TOP: The Overshoot Point

The closer that global peak oil comes to fruition (if it hasn't occurred already), the more that sudden perturbations gain special significance. Every uptick or downtick in numbers will provoke analysts to episodes of bipolar hysteria. Unlike regional peak oil occurrences, where the oil companies can simply switch suppliers and thus ameliorate the effects of a local peak, we have no where else to go under a global peak oil regime. I believe it common knowledge among savvy oil depletion warriors that upward pressures on extraction rates can prolong the peak's occurrence by several years, serving to obscure the true peak either via a plateau or a wiggly roller-coaster.

In an earlier post, I tried to show how the world can delay the peak if extraction rates start to incrementally increase beyond an oil shock onset. Up to that point in time, extraction rates show a relatively constant value. Without further discoveries, a gradual increase remains the only way to maintain oil production at its current value (not to downplay the economically-driven increases required due to future demand pressures).

The following two hypothetical curves show production under two regimes. The more-or-less normal looking curve shows a clear peak under a constant extraction rate over time starting from day-one discovery. This makes the somewhat naive assumption that extraction rate remains at the mercy of technological limitations and that oil companies don't have a secret trick or two up their sleeve. The other, "flat-topped", curve comes about if the extraction rate starts to modulate upward right when we detect the peak. (The wolf at the door remains the vicious backside as we prolong the peak. i.e. No free lunch.)

For the plateaued peak, the extraction rate profile looks like the following inflected curve. Taken from the parameters of the generic oil shock model solver, we can plot:

This clearly shows that we may have a devil of a time designating when peak oil officially hits if the oil companies soon start to modulate extraction upwards. Right near the peak, we only need subtle upward changes to counteract the relentless downward pressure of oil depletion. Mathematically, this comes out of the wash any time we deal with a slope near zero, which occurs right at peak. However, in psychological terms, increasing the extraction rate through technical improvements or last gap measures will only confuse people that believe in the sanctity of the symmetric Hubbert curve.

To summarize, in a reality-based framework, peak does not have to occur when half the available oil gets used up, instead we really have to think in terms of a new metric to alleviate confusion.

I propose using the inflection point in extraction rate increase to more effectively describe when a pragmatic peak oil point hits us. I will refer to this as The Overshoot Point. Unfortunately, the overshoot only becomes apparent if you look at implicit values contained within a model. It will not show up in any explicit measures such as yearly oil production. A good model remains the only effective way to make sense out of this mess. Good old hand-waving, the opiate of the technically semi-literate masses and of Michael Lynch, just won't cut it any longer.

When we reach TOP, I will be the first to let you know.