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Page added on March 25, 2015

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Peak Oil, The Hubbert Theory In One Graph

Peak Oil, The Hubbert Theory In One Graph thumbnail

But, like global warming, the discussion on Peak Oil is closed.

And now there’s so much oil being produced, the oil industry is voluntarily cutting back production — because the price is too low.

Gasoline Prices Here And There, Then And Now

From the March 10, 2015, EIA report (a dynamic link):

U.S. average regular gasoline retail prices have increased for six consecutive weeks to $2.49/gal as of March 9, after falling to $2.04/gal on January 26, the lowest price in EIA’s weekly survey of Monday prices since April 6, 2009. Rising crude oil prices, along with several outages at refineries on the West Coast, have contributed to the recent increase in retail gasoline prices.

In February, monthly average regional gasoline retail prices ranged from a low of $1.96/gal in Petroleum Administration for Defense District (PADD) 4, the Rocky Mountain region, to a high of $2.55/gal in PADD 5 along the West Coast. EIA expects U.S. retail gasoline prices to average $2.26/gal during the first quarter of 2015 and $2.39/gal for the full year, $0.13/gal and $0.05/gal higher than in last month’s STEO, respectively.

Meanwhile, in California, self-proclaimed watchdogs are asserting that the industry is orchestrating the increase in gasoline prices in California. KION is reporting:

A consumer watchdog report says California oil refineries have about half as much gasoline on hand compared to the rest of the country. Tuesday a consumer advocate told a Senate committee the situation has lead to a spike in gasoline prices for Californians.
They say when refineries go down, gasoline prices go up.  And California is the worst case scenario.
The report further explains how Californians paid $47 billion extra, or $13 million per day more for gasoline compared to the rest of America over the last ten years.

Jamie Court, President of Consumer Watchdog says, “There is about an .84 difference in gas prices with the rest of America right now. Crude oil costs the same in California. This is really oil companies making big profits. The Senate committee agrees with our report that all of this extra money, the .84 per gallon is going right back into the pockets of the oil refinery and this committee is going to be discussing what can we do to change that.”

Court says his group and other advocates plan to urge the governor and the Legislature to require oil refiners to keep another week of gasoline inventory on hand to avoid gasoline price spikes in the third largest gasoline consuming economy in the world.
Court was asked what he’d do to change the status quo, ” First of all, we don’t have enough real time information. We did a report showing that over 10 years we’ve had about¬† 10.7 days worth of supply on hand in California compared to 18 in America. So we have always been behind in supplies. So we need real time data about when refineries go down and why. And we need information as to what days the supply is on hand, that’s transparency.”

In other news, California environmentalists want California refineries shut down. LOL. This suggests there may be a knowledge deficit for Jay Leno’s jaywalkers — it appears Jay Leno’s jaywalkers are not aware of what those big “things” do that sit between oil wells and service stations.

8 Comments on "Peak Oil, The Hubbert Theory In One Graph"

  1. Plantagenet on Wed, 25th Mar 2015 3:02 pm 

    Very interesting graph of US oil production. However, just because we are in an oil glut now doesn’t mean that the peak oil theory is dead. Eventually oil production will peak—there isn’t any doubt of that.


  2. GregT on Wed, 25th Mar 2015 3:16 pm 

    Even the graph above clearly shows the peak of US oil production. Peak conventional worldwide has already occurred. It is only a matter of time before the short lived, unaffordable, debt driven speculative bubble of unconventional oil production comes to an end.

    Those that get it, would be well served to take advantage of this bubble before it bursts. Last chance.

  3. Banjo on Wed, 25th Mar 2015 3:46 pm 

    LOL love the dreamers. Why even report reserves is unlimited thanks to economics

  4. i1 on Thu, 26th Mar 2015 6:17 am 

    postmortem priapism

  5. rockman on Thu, 26th Mar 2015 6:48 am 

    The graph is, in reality, an absolute lie. The graph shows US oil production from all sources. That is not Hubbert’s model. His statistic was based upon the existing oil trends in the US. It was those trends that he predicted would peak in the early 70’s and continue to decline into the future. Which is exactly what happened. Production from those trends has significantly fallen and represent much of our current stripper production. Hubbert actually makes a point of saying his model does not take into account production from trends yet to be developed.

    Time and time again those that want to deny PO misrepresent Hubbert’s prediction by mischaracterizing it. Lots of others have tried to extrapolate using his original model. Sometimes their models proved accurate and sometimes not. But in either case those results neither condemn nor support Hubbert’s work.

  6. Nony on Thu, 26th Mar 2015 5:01 pm 

    I read Hubbert’s 1956 paper. You are totally out to lunch, Rock. Hubbert specifically discussed possible improvements in technology (e.g. more secondary recovery) and made an allowance for it. Just too low of one. There were no big caveats about improvements in technology (and if there had been, what is the point of his estimate)? He also discusses a top down all the sedimentary basins of the planet approach.

    You have been called on this before and not responded. Just like when I called you on mistaking a MONTHLY Marcellus change for an annual one. I think you need some more Rockdoc spankings and too stop puffing yourself up because of adoration from blog commenters who are even less knowledgeable than you.

  7. kiwichick on Fri, 27th Mar 2015 4:36 pm 

    the first peak had a period of approximately 10 years at or above 9 million barrels per day

    then Alaska and GOM created a second peak, of again approx. 10 years above 8.5 million bpd

    current spike in production at approx. 8.5 million bpd, but well drilling is collapsing.

    next stop 6 milliom bpd?

  8. kiwichick on Fri, 27th Mar 2015 4:37 pm 

    the first peak had a period of approximately 10 years at or above 9 million barrels per day

    then Alaska and GOM created a second peak, of again approx. 10 years above 8.5 million bpd

    current spike in production at approx. 8.5 million bpd, but well drilling is collapsing.

    next stop 6 million bpd?

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