities of oil, (on paper), in order to shove that dreaded day of culmination as far into the future as possible. After all, the industry position had always been contained in the following public relations statement:

"The United States has all the oil it will need for the foreseeable future."

Hubbert was considered an outcast, an incurable pessimist, an oddball. No other industry figure supported him. They did their best to ignore him and forget him, even though they were busy "discovering" oil on paper for the next 18 years. In fact, it can be truthfully said that his harmless little drawing of 1956 did more to increase (on paper at least) the petroleum resources of the United States within the next five years than the combined exploratory and productive efforts of the petroleum industry had been able to accomplish during the preceding century!

Aside from that. . . .

King Hubbert M. King Hubbert

M. KING HUBBERT, research geophysicist, U.S. Geological Survey, was born in central Texas. After two years at a junior college in his native state, he received his scientific education during the 1920's from the University of Chicago, obtaining B.S., M.S. and Ph.D. degrees in geology, physics and mathematics.

During and immediately following this period, he also: worked in Texas, New Mexico and Oklahoma as an oil geologist for Amerada Petroleum Corporation; taught geology and geophysics for a decade at Columbia University; spent summers in geophysical exploration for minerals with the Illinois State and U.S. Geological Surveys; and spent a year and a half in Washington during World War II on mineral-resource studies with the Board of Economic Warfare.

The following 20 years (1943-1963) were with Shell Oil and Shell Development Companies in Houston as research geophysicist, associate director of exploration and production research, and chief consultant (general geology). During his last two years with Shell, Dr. Hubbert was on loan for one quarter of each year as Visiting Professor of Geology and Geophysics at Stanford University. Upon retirement from Shell at the end of 1963, he assumed dual positions as research geophysicist with the U.S. Geological Survey (three-quarters of each year), and Professor of Geology and Geophysics at Stanford. After 1968 the Stanford position was relinquished.

Dr. Hubbert is a member of some half-dozen scientific and engineering societies, including: The Geological Society of America (President, 1961); the American Association of Petroleum Geologists (Associate Editor and twice Distinguished Lecturer); Society of Exploration Geophysicists (Honorary Life Member and former Editor); Society of Petroleum Engineers of AIME (Distinguished Lecturer); American Association for the Advancement of Science; American Academy of Arts and Sciences; and National Academy of Sciences (Committee on Natural Resources, advisory to President John F. Kennedy, 1961-1962; Chairman, Division of Earth Sciences, National Research Council, 1963-1965; Committee on Resources and Man, National Research Council, 1966-1970).

Dr. Hubbert's scientific work has been of a general, rather than of a specialistic, nature. It has included: geophysical exploration for oil and gas, and other minerals; petroleum geology and engineering; structural geology and the physics of earth deformation; physics of underground fluids, including the motion of ground water, entrapment of petroleum under hydrodynamic conditions and fluid behaviour in petroleum reservoir engineering. It has also embraced continuing studies for more than 4 decades of the world's mineral and energy resources, and the significance of their exploitation to human affairs. His active interests have also included the philosophy and history of science and its bearing on the education of scientists. He has had some 65 technical papers published, and is author or co-author of several texts.

For his work in geophysics, Dr. Hubbert was awarded the Arthur L. Day Medal of The Geological Society of America in 1954. For his contributions to petroleum engineering, he received the AIME's Anthony F. Lucas Gold Medal Award in 1971.

On October 6, 1972, Dr. Hubbert was awarded the degree of Doctor of Science honoris causa from Syracuse University. He also accepted an invitation from the Board of Regents of the University of California system to serve as a Regents' Professor on the Berkeley campus during the Spring Quarter, of 1973.

Dr. Hubbert retired from the U.S. Geological Survey on August 31, 1976. He is now much in demand at seminars on energy problems and has scheduled a European trip for the first half of 1977 where he has been invited to address scientific groups in a number of countries.

THE 'HARMLESS' LITTLE HUBBERT CURVE

One could be clever and say of that eventful day in San Antonio twenty years ago that "Hubbert really threw them a curve". Well, he did, and it was a very special kind of curve, one which was to grow in importance and respect for these last twenty years. Let me explain it to you in my fashion, not so much in the words of Hubbert the scientist but in the words of an editor of a fishing magazine.

According to standard geological theory, petroleum (which includes crude oil and natural gas) was formed over a period of 600 million years of geologic history. Coal was formed over some 300 million years. Their source is believed to be plant and animal life that did not die and then decay in the presence of oxygen as normally all plants do, but instead, plant life that somehow became covered with silt, mud, water, etc., in which oxygen was not present. Thus the plants did not decay but through 600 million years of heat and pressure from overlying layers of sediments, were converted into petroleum. Such plant deposits are still being accumulated today in swamps and bogs, but very slowly. To all intents and purposes, the amount" of petroleum that might "be formed during man's short history on this planet can be considered negligible. The same holds true for coal. These are the so-called fossil fuels.

Basically, our extracting petroleum and/or coal from the earth amounts to drawing checks on a bank account that will never receive any more deposits.

The total amount in the account is fixed. The more we take out, the less is left. The faster we take it out, the sooner our account will be empty.

In 1929, geologist Donald Foster Hewett of the U.S. Geological Survey addressed the American Institute of Mining Engineers, delivering what Hubbert has called "one of 'he more important papers ever written by a member of the U.S. Geological Survey",18 entitled "Cycles in Metal Production". Hewett had made a trip to Europe in 1926 during which he visited 28 mining districts, believing that many of the problems that harassed Europe mining industries in 1926 would also face us in this country at a later date. Hubbert pointed out the correlation with fossil fuels: " . . . like metals, the exploitation of fossil fuels in a given area must begin at zero, undergo a more or less continuous increase, reach a culmination and then decline, eventually to a zero rate of production. 18

Taking off on Hewett's earlier work, Hubbert used integral calculus to produce a curve that mathematically would illustrate the birth, middle years, and finally the death of an exhaustible resource, Fig. 1. Never mind the integral calculus part, this simple curve can be read by any grade school child. The production rate in billions of barrels of crude oil per year is shown on the vertical axis. The horizontal axis shows time in years. The curve illustrates that the production of crude oil started slowly, (about 1859), grew gradually for awhile, but by 1956 was growing very rapidly. Sooner or later, production reaches a peak from which it never recovers and then production continues to slide down and down, rapidly at first and then more slowly toward the end. Actually, it could be possible to have several peaks a short time apart before production slides forever downward, and actual production will never go completely to zero.

Note the square in the upper right hand corner. This is to illustrate the fact that each square on a drawing of this type equals a definite quantity of oil. For example, if we chose the vertical scale for each line to show 1 billion barrels per year production and each horizontal line to show 20 years, one square would equal 20 billion barrels of oil.

If you can make a pretty good estimate of the total amount of crude oil likely to ever be produced, obviously ALL of that crude oil HAS TO FIT UNDERNEATH THE CURVE. As an example, if you estimated 180 billion barrels as the total, 180 divided by 20 billion barrels per square would equal 9 squares which must fit underneath that curve. (Remember, this is a theoretical curve used to illustrate the principles involved, the actual production curve comes later.)

In preparing for his 1956 paper before the petroleum engineers, Hubbert gathered together the best estimates available at that time for the ultimate total amount of crude oil to be produced from the lower 48 states and adjacent continental shelves. His own estimate was 150 billion barrels. Only a month before, however, Wallace E. Pratt, retired vice president of the Standard Oil Company of New Jersey had released the results of a survey conducted among 25 of the men Pratt considered to be the best-informed in the industry. Pratt's own estimate for crude oil came to about 145 billion barrels, and reported that of 23 replies the highest of all, for 200 billion barrels, came from DeGolyer and McNaughton of Dallas. Also in February, Pogue and Hill, released their study which was for 165 billion barrels.

Consequently, Hubbert estimated the total amount of crude oil ultimately to be produced from the 48 states and adjacent continental shelves would lie between 150 and 200 million barrels.

He then plotted the curve shown in Fig. 2. Note that the solid portion underneath the first part of the curve shows the amount of crude oil actually produced to that date. The lighter shaded portion underneath the curve shows the known reserves of crude oil. The dotted lines with no oil shown underneath represent predictions for the future. Note that one prediction is given by the broken-line curve showing 150 billion barrels as the ultimate total of crude oil, the other prediction is given by the broken-line curve showing 200 billion barrels as the ultimate total of crude oil to be produced.

Look at these curves carefully, note that they show a peak production for the 150 billion barrel curve at about 1965 and the peak production for the 200 billion barrel curve only about 5 years later in about 1970. .

Now imagine the alarm this simple curve caused in the petroleum industry twenty years ago. It showed that the industrywide production of U.S. crude oil would peak somewhere within 10 or 15 years, (1965-70) and would go steadily down from there, not likely to ever rise again!

Note that a whopping one~third increase from 150 to 200 billion barrels of crude oil only postponed the dread "day of reckoning" when production would peak. . . by only about five years! That meant that if that dreadful date was to be postponed very far into. the future, estimates of 2, 3, 4 & 5 times as much ultimate total production had to be obtained. (That is exactly what followed in the next five years!)

No wonder "The 'Harmless' Little Hubbert Curve" had such an effect on the petroleum industry, and has even more significance today.

THE OMINOUS LOGIC OF THE HUBBERT CURVE

At first glance, you might be tempted to look at the Hubbert Curve and think: "How interesting. Really clever. Wonder what's for supper tonight?"

You do not have to be a wizard in mathematics to understand the inescapable truths of the Hubbert Curve. Any man or woman can easily understand the meanings of that curve which could be used for the production of oil, natural gas, coal, copper, zinc, aluminum, tin, lead, gold, silver, etc.

The key is to remember that each square on the drawing equals a certain number of units. . . in our case, billions of barrels of oil. Once we have settled on a reasonably good estimate of all the oil that will ever be produced by the U.S. 48 states and adjacent continental shelves, (and that number in September of 1976 seems to be about 170 billion barrels of crude oil), we can quickly count how many squares that equals on the drawing. If each square were picked to equal 25 billion barrels, as was shown in Fig. 2, then it will take about 6-3/4 squares to fit underneath the final Hubbert Curve for today. (The actual number would be 6.8 squares).

The first part of the curve is already fixed by known production of crude oil to the date of 1956 on Fig. 2. That's 52.4 billion barrels. That fits exactly under the curve to 1956. The proved reserves in 1956 amounted to 30 billion barrels. That is also shown under the curve. 52.4 plus 30 equals 82.4 barrels that are known, fixed, set. 170 billion minus 82.4 billion equals 87.6 left to be discovered and to fit under the curve. That's equal to just 3-1/2 more squares that can be made to fit under the final curve. Knowing that oil extraction slows down and stretches out over a long period of time from a depleting oil reservoir field, we know that the final 3-1/2 squares under our final curve must be stretched out into the future. It would be pretty hard to make the final portion of the curve for 170 billion barrels look much different than the two curves shown on Fig. 2 for 150 billion barrels and for 200 billion barrels. It would be pretty hard to make the final 170 bilIion barrel curve not fall somewhere between the other two.

What does this mean? It means we are very limited as to what we can do about our production of crude oil. Obviously if we made a superhuman effort to find it and pump it out faster, we could make the curve rise again, perhaps, but any raise above the curve as shown in Fig. 2 would be taking oil away from under the future part of the curve and then it would have to drop off even faster. It's inescapable that our oil reserves are like a checking account which will never receive another deposit. The faster you draw it out, the larger the checks you write, the sooner the account will be empty!

Now you know the ominous significance of the Hubbert Curve and why the petroleum industry tried to obtain vastly larger estimates of the ultimate total production. In effect, the only way to postpone the awful day of peaking followed by shrinking production was to try to add more money to the account. (With the aid of hindsight obtained from looking at it from September of 1976, their deposits to this country's crude oil checking account were paper money, and worth no more than the paper they were written on. But that story comes later.)

Fig. 3 shows what happened. In the five years following Hubbert's 1956 predictions, based on estimates of between 150 and 200 billion barrels of crude oil ever to be produced in the lower 48 states, estimates by others came in at 204, 250, 372, 391, 400, and zoomed up to 590 in 1961. Two years after that, even the 590 estimate was humbled by one for 658 billions of barrels of oil. Note on Fig. 3 that the three highest estimates of all came from men of the U.S. Geological Survey of the Department of the Interior. (Knowing that these were all thrown out the window by a U.S. Geological Survey Study in 1975, makes you wonder "who can you trust?")

Although the 1963 estimate was made by Duncan and McKelvey of the U.S. Geological Survey, it still is not clear to me whether or not the Survey recognized it as being their official estimate. (McKelvey was later to become director of the Survey, a position he still holds today.) So let's put that one aside and examine the implications of the estimate for 590 billion barrels of crude oil. See Fig. 4. Here the Hubbert Curves are drawn for 150, 200, and 590 billion barrels of oil as estimates of the ultimate total production. You will notice that this whopping big increase only shoves the dreaded date of peak production and decline another 25 years into the future, predicted to take place in about 1995.

If the 590 figure were correct, we would have now in 1976, another 19 years to find suitable substitutes for crude oil. As we know now, we don't. Production actually did peak in 1970 and has been going down ever since. If we could somehow raise it up again it could only quickly fall again - and then go down even faster than before. That should be easy enough to understand because it's an inescapable truth. If you understand it, however, you are part of a very very small minority in this country.

THE REASONS FOR OUR CHOICE OF WORD SO FAR

You surely must have been wondering why I keep stressing CRUDE Oil and the U.S. 48 STATES AND ADJACENT CONTINENTAL SHELVES. You know that oil has been discovered in Alaska, why don't I talk about it? Maybe you've heard the term PETROLEUM LIQUIDS and you're wondering why I keep specifying crude oil?

In the discovery and exploitation of natural gas, there is usually found a relatively small amount of NATURAL GAS LIQUIDS. In today's statistics of the petroleum industry, crude oil and natural gas liquids are sometimes added together and classed as "petroleum liquids". In general, a figure for petroleum liquids will consist of about 85% crude oil and 15% natural gas liquids. The reason I keep sticking to crude oil alone thus far in this Special Editorial Report is because the statistics for crude oil alone have been kept from the beginning of petroleum exploration. Also, crude oil is the foundation of the petroleum industry. In order to have the most meaning, I've been sticking to crude oil statistics. It avoids a lot of confusion. We'll add petroleum liquids in later on in this report.

The discovery of oil in Alaska's Prudhoe Bay occurred in 1968. It looks like a 10 billion barrel field. How much additional oil it holds can only be estimated by methods which work sometimes and do not work at other times. We'll talk about Alaska also a little later in this report.

I thought I'd drop these comments in at this time, however, so that you don't wonder whether or not I'm aware of Alaskan oil and the term "petroleum liquids". .

NOBODY FOOLS THE DRILL

The petroleum industry has been employing increasingly sophisticated methods of finding oil and estimating how much is down there, and getting as much of it out as possible. Contrary to some of the TV commercials you've seen which might give you the impression that suddenly we're doing all these wonderful modern things NOW to get oil, big strides were made in petroleum technology in the 20 years from 1945 to 1965. Although new improvements are always being made, the biggest strides were probably made in that 20 year period.

Despite all of the wonderful tools the petroleum geologist and the petroleum engineer now has at his disposal, THE ONLY TOOL THAT DISCOVERS OIL OR GAS IS THE DRILL!

Let that one sink in for just a minute. The drill provides the moment of truth in all exploration for petroleum. Let me help you understand the significance of that statement.

It's practically a professional requirement for a petroleum geologist to be an incurable optimist. It costs a lot of money to drill a new hole. New oil fields are discovered only by new-field wildcat wells. These are holes that are drilled well away from existing oil fields. That's exploratory drilling and is different from the drilling done to tap known oil fields for further production. It's important to understand the difference. The average cost of a new-field wildcat well in 1972 was $96,000.2

In order to break even, it is essential that such a well discover a million barrels of oil or more, or the equivalent in natural gas. In order to get such a well drilled, a petroleum geologist has to put together all of his data from all of his instruments, geologic maps, regional geology, subsurface geology, seismic map, gravity data, and so forth, and convince the boss that if a well is drilled in such and such a place it will discover a million barrels of oil or more. Obviously, that's playing poker with high-priced chips.

In 1945, it required 51 new-field wildcat wells to make one profitable discovery of oil. By 1965, it required 137!2 Yes, it's getting harder and harder to find oil.

When gas and oil are taken together, the numbers will change. As of 1972, the latest year for which such information was available was 1965. In 1965, a total of 6,175 new-field wildcat wells were drilled to find 97 significant (profitable) discoveries of oil or gas.2 That's 1 in 64, for oil and gas combined. "There is little doubt that most, if not all, of these 97 successful wells were drilled in response to professional recommendations of petroleum geologists, or their counterparts, petroleum geophysicists; but who recommended the drilling of the 6,078 failures?"2 (Hubbert, in 1974 report to U.S. Senate Committee.) The same petroleum geologists and geophysicists, of course.

Now that you understand something of the odds the oil companies face, even with the best professional guidance of their geologists, you can truly understand the significance of the statement:

THE ONLY TOOL THAT DISCOVERS OIL OR GAS IS THE DRILL!

The drill discovers crude oil (or natural gas) in the amounts that are present and in the amounts that the technology of the time allows to be recovered from that particular oil or gas field. Each new oil field is credited to the year in which it was discovered. For example, the big oil field of East Texas was discovered in 1930. It is credited to that year because it was the exploratory drilling of that year which found it. Today, 46 years later, the East Texas field is still producing oil from reserves that were found in 1930.

Accurate records are kept of all the exploratory drilling for oil (or gas), and the total number of feet of exploratory drilling runs into almost 2 billion feet. Now, if you can figure out the number of barrels of oil that are discovered per foot of exploratory drilling, you will have an undeniable measurement of how you're doing in this high-priced poker game of exploring for oil or gas.


In November, 1967, The American Association of Petroleum Geologists Bulletin printed a scientific paper prepared by Dr. Hubbert. It was entitled, "Degree of Advancement of Petroleum Exploration in United States."

Dr. Hubbert had laboriously researched the exploratory oil drilling figures and discoveries all the way back to 1859 when oil was first discovered in this country by "Colonel" E.L. Drake on August 27, 1859 at Titusville, Pennsylvania, at a depth of 70 feet. He grouped the oil discoveries, not by years, but by each 100 million feet of drilling.

Fig. 5 is the result of some of his research updated thru 1972. Note that the number of barrels of crude oil discovered per foot of exploratory drilling for the first 100 million feet of drilling covered 60 years and produced oil at an average rate of about 240 barrels per foot of drilling. During the second 100 million foot interval, it dropped to about 161 barrels per foot.

Third interval of 100 million feet of drilling covered the 1930 accidental discovery of the East Texas Field, (biggest in the U.S. 48 states), and covered the period from 1938 to 1937. The discovery rate in this interval jumped to a record never attained again, about 300 barrels per foot.

The following 100 million foot interval saw the rate drop to 239. Then it kept dropping to 99, 76, and by the 15th interval, as low as 21 barrels per foot. This was followed by a slight reversal to 34 and to 30 barrels per foot for the last two intervals.2, 14

Study Fig. 5 carefully, for it is important that you understand all that it tells us. The dates are at the top and a little hard to follow because they show when the actual drilling was done and are unevenly spaced because more drilling was done in some time intervals than in some others.

Note that roughly 540 million feet of exploratory drilling took place between 1859 and 1950, that's 91 years. Note that roughly 750 million feet of exploratory drilling took place from 1950 to 1960, a period of 10 years; note that roughly 470 million feet of exploratory drilling took place in the 10 years between 1960 and 1970. (These figures are rough calculations based on reading Fig.5.)

You will see that a great amount of drilling took place in 1950-1960, but that the number of barrels discovered per foot kept dropping. In the 10 years between 1960 and 1970, drilling dropped by about 38% from the previous decades but perhaps we can understand why. The number of barrels of oil per foot of exploratory drilling continued, overall, to drop. Perhaps you are one of those suspicious persons who believes that the oil companies refuse to look for more oil. If so, let me point out to you that 470 million feet of drilling is a lot of hole. . . and you can see that there were increasing numbers of dry ones. Compare the 470 million feet of drilling in the 10 years from 1960-1970 with the 540 million feet drilled during the first 91 years of oil's history in this country.

". . . the period from about 1945 to 1965, during which this drastic decline occurred (in discovery rate of barrels per foot), was also the period of the most intensive exploratory activity, and of research and development of exploratory and production techniques, in the history of the petroleum industry. 2 (Hubbert in 1974 report to U.S. Senate Committee.)

Now you can more fully appreciate the significance of the statement that the president of an oil company can issue orders to his men to drill more holes in any particular year, but it is beyond his power to order them to discover more oil or gas per foot of hole. Nobody fools the drill!

THE DRILL CAN BE USED TO TELL US HOW MUCH OIL OR GAS IS LEFT

In Fig. 6, you will find that Dr. Hubbert has used drilling figures in another way. He shows us that the pattern of declining production rates in barrels of oil per foot closely fits a mathematical curve, which he uses to project that the ultimate total production of crude oil in the U.S. 48 states and adjacent continental shelves will be about 172 billion barrels. In Fig. 6 he also shows that the 590 billion barrel estimate of 1961 by A.D. Zapp of the U.S. Geologic Survey can be proved to be an overestimate of 418 billion barrels.

WE'RE NOT GOING TO GET MUCH MORE CRUDE OIL

In Fig. 7, Dr. Hubbert shows the latest projection of the now-famous Hubbert Curve which he prepared at the request of Senator Henry Jackson, Chairman of the U.S. Senate Committee on Interior and Insular Affairs. This curve is only part of a large study of "U.S. Energy Resources, A Review As Of 1972". Part I, a monumental report of 267 pages was prepared entirely by Dr. Hubbert, submitted to the Committee in late 1973 and printed and released by the Committee"in June, 1974. It is the most comprehensive report available by Dr. Hubbert, and is available for $2.15, from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402, Serial No. 93-40 (92-75), Part I. You might be interested in sending for a copy for yourself.

By now you should be an old hand at reading the Hubbert Curve. You will see that he has settled on a final value (as of 1971), of 170 bilIion barrels of crude oil ultimate total ever to be produced from the U.S. 48 states and adjacent continental shelves. You will also note from Fig. 7, that most of our crude oil has already been produced and/or discovered and that not much remains to be discovered and produced. From our study of the Hubbert Curve and our understanding of its relentless mathematical logic, you will see that there really isn't much we can do to drastically change that pattern. (No matter what some of the oil companies are saying!)

THE STORY ON NATURAL GAS

Figure 8 is the first Hubbert Curve on natural gas and dates back to 1961. Just as in the first Hubbert Curve on crude oil in 1956, the figures for the future are somewhat tentative, but within limits. Statistics on proved reserves have only been kept since 1945. He estimated the peak in proved discoveries was in 1961, the peak in proved reserves at about 1969, and the dreaded peak in the rate of production about 1977. What later happened in fact was that the industry withdrew natural gas from our natural gas checking account much faster than Hubbert had anticipated in 1961 and caused our balance to speed faster toward zero. The dread peak in production (and decline every year thereafter) actually took place in 1973. Fig. 9 is the Hubbert Curve as of 1972 for natural gas showing that the peak of production is very near. As with the final 1971 Hubbert Curve for crude oil, you can easily understand that most of our natural gas has been produced and/or discovered, (some is in proved reserves, of course) and that the curve shows production has to drop off very sharply from the peak which was actually reached in 1975. Not much can be done to alter that which we see is going to happen. All of the natural gas that will ever be found must fit underneath the curve.

In Fig. 10, Dr. Hubbert applies the same analysis he used for crude oil in developing data from exploratory drilling. You will note the same steady drop that we saw in the figures for crude oil. Obviously, we are taking natural gas from a diminishing supply. There's not all that much money left in our natural gas checking account.

The American Gas Association, through their spokesmen in Washington and in the press, have been telling us: "Give us a decent price for our natural gas and we'll get production back up to that 1973 level."

My personal reaction is they ought to show the American people some cold, hard data to prove that all that "new" natural gas is really there, waiting to be found. The news from the drill says otherwise!

THIS IS NOT A WITCH HUNT

Perhaps it would be right to point out at this place in the editorial that I am not looking for "robber barons", "crooks", "rip-off artists", etc. as some critics have called members of the petroleum industry in an attempt not to believe that our country is faced with an "energy crisis". Oil companies take big risks, they make big money, and they play for keeps. The president of any corporation will make a profit for that company or his replacement will. The petroleum industry has been reluctant to admit that our oil reserves are dropping, but some of them are changing even that during the past year or two.

What manipulations take place in the marketplace are not known to me, I am only trying to give you an understanding of some of the facts of life in the exploration and production of oil and gas so that you will understand that our country is faced with a true Petroleum Predicament. Are the petroleum companies trying to make all the money they can out of it? I don't know and neither do you, but my guess at an answer is, "Of course. Doesn't every company try to make all the money it can at ANY time and ALL THE TIME?"

The petroleum industry doesn't need me to defend them, but neither will I attack them without facts.

The facts of petroleum production in the United States are simply that it's getting harder and harder to find more oil and gas. . . especially in the insane amounts that we are gobbling up!

It is not my purpose in this editorial to get into the subject of whether or not the petroleum industry represents a cartel, whether or not they operate in violation of anti-trust laws, whether or not they should be "broken up", or any of the other charges and counter-charges that are being made by critics of the industry. Congress is giving careful study to these questions, I believe, and indeed they should.

BIG, BIG MONEY IS INVOLVED

In the principal Conclusions listed at the beginning of this editorial, I quoted some figures prepared by Dr. Hubbert in his 1974 report to the U. S. Senate Committee on Interior and Insular Affairs2 on the to tal cost to the American people of a $1 per barrel price raise on oil and a 20c raise on a 1,000 cubic feet of natural gas, based on 1974 estimates. The combined total for those simple price raises came to $233 billion. Actually, price raises amounting to several times those examples have taken place since 1974. You can see that the amount of money involved is out of sight.

The petroleum industry has mounted one of the greatest lobbying campaigns in history I am told, to press Congress and The White House for more money, which they say they need, and which, they say, will enable them to go out and "find all the natural gas and oil that we need". Based on my observations, the American Gas Association has been especially active in this campaign.

The oil industry seems to be quite realistic, no longer do we get the wildly optimistic statements of 1973 & 1974. On the contrary, some of the major oil companies, to their credit, have been quite candid about our dwindling resources of crude oil. Not so with the natural gas people, however, They are promising us-that "if you allow us to get a fair price for our natural gas, we can afford to go out and bring gas production back up to the peak of 1973 by 1985". I personally heard an official of the American Gas Association make that kind of statement here in Milwaukee last March. (I sat next to Dr. Hubbert at that meeting, and he put his head between his hands and said softly, "No, no, no.")

About eight months earlier, a significant article had appeared in the Milwaukee Journal on July 11, 1975,21 that read as follows:

"NATURAL GAS PAST PEAK, FPC WARNS"

"Washington, D.C.-The Federal Power Commission staff, in its gloomiest report yet, said Friday that the nation's natural gas production had already reached its peak and had begun to decline.

" In the report, the FPC's Bureau of Natural Gas said that no matter what is done, natural gas production in the US apparently will never again meet demand.

"The bureau warned energy policymakers to develop plans and policies keyed to the possibility that the nation may indeed be experiencing the early effects of a resource being pushed toward exhaustion:

"The staff takes issue with statements that there are as yet huge undiscovered natural gas supplies that will pull the nation out of the present shortage. Such estimates range from 568 trillion cubic feet to 1,450 trillion. The nation uses about 22 trillion cubic feet a year.

"The report said more recent estimates were that 400 trillion cubic feet or less remained undiscovered."

Five months later, another significant warning appeared in the Milwaukee Journal on December 14, 1975,21 by Paul G. Hayes of the Journal Staff:

"NATURAL GAS DIP TERMED IRREVERSIBLE"

"A top federal energy expert said here Tuesday that there probably was no way that the US could ever reverse its declining production of natural gas.

"Our analysis is that conventional US gas production has reached its peak and will be declining for the indefinite future,' said Frank C. Allen, chief of the Bureau of Natural Gas of the Federal Power Commission.

My personal reaction to this campaign for more money is this: If the industry is entitled to certain price increases due to increased operating costs and high risks in exploration, Congress should grant these increases. However, as to the promises about getting us all we want, hold on a minute.

Is the American Gas Association trying to tell us that they honestly drilled all their worst holes first? The drilling records show that gas produced per foot of exploratory drilling has been in a general decline for the past 20 years, despite all the increases in technology. (See Fig. 10). Has the industry saved their best holes to drill NOW, after 20 years of declining discoveries per foot of hole? I do not understand.

The oil industry today seems to be talking more sense, in my opinion. They seem to be saying, in effect, "Look, it's getting tougher and more costly all the time to get more oil. We are in business to sell all the oil we can, but we have to have more money if we are going to undertake these expensive projects. We'll find you more oil if you give us more money."

I think that Congress should tell both of them: "Show us the hard evidence that all that "new" oil and gas is really out there to be found."

When anyone says they are going out to get us vast new quantities, I say, "Tell it to the drill".

In 1492, Columbus discovered America. After his famous voyage, and for perhaps the next 400 years, men kept discovering more new islands and even some new continents, adding them to the maps of the known world. No one would argue today that there are great numbers of new islands and continents out there waiting to be discovered. Sooner or later, as we looked long enough and hard enough, we discovered them all. After all, their number was fixed, there were just so many.

In a similar fashion; the amount of crude oil and natural gas on this continent were fixed hundreds of millions of years ago. The continental United States is already the most heavily searched, drilled, poked-into-and-explored (for oil) piece of real estate on earth. By every sign we are getting close to discovering the major portion of whatever is left undiscovered. (You know, there weren't many new islands or continents remaining to be discovered in, say 1890.)

THE ODDS ARE BETTER AT LAS VEGAS

As I pointed out earlier, drilling to find oil in the U.S. is becoming an ever more risky business. Let me give you an example. In 1953, Ralph Miller of the U.S. Geological Survey presented to the Senate Committee on Interior and Insular Affairs the Survey's best estimates for oil to be found in the Gulf of Mexico off of Louisiana and Texas. These were good estimates based on a careful geological comparison between the offshore areas and similar areas onshore. Since the same formations of oilbearing sediments which extended out under water were already known to be good producers of oil on land, the projections were based on solid data. (The U.S. Geological Survey, in 1953, had not yet started the wild overestimating game they played from 19611975.)

Ralph Miller presented estimates of 9 billion barrels of oil to be recovered off the Texas shore and 4 billion barrels off the Louisiana shore. After more than 20 years of intensive exploration, about 5 billion barrels have been discovered off of Louisiana and almost NONE off of Texas!

A September 12, 1976 article in the Milwaukee Journal quotes a United Press International story from New York City. Bids were being taken for leasing some 876,000 acres of underwater land on the Atlantic continental shelf. Estimates as to how much crude oil the shelf contains range from 400 million to 1.4 billion barrels. (Keep those figures in mind, we'll bump into them again).

 Larry Lindahl, Getty Oil's Director of Exploration, talks about the "Destin Dome" venture of several years ago:

 "Exxon Corp. paid $221 million for a single tract ofland off the coast of Panama City, Florida that was called Destin Dome."

 "After that they put in $800 million more for drilling and research and came up with nothing, not a drop of oil to show for their billion bucks."

Only ten days before this article appeared in the Milwaukee Journal, I had interviewed Dr. Hubbert for 5-1/2 hours on September 3rd, 1976, in the study of his home in Washington, D.C. Dr. Hubbert described the Destin Dome as a very large anticlinal structure of the type known to normally contain large amounts of oil. This was so large, that if it were full of oil; it would be an oil field comparable to the Middle East. (The world's largest known to date.) Three companies, including Exxon and Mobil combined to pay a bonus for the lease, which was said to have been the highest bonus ever paid. These companies went and drilled 7, deep, dry holes. It was one of the costliest fiascos in the history of the American oil industry.

These same sure-fire, reliable methods (?) have been used to estimate the total amount of oil we hope to get out of Alaska. At this very early stage of the game, Alaska is still virgin territory. Alaska's Prudhoe Bay has been estimated to hold 5-10 billion barrels, discovered in 1968. To the disappointment of many in the industry, no major new discoveries have been made in Alaska for the past eight years.

More on Alaska: Newsweek of August 16, 1976,16 reports:

"ON-AGAIN, OFF-AGAIN OIL"

"The Alaska pipeline has more headaches in store for Washington energy officials. For one thing, they must decide soon whether to risk a new environmental battle by relaxing construction standards (waiving the mandate to X-ray all pipe welds, for instance) in order to make sure the line begins pumping North Slope oil by 1977,the scheduled opening date. In addition, they may have to scale down forecasts that oil will flow from the Slope at a 2-million-barrel-aday pace. With no new discoveries recorded since the original1968 strike, one top oil man says, the area's reserves will not support production higher than 1.4 million barrels aday."

Even Las Vegas doesn't have a table where players can bet and lose as much as a billion dollars. And, even Vegas wouldn't dare run a game with the odds now not uncommon in the oil industry!

THE WILD YEARS FOR CRUDE OIL ESTIMATES


In Fig. 3 on page 20, we looked at the way estimates of crude oil ultimate total production shot up in the 5-7 years after Hubbert's precedent-shattering predictions of 1956. The key in any of these estimates is the total amount of oil expected to ever be produced, what we call the ultimate total production. The importance of that figure is that it's good for as many years as you want to use it. Each year more oil is produced, each year the proved reserves change, so that by a simple process of addition and subtraction you can quickly come up with the amount of oil you still expect to discover in the future. Not all estimates, however, were put into that neat little format. In order to arrive at the figures listed below, some additional arithmetic had to be done. (Between that and the problem of finding exact dates, we increase our chances of making slight errors; which, though inconsequential in importance, might lead to charges of "sloppy work" by people who don't want to believe that we have an energy problem in the first place! That's the old "kill the messenger" habit, of course.)

Let's go back now, and take a look at some of estimates for ultimate total production of crude oil that were made in the period following the 1956 prediction by Hubbert.


Date
Ultimate Total Production Estimate By
1956 150-200 billion barrels Hubbert
1961
407 -507 billion barrels
Senate Committee on Interior & Insular Affairs (Lasky)
1962
885-1,000 billion barrels (by inference)
McKelvey, (U.S. Geological Survey) letter to National Academy of Science of July 20,1962: ". . .Zapp's estimate of 590 billion barrels is still a conservative estimate because it allows for only 50 percent recovery, whereas 75-85 percent is probably reasonable to expect for uItimate."
1963
650 Duncan & McKelvey (U.S.Geological Survey)
1965
billion barrels (slight variations from year to year but all McKelvey & Duncan (U.S. Geological Survey)
1966
in this range) McKelvey & Duncan (U.S. Geological Survey)
1967


McKelvey & Duncan (U.S. Geological Survey)
1965 400 billion barrels
Hendricks. (U.S. Geological Survey)
1969
168 billion barrels Hubbert, Energy Resources in "Resources and Man" Chapter 8, National. Academy of Science"
1971
432 billion barrels on 60% recovery National Petroleum Council American Association of Petroleum Geologists (Ira H. Cram)22
1972
420-2250 billion barrels Theobald, Schweinfurth & Duncan, U.S. Geological Survey Circular 650 11
1972
No limit, apparently Vincent E. McKelvey, Director, U.S. Geological Survey in his McKinstrey Memorial Lecture, "Mineral Resource Estimation and National Policy", presented at Harvard University in February of 1971 and published in 1972. Concluding statement:"


"Personally, I am confident that for millenia to come we can continue to develop the mineral supplies needed to maintain a high level of living for those who now enjoy it and to raise it for the impoverished people of our own country and the world. My reasons for thinking so are that there is a visible undeveloped potential of substantial proportions in each of the processes by which we create resources and that our experience justifies the belief that these processes have dimensions beyond our knowledge and even beyond our imagination at any given time".

When you examine the "boomer" estimates of superabundance the United States was receiving for crude oil, (estimates for natural gas were equally high in every case where they accompanied the crude oil estimates), it is no wonder that official Washington and the country felt supremely confident that we had enough gas and oil to last us through the rest of this century and well into the next one!'

THE GATHERING CLOUDS OF DOUBT

The swaggering overconfidence of the sixties and early seventies started to come under a cloud in 1971. Pressures mounted in Congress for an explanation as to why United States Geological Survey figures were so high in contrast to the figures estimated by Hubbert, who was highly rated in scientific circles and growing in stature in both the public and political sectors. Some of the oil companies were privately circulating statements that their own figures were considerably below those of the U.S. Geological Survey.

In September of 1971,  Sen. Henry M. Jackson wrote a letter to the Department of the I nterior requesting that Hubbert prepare an update of his 1962 report for the National Academy of Science and subsequent scientific papers including "Resources and Man" which had been published during the interim.

Interior bowed to Jackson's request, of course, and' Hubbert was assigned to the task. He was promised extra secretarial help and a technical assistant. On November 1, 1971, however, Hubbert "lost" the one secretary he had enjoyed, due to a budget tightening order from the White House. For about two years he would send out official letters in longhand. No technical assistant was forthcoming, either, although some time later he would obtain the services of a college student as a part-time assistant.

Hubbert thus had to begin the two-year task of preparing Part I of the report, "U.S. Energy Resources, A Review as of 1972", a Background Paper Prepared at the Request of Henry M. Jackson, Chairman, Committee on Interior and Insular Affairs, United States Senate.2 He prepared the 267 page report in longhand and his wife typed it all for him at their home. The Report was finished in late fall of 1973 and transmitted to the Senate Committee, which released it in June of 1974.

On March 26, 1974, the U.S. Geological Survey of the Department of the Interior handed out a News Release entitled: "U.S. Geological Survey Releases Revised U.S. Oil and Gas Resource Estimates,"13 Earlier in the month, this report had beer) summarized by Vincent E. McKelvey, Director, U.S. Geological Survey in an appearance before the Senate Committee on Interior and Insular Affairs.

I have assembled figures from that News Release for you as follows:

(in billions of barrels) High Range
Low Range
Total U.S. production thru 1972, of crude oil and natural gas liquids. 115.27 115.27
Measured Reserves 48.3 48.3
Indicated and inferred reserves 25 45
Undiscovered recoverable resources 200 400
Crude oil in billions of barrels 388.57 608.57
Using an estimated 85% for crude oil alone, gives ultimate total production estimates as shown. 330.28 517.28

THE BUBBLE BURSTS

Hubbert's estimates, as of 1972, for Energy Resources of the United States, were published by the Senate Committee on Interior and Insular Affairs in June of 1974.2 His estimates were as follows:

Estimates of Ultimate Total Amounts of Crude Oil, Natural Gas Liquids, and Natural Gas to be Produced in the Entire United States and Bordering Continental Shelves:

Lower 48 States Alaska Total U.S
Crude Oil in billions of barrels 170 43 213
Natural Gas Liquids, in ,billions of barrels 34 5 39
Total Petroleum liquids, (also known as hydrocarbon liquids) in billions of barrels 204 48 252

In March of 1974, a letter from John Moody, Executive Vice President of Mobil Oil to McKelvey, Director of U.S. Geological Survey, was circulated all over Washington, pointing out that some of McKelvey's figures were as much as ten times those of Mobil. This led to a gathering of a panel for the National Academy of Science, and the subsequent issuance of a report in February of 1975 entitled, "Mineral Resources and the Environment".10

Their estimate for ultimate total production of crude oil was 247 billion barrels, compared to Hubbert's of 213 billion barrels, making them about 16% higher than Hubbert. (The National Academy of Science does no direct research itself, it reviews and passes judgement on the work done by all the various parties in a given line of scientific work.)

Pressures on the U.S. Geological Survey were so great by September of 1974 that they finally set up a Resource Appraisal Group on a crash basis to conduct a totally independent review of estimates for U.S. oil and gas' and to produce an appraisal by June of 1975.

The group was co-chaired by Betty Miller of Sun and Harry Thomsen of the Survey's Denver office. Their findings were that the ultimate total production of crude oil for the entire United States will lie between 218.12 billion barrels (with a 95% probability) and 295.12 billion barrels (with a 5% probability), published in U.S. Geological Survey Circular 725, June 1975.4 Their figures, compared to Hubbert's estimates of 213 billion barrels, show a remarkably close agreement. When you consider that three completely separate sources, trying to estimate what lies beneath millions of square miles of land and water, could come out so close to one another. . . it's a good sign that at last this country was back on the right track.

Circular 725 ended a 15-20 year period in the history of the U.S. Geological Survey which can only be classified as a sorry episode.

Now the bubble has burst. Our big, long spree based on cheap and plentiful petroleum is over. North America never had more than 15% of the world's petroleum, and the U.S. share is now more than half gone.2 We are using petroleum faster than any nation on earth. No amount of money is going to find oil that isn't there. We have now reached the peak from which we can clearly see the way down the slope.

OIL FROM THE ATLANTIC SHELF: GOING. GOING. ALMOST GONE

A good illustration of the senseless ballooning of so-called scientific estimates is the brief, recent history of the chances of getting oil from the Atlantic continental shelf. In 1963, news stories appeared about "hot new" oil finds on the Atlantic shelf. The experts at the U.S. Geological Survey of the Department of the Interior announced that 48 billion barrels were there to be taken. In early 1974, Secretary of the Interior, Rogers C. B. Morton announced that there were 200 billion barrels of oil to be found in the offshore continental shelves of the United States. In March of 1974, the experts of the U.S. Geological Survey announced that the 200 billion barrels was now more likely to be 100 and that the number for the Atlantic shelf had shrunk from 48 to 15. In June of 1975, the Resource Appraisal Group, in the Survey's Circular 725, corrected that to a much lower estimate of only 0 billion barrels with a 95% probability and 6 billion with a 5% probability. Stating it in a different manner, they estimated 2 billion with a 75% probability to as high as 4 billion with a 25% probability.

Current stories in the press now talk about 200 million to 1.4 billion barrels for the Atlantic shelf. From 48 to 15 to 2-4 to .2 - 1.4! Somewhere we lost 46.6 billion barrels of oil. No wonder we're running short!

PETROLEUM - THE WONDER CHEMICAL BUILDING MATERIAL

The Milwaukee Journal of January 26, 1975,24 reports:

Richard Perry of Union Carbide Corp. noted that about 93% of all carpeting, 70% of all women's and children's clothing. - including stockings and pantyhose - and more than 40% of men's clothing is manufactured from man made fibers derived from petrochemicals.

Also derived from petrochemicals are detergents,

plastic food wraps and bags, aspirin, antibiotics, solvents for dry cleaning, household and appliance paints, vinyl wall coverings and floor tile and refrigerants for air conditioners, freezers and refrigerators.

Here are some more of the things made from petrochemicals in a list furnished by Phillips Petroleum:

"Everything from plastics: toys, fishing poles, boats, buttons, battery cases, bowling balls, school and stadium seats, golf clubs, chairs, house building materials, garden hose, pocketbooks, surgical materials, tableware, parts for radios, automobiles, furniture, ice coolers.

"The biggest use of synthetic rubber is for tires. Tire-type synthetic rubber has been improved tremendously through the years. More and more kinds of synthetic rubber are being "tailor made" for a growing number of uses other than in tires. Some of these are for wire and cable coatings, adhesives, shoe soles and heels, flooring, footwear, and so on.

We don't have the space to tell you more of the many uses for petroleum and natural gas, but

doesn't it seem to be a shame just to burn it for heat? Now you know why Dr. Ralph E. Lapp, nuclear physicist, has described the burning of petroleum as "an atrocity, a chemical crime".5 This is the wonderful stuff that we waste more of than any nation on earth.

THE RISE & FALL OF AMERICAN OIL

Stewart Udall was Secretary of the Interior for eight years under Kennedy and Johnson. He was the boss man of Interior during the time when oil predictions were running wild. He got "taken in" by it all, too, and he freely admits it in a powerful, hard-hitting book that tells it like it really is in this country and what we face. He was joined by Charles Conconi and David Osterhout in writing The Energy Balloon. I suggest you buy or borrow a copy and read it. I think it will disturb you. He says, "Having help lull the American people into a dangerous overconfidence, I felt a moral duty to admit my own errors and to expose the wildly optimistic assumptions that had misled the country. It was clear to me that an enormous energy balloon of inflated promises and boundless optimism had long since lost touch with any mainland reality."

Here's an important page from the book, read it and cry. Some day we can explain to our children why we allowed it to happen:

U.S. PETROLEUM MILESTONES

Pioneer Period

1859 First U.S. oil well drilled
1905 High tide of Rockefeller's Standard Oil Trust: petroleum supplies only 10% of U.S. energy
1925 U.S. produces 71 % of the world's oil 1930 Conditions of glut: oil sells for 10c a barrel
1945 U.S. uses 4-1/2 million barrels of oil a day while supplying 70% of allied war needs.

Golden Age of Oil

1949 U.S. is an oil-exporting country
1953 U.S. oil companies account for about half of world oil production
1954 U.S. pumps half of the world's oil from domestic fields and consumes nearly all of it in this country
1955 U.S. has 20% of the estimated world crude oil reserves

Maturity and Decline

1961 U.S. proven reserves reach a peak and begin to decline
1970 U.S. production peaks and begins to decline
1973 U.S. imports 38% of the oil it uses
1973 U.S. annually consumes about 30% of the world oil supply
1973 U.S. has only 5% of proven world reserves

OIL FROM 'ALTERNATE SOURCES'

You read about "oil from shale", right? You heard about 1,000 billion barrels of oil out west? Don't get excited, it's going to stay there. Dr. Hubbert told the Senate Committee on Interior and Insular Affairs it wouldn't work, three years ago this month.

It really sounds simple. You "simply" dig up such enormous quantities of shale (1.88 million tons a day,) that it's equal to digging a Panama Canal every week. You crush it fine and heat to 1,100 degrees in a retort to boil off the oil locked in the rock. Then you get rid of the rock. Only now it's turned caustic and has increased in bulk by 20% to 33%. So you back-fill the leftovers, called tailings, into the hole you dug it out of. Since you still have a lot left over, you dump it into the empty scenic canyons of the west. To do this you need to grab off 89% of the undeveloped water of Colorado and Utah and half of Wyoming's. Oh yes, and you turn the Colorado River system into alkaline salts which means you wreck the agriculture in Colorado, Arizona and southern California. What will this get you? 1-1/2 million barrels of oil a day out of the 17 million per day that the U.S. is using!

A news item in the Milwaukee Journal of August 29, 1976,25 says that the last of the oil shale development companies, Standard Oil, Gulf, Shell and Ashland, have walked away from the projects in Colorado and Utah, asking the Department of the Interior to release them from paying any more on their leases. Standard and Gulf have already paid $126 million of the $210 million they bid, and Shell and Ashland have paid about $70 million of the $117.8 million they bid. You have to admit they tried, really tried and they spent a big buck to make it work, but it won't. Oil would have to go to a price of $20 a barrel to make the economics work and nothing would be worth the damage done to the West by such a project.

Oil from tar sands? Don't keep your engine idling while you wait. One plant in Alberta, Canada has been in operation since 1966 at a rate of 45,000 barrels a day. They can't make money at that rate, should have a plant 2-1/2 times as large. That would be 112,500 barrels a day. That's 7/10 of 1 percent of what we burn each day, and this oil belongs to Canada. Shell of Canada has just pulled out of the project after dropping a bundle of dough. It's just tough, really tough, trying to find new oil.

Stewart Udall says that he had 8 years' experience with the problems of oil from shale and oil from tar sands. He makes the flat-out statement that:

"This century would see no real substitutes for petroleum on this planet". THAT IS OUR PETROLEUM PREDICAMENT! Aside from that. . .

THE MONSTER OF EXPONENTIAL GROWTH

Suppose you put money into the bank at 7% compound interest. In 10 years it will double. A system of exponential growth is one in which the entire system grows by a certain amount each year, such as the money example above. To get the doubling time in years, you simply divide the number 70 by the rate of annual growth. Thus, a 5% compound interest rate would double your account in (70 divided by 5 which equals) 14 years.

Remember the "chain letter"? You simply ask two of your friends to join the chain letter scheme and then they each ask two friends, and so on. That doubles each time, right? Well, in just 28 doublings you'd exceed the present population of the United States (222 million), and in 32 doublings you'd exceed the 4 billion population of the world! Gee, you'd think you could find 28 people to take your letter, wouldn't you?

A French riddle goes something like this: You have a pond in which you place a water lily. Every day the water lilies will double in numbers until on the 30th day, your pond is completely full. You're not going to notice it until your pond is only half full, then you're going to do something about it. When will your pond be half full? On the 29th day! Okay, a small dam separates your pond from a huge lake which combined with your pond to form a lake would be 32 times bigger than your pond. Now, you tear out the dam and combine the two together. How much more time will you gain before your new kingsize pond fills up with water lilies? Five days!

An ancient Persian king was fascinated by the game of chess. One of his court attendants brought the king a present of a beautifully hand-carved, ebony chess board inlaid with mother of pearl, gold, and precious stones. The king was delighted.

"What can I give you to show my appreciation?", the King asked him.

"A few grains of wheat, your majesty. Just one grain for the first square on the board, 2 grains for the second square, 4 grains for the third square, and so forth. That's all, your majesty", the court attendant replied.

"It shall be done", said the King, and sent his servants to his storehouse for a bag of grain.

When it came to the 19th square, it called for 524,288 grains of wheat and the King's storehouse was empty. The King called one of his Wise Men and they conferred for a minute. Suddenly the King ordered the attendant dragged from the room and had his head cut off. What caused his sudden change of heart toward the man he had promised anything only a short time before?

The Wise Man had told the King that when they reached the 64th square, which was 64 doublings, it would require the entire world's annual wheat crop for the next 2,000 years to fill the board!

That's exponential growth, it's a monster that sneaks up on you. Suddenly the numbers get so big they can't be managed. Time runs out fast, as with the water lilies. Ultimately the numbers become impossible, as with the grains of wheat. 64 doublings of one automobile would cover the earth with cars 72 miles deep!

We've been on an exponential growth kick in this country since the turn of the century, and especially since the end of World War II. If "more is better", then still more should be even better than that. There is never enough. The Gross National Product must grow 4-5-6-8% each year, so must autos, so must electric appliances. We doubled our registration of cars in the sixties. Electricity has doubled every 10 years since who remembers when? Energy doubles every fourteen or fifteen years, while the population will double in about 75 years. More, more, more. .

We've been on a high speed joyride for the last thirty years. Cheap and plentiful oil was the vehicle. It is behind all of our "progress" of which we are so proud. "More is better. There is never enough", that's the slogan of this country; to say otherwise is to be unAmerican. .

We've had about as many doublings as we can take in most of our systems. And now the cheap, plentiful oil that lubricated our joyride has come to an end.

We can still get oil, all we want, from "our friends". The price and terms, however, are getting steeper. Cheap oil is over, we blew it!

CATACLYSM OR A GOLDEN AGE - OUR CHOICE

In the last hour of my Washington interview with

Dr. Hubbert, I asked him what kept him going for 20 years, trying to give people a message they didn't want to hear? How did it feel to give the country a vital message when you were 52 and have to wait until you are almost 70 before they start to listen? He didn't hesitate a moment, he looked directly into my eyes and started softly to speak. I turned the tape recorder closer to him so I wouldn't miss a word:

"It's a problem of trying to educate the public to the state we're in. We must view it over a long time span - this phase we're in of exponential growth is about over. We're entering into something new.

"It could be a cataclysm, but it doesn't have to be.

"It need not even be an energy crisis. The transition from exponential growth over to a stabilized state or non-growth, need not be a state of intellectual decay. In fact, it could easily be a Renaissance - an intellectual renaissance - a golden age. Because with our technology and with adequate supplies of energy, we ought to have a lot of leisure. And the proper use of this leisure can bring us an intellectual renaissance, if we can get beyond the old 'if you don't work you don't eat' business.

"We now have an exponential growth culture that at the present time doesn't even know how to cope with a state of non-growth. But the cultural adjustments that must be made and can be made, could easily lead to a flowering of civilization whereby we would look at the mental state we're in now as The Dark Ages - culturally. .

"I'm not looking for culprits because we're all culprits. Every last one of us is doing things that shouldn't be done in a rational society because we haven't known any alternative.."

Dr. Hubbert stopped for a minute in deep thought, then he started talking again:

"We can only continue to use oil as long as it lasts. We should be looking for other sources of energy. There's only one that's big enough, it's free, and good for at least a billion years. That's the sun. We must move into solar energy.

"The technology exists today to convert solar energy directly to electricity. But you can't store it overnight and it's difficult to transmit over long distances without great losses.

"We can convert that electricity into chemical energy by the hydrolysis of water. You get oxygen which passes off into the atmosphere and hydrogen which you can then ship by pipeline to wherever it's needed. The only cheaper way to move a gas is by tanker. We can then burn the hydrogen locally at the power plant to generate electricity. The product of combustion is water, it's all ideal environmentally. Hydrogen is difficult to handle, but we learned how to handle natural gas, we can learn this.

"There's a Professor John O'Mara Bockris at Flinders University in South Australia,.a leader in electrochemistry, w~o has the whole thing worked out.

He just recently released this book, "Energy - The Solar-Hydrogen Alternative", I got my copy several months ago.

Dr. Hubbert paused, so I asked him a question, "How about the economists saying that if we let the price of gas and oil rise far enough we'll get all the gas and oil we want?"

"That is orthodox economic theory. It has no validity whatever when you apply it to a diminishing supply. No price on earth is going to create oil that isn't there. To make a statement like that requires no evidence or knowledge to make it.

"The idea of price elasticity can only be applied to a substance in abundant supply, not in diminishing supply. 

"Yes, we can improve our recovery factor of oil and gas, and we have been doing that very slowly. Progress comes hard now because we're already quite advanced in extracting oil and gas.

"The claim of being able to supply all the gas and oil we need if the price goes high enough is hokuspokus. The only thing it will accomplish for sure is to put hundreds of billions of dollars of extra money into the coffers of the industry for oil and gas already discovered, whether they produce any additional gas and oil or not. It's that kind of a poker game..


"It is my judgement that we could run the country better with almost certainly a third less energy than we're using now, by utilizing the technology that we now know how to use. The matter of energy waste implies that we could do the same as we're doing now with a lot less energy."

Dr. Hubbert stopped talking, I reached over and turned off the tape recorder. Nothing more needed to be said.


EPILOGUE: When I finally pushed the typewriter away it was 7 AM. I glanced out the basement window, it was light outside. I could hear Bernice come down the steps to the kitchen to prepare breakfast. Our Carol was still asleep.

I had worked all night in order to finish this editorial. After three years of preparation and research it was finally done. It would have been easier to write a book than to try to cut down all my material to fit this editorial.

Soon I'll be out on the freeway, part of the gas guzzling crowd. Our company switched to small economical cars a year ago, but today the big ones are selling like hot cakes again. America has forgotten all about The Energy Crisis and the Arab Oil Embargo. It's waste as usual.

I wonder about Dr. Hubbert. It's three years ago since he submitted that report to the Senate Committee. Nothing has happened. Nothing has changed. The National Academy of Science and the U.S. Geological Survey have both confirmed Hubbert's range of estimates. In effect, the Survey took away about two-thirds of our gas and oil (on paper).

The administration did nothing. Congress did nothing. .

Will we kill the messenger this time - or just ignore him? Is anybody out there listening? Well,
aside from that. . . 



REFERENCES:

1. S. David Freeman, Director of Energy Policy of the Ford Foundation: "A Time To Choose - America's Energy Future".

2. Hubbert, "U.S. Energy Reso.urces, A Review As Of 1972." Part I, A Background Paper prepared at the request of Henry M. Jackson, Chairman: Committee on Interior and Insular Affairs, United States Senate, June 1974.

3. The Milwaukee Journal, March 18, 1976, Federal Energy Administration story on Alaskan Pipeline oil.

4. Circular 725, United States Geological Survey, Miller, Thomsen, June 1975

5. Ralph Lapp, "The Chemical Century" from Science and Public Affairs (Bulletin of the Atomic Scientists, Vol XXIX, No 7, Sept. 1973

6. Nathaniel P. Reed, Ass't Sec'y of the Interior for Fish & Wildlife and Parks. from Readers Digest, Dec. 1974.

7. Stewart Udall, Charles Conconi, David Osterhout, "The Energy Balloon", 1974, McGraw Hill Book Co.

8. Hubbert, 9/3/76 interview in Washington, D.C.

9. Hubbert, 10th Commonwealth Mining & Metallugical Congress, 1974

10. National Academy of Science, "Mineral Resources and the Environment':, 1975

11. Circular 650, U.S. Geological Survey Theobald, Schweinfurth & Duncan, 1972 .

12. V.E. McKelvey, "Mineral Resource Estimates and Public Policy, 1972

13. Department of the Interior, U.S. Geological Survey, News Release, March 26, 1974

14. Hubbert, "Degree of Advancement of Petroleum Exploration in U.S.", 1967. American Association of Petroleum Geologists Bulletin

15. McKelvey and Duncan, Table I, 1965

16. Newsweek Magazine, August 16, 1976

17. The Milwaukee Journal, September 12, 1976

18. Hubbert, "Survey of World Energy Resources", Canadian Mining and Metallurgical Bulletin, July 1973

19. Circular 682, U.S. Geological Survey, Brobst, Pratt, McKelvey, 1973

20. Paul G. Hayes, Milwaukee Journal, Dec. 14, 1975

21. Milwaukee Journal, July 11, 1975

22. Ira H. Cram, Chairman, Coordinating Committee, National Petroleum Council and American Association of Petroleum Geologists, 1971

23. Hubbert, "Energy Resources" in "Resources and Man", National Academy of Science, 1969

24. The Milwaukee Journal, Jan. 26, 1975

25. The Milwaukee Journal, Aug. 29, 1976


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Fig. 1 The Hubbert Production Cycle Curve of an exhaustible resource, shown here for Crude Oil, as adapted by Howard L. Baumann of Fishing Facts Magazine, from Hubbert 1974 report to U.S. Senate Committee.2

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Fig. 2 Hubbert's 1956 prediction of future production of crude oil in the lower 48 United States and adjacent continental shelves. Adapted by Howard L Baumann of Fishing Facts Magazine, from Hubbert 1974 report to U.S. Senate Committee.2

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Fig. 3 - Estimates of ultimate total of crude oil to be produced from 48 United States and adjacent continental shelves. Prepared by Howard L. Baumann of Fishing Facts Magazine from data furnished by Hubbert.2

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Fig. 4 Comparison of complete cycles of U.S. crude oil production based on estimates of 150, 200, and 590 billion barrels ultimate total to be produced. Adapted by Howard L. Baumann of Fishing Facts Magazine from Hubbert 1974 report to Senate Committee 2

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Fig. 5 Average discoveries of crude oil per loot lor each 100 million leet d exploratory drilling in the U.S. 48 states and adjacent continental shelves. Adapted by Howard L. Baumann of Fishing Facts Magazine Irom Hubbert 1971 report to U.S. Senate Committee.2

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Fig.6 Estimation of ultimate total crude oil production for the U.S. 48 states and adjacent continental shelves; by comparing actual discovery rates of crude oil per foot of exploratory drilling against the cumulative total footage of exploratory drilling. A comparison is also shown with the U.S. Geol. Survey (Zapp Hypothesis) estimate. Adapted by Howard L. Baumann of Fishing Facts Magazine, from Hubbert 1974 report to U.S. Senate Committee2

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Fig.7 Complete cycle of crude oil production in U.S. 48 states and adjacent continental shelves as of 1971. Adapted by Howard L. Baumann of Fishing Facts Magazine, from Hubbert 1974 report to U.S. Senate Committee.2

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Flg.8 Comparison of predicted cycles of natural gas production for U.S. 48 states and adjacent continental shelves. based on estimates of 1961 for ultimate total production. as adapted by Howard L. Baumann of Fishing Facts Magazine. from Hubbert 1974 report to U,S. Senate Committee.2

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Fig.9 1972 estimate of complete cycle of natural gas production in U.S. 48 states and adjacent continental shelves. Adapted by Howard L. Baumann of Fishing Facts Magazine, from Hubbert 1974 report to U.S. Senate Committee. 2

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Fig.10 Estimation of ultimate total natural gas production for the U.S. 48 states and adjacent continental shelves; by comparing actual discovery rates of natural gas per foot of exploratory drilling against the cumulative total of exploratory drilling. A comparison is also shown with the U.S. Geol. Survey (Zapp hypothesis) estimate. Adapted by Howard L. Baumann of Fishing Facts Magazine from Hubbert 1974 report to U.S. Senate Committee 2


14 Comments:

Professor Anonymous Anonymous said...

A peak oil article from 1976? That's amazing foresight, and it's also very, very sad that people knew about this back then and basically for thirty years we've done nothing.

5:29 PM  
Professor Blogger Big Gav said...

Nice post WHT.

I'm in the process of writing a review of a widely read book on the oil industry that was published in the mid 1970's. It too discusses the Hubbert curve.

Unfortunately they concluded that oil depletion (they used 2000 as the peak date) won't be a problem as the economy will have shifted away from oil and onto hydrogen or suchlike by then...

Its like we suffered some sort of cultural lobotomy in the 1980's.

6:51 PM  
Professor Blogger Big Gav said...

Oh - and one more thing - this paragraph may be the key to what happened:

Each day seems to bring yet another proposal, but one certain proposal never stops coming through: LET THE PRICE GO UP AND WE'LL GET ALL THE OIL AND NATURAL GAS WE NEED. That one must be on a broken record because we hear it over and over again. It lends credence to a popular belief that the Energy Crisis was artificially created to line the pockets of the petroleum industry and the oil-producing nations.

Unfortunately that seems to be the truth of the 1970's "oil crisis" - it was deliberately engineered by the oil companies (with OPEC being an accomplice rather than the main villain) - there was no oil shortage during that time (be it physical or politically engineered). Globally we were still a long way off the peak oil point. It may be that the artificial oil crisis then has led people to discount any future oil crises as being conspiracies rather than reality - a case of "boy who cried wolf".

7:03 PM  
Professor Blogger monkeygrinder said...

Yeah, this was a real beauty. Thanks for getting out your digital quill pen and transcribing the article.

I think this is really just more solid evidence that Hubbert never really predicted the future, he just carefully observed the present.

That is why his "predictions" have borne out over time.

8:31 PM  
Professor Blogger Prof. Goose said...

WHT, that's some darned good (and prescient!) stuff. Putting up a link now.

9:16 AM  
Professor Blogger J said...

Well, I think we have done a lot of things since this article was written, at least within the oil industry.

W have accelerated production to levels unimagined back then using horizontal drilling and computer aligned wellbores. We can now deplete oil and gas fields in 1/2 the time or lees than it took in the 1970's.

We are drilling fewer wells because our 3D and 4D seismic analysis software allows us higher confidence in finding oil or gas, and greater confidence in placing each well perfectly, to accelerate production.

We now hit oil or gas 90% of the time. It may or may not be commercial in quantity, but we rarely drill a true "duster". Now they are simply "non-commercial" dusters...

We are combining secondary and primary reservoir recovery together. This means we inject water during the primary production cycle to "flush" all the usable oil out in the first run, maximizing production from deep offshore deposits. We do not need to go to "secondary" methods, as they are deployed initially. We deplete the reservoir completely in the first pass.

We have gone to "just-in-time" oil delivery. We have computer controlled shipping and scheduling. Oil no longer "sits" in holding tanks or offshore in tankers. Every drop is en route to a refinery or LNG port. There is no more inefficent "elasticity" in our supply system.

By incorporating future (yet-to-be-developed) technology into our reserve projections, we have increased traditional reserve estimates by almost 15% worldwide.

All of these are premier examples of oil companies thinking of our consumers and their need for more and cheaper oil.

I think my industry will continue to come up with similar technologies to insure we have enough oil for whatever the future may bring.

wink-wink

1:51 PM  
Professor Blogger Santos said...

You transcribed this!?

A tour de force... so we can throw this on the pile of books, articles, and documentaries written since 1970 pointing out the unsustainablity of industrial civilization.

Think of them, all those yards upon yards of learned and thoughtful books gathering dust on library shelves... they should have used celebrities instead.

8:32 PM  
Professor Blogger WHT said...

The miracles of a good OCR system.

7:38 PM  
Professor Anonymous left peakoil.com due to crap said...

LRT and PRT again

I have vacillated between suspicion of and potential support for Personal Rapid Transit. I can only say for sure that PRT acts as another wedge issue that splits the left and right into mixed factions of supporters and detractors (much like the wedge issue of "ethanol as a gasoline substitute").


personal RAPID transit.

Rapid is the sniggleing bit.

Walking is 4-5 MPH.
Biking 8-12 MPH
Biking w/electric assist 12-25 MPH
Horse 12-25 MPH
Car 12-65+ MPH


Yea, "we" are gonna have a hard time giving up cars. Look back at history however - the bicycle was listed as a reason Women could become 'liberated'.

Later, having a clothes washer was 'liberation' And now, on rare ads, GE lets you know how thier dish washers will liberate you.


Personal RAPID Transit will be hard to give up. And, you want the local Tennie boppers crusing or NOT crusing?

3:25 PM  
Professor Anonymous gener said...

Hi. Thanks for getting out your digital quill pen and transcribing the article.

1:57 AM  
Professor Anonymous usadrug said...

Hello. I think my industry will continue to come up with similar technologies to insure we have enough oil for whatever the future may bring.

1:58 AM  
Professor Blogger lopplolr said...

I think this is really just more solid evidence that Hubbert never really predicted the future, he just carefully observed the present.

4:28 PM  
Professor Blogger TonyS said...

Dr. M. King Hubbert is prominently featured in this long and detailed editorial about rx peak oil, published 33 years ago.

7:24 AM  
Professor Blogger ¬†¬†fuelcentral said...

Nice post and i fully agree that Hubbert never really predicted the future, he just carefully observed the present.

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10:36 PM  

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