Do you think oil is being depleted? If so, you are one of the 76 percent of Americans who answered in 2008 that they believed the world was running out of oil . This belief is in line with Hubbert peak theory, according to which “the rate of production of any particular fossil fuel follows a bell-shaped curve with time (Andrews and Jelley, 2013, Energy Science)”. The theory seemed to be accurate especially in the 1970’s, when the scarcity of crude was highlighted with a series of oil shock events. The rate of oil production was thought to be heading toward a peak; by 1970, global oil production rose to 48 million barrels a day (mbd), a nearly five-fold increase from 10 mbd in 1950. However, as demonstrated in the figure , the historical data became increasingly inconsistent with Hubbert’s prediction as time goes by, particularly since the 2000’s.
Why does the actual curve not decline after reaching a peak? Indeed, U.S. oil production began to rise from five mbd in 2008, to 8.3 mbd in early 2014. Overall, it increased by approximately 80 percent since 2006—as a result, the world has experienced a baffling oil price decrease in the past few years. The upward trend owes to two major factors; new reserves being unlocked and technological advances such as more sophisticated extraction methods. Not only did unconventional sources like shale oil emerge, but energy companies began to combine “hydraulic fracturing and horizontal drilling to wring oil out of super-tight rock formations in North America .”
Now, while supporters still think the current inconsistency is a respite, many consider Hubbert’s theory somewhat outdated. Petroleum economists say that what matters is the economic and technological limitations, not the physical constraints. In particular, according to late petroleum economist Morris Adelman, oil will not get exhausted because “if and when the cost of finding and extraction goes above the price consumers are willing to pay, the industry will begin to disappear .” Others say the peak theory was partly supported by psychological factors regarding scarcity; oil analyst Blake Clayton says in his book “Market Madness: A century of oil panics, crises, and crashes” that the bell-shaped curve was plausible because “no one at the time can see where more oil would come from .” Considering these valid arguments, however, it is undeniable that the theory correctly reflects the finite nature of oil. Even if Hubbert admits his defeat, the need for transition toward cleaner fuels persists.
 image source: the Economist
 Morris Adelman, 1995, The Genie out of the Bottle: World Oil Since 1970