In the mid-1950s, geophysicist M. King Hubbert suggested that any nonrenewable resource would follow a two-phase life cycle—a rise from zero to a peak, followed by a symmetric decline to zero. This is the classic, bell-shaped production cycle. In 1962, Hubbert used his hypothesis to estimate that U.S. production would peak in less than a decade. When domestic production took a downturn after 1970, Hubbert’s views became the standard by which oil depletion issues were addressed. It soon became clear, however, that the simple logistic form proposed by Hubbert might be flawed. The declining side of the curve was not behaving symmetrically to the ascending side, apparently because the Hubbert methodology underestimated the post-peak quantity of oil.
Petroleum engineer Paul J. Taylor has devised an alternative methodology for understanding the depletion of the oil resource base. This methodology takes into account not only the physical aspects of an oil reservoir but also the consequences of economic, political, and technological developments. Taylor contends that history demonstrates that when demand exceeds supply, prices rise, technology improves, and production ceases to follow a Hubbert curve (see figure).
Alternative Oil Production Paths, 1850-2025
Source: P.J. Taylor, “Discussion of Modeling the U.S. Oil Industry: How Much Oil Is Left?” Journal of Petroleum Technology, paper SPE 52600 (May 1997).