There is much confusion about the concept of peak oil. The term peak oil was derived from the Hubbert peak theory. M. King Hubbert, an American geophysicist, proposed the theory in a paper presented at a meeting of the American Petroleum Institute in 1956. He factored in the world’s proven reserves and his best guess at future discoveries. Using this information he determined that
The definition of peak oil is the point in time when an oil reservoir can no longer produce as much as it did the prior day. Every petroleum geologist and engineer is intimately familiar with the principle of decline. An oil horizon never makes as much the second month as it did the first. To understand this principle, imagine an above-ground swimming pool filled with water.
The swimming pool holds a finite amount of water, say 1,000 gallons. The walls of the pool trap the water and keep it contained. At least until you open the drain. When the pool’s drain is opened, water flows out on the ground until the pool is empty. Oil reservoirs are also finite pools – in this case oil instead of water – trapped because of various structural and stratigraphic reasons. When these zones are perforated and treated – the same as opening the drain in a pool – the oil flows or is pumped to the surface until, like the pool with an opened drain, the reservoir is empty. This is called depletion.
There are no great open caverns filled with oil in the subsurface. Oil, gas and water are trapped in tiny pore spaces, sometimes smaller than a pinhead, or fractures found in the rock. As anyone that has studied a road cut knows, rock formations are anything but homogeneous. They change from foot to foot. Because of the tiny pores and non-homogeneity of the rock in which oil is trapped, it is extremely difficult to predict how much is present. Moreover, it is even harder when you consider that as much as 1/3 of all the oil in place is unrecoverable because of such things as surface tension, gravity, etc.
Petroleum geologists and engineers have found another way to predict how much recoverable oil an oil horizon contains. They plot decline curves. A oil well starts to decline almost immediately after it begins production. It isn’t a straight line decline but rather a hyperbolic curve. This means that the greatest decline occurs during the first few months or, in the case of more long-lived reservoirs, a few years. After that the curve flattens and may continue with little perceptible decline for many years. Still, with enough well information, it is possible to accurately predict how much an individual oil horizon will ultimately produce.
One thing is certain, all oil horizons eventually deplete — even those in
These containers held 500 gallons or so of water. If you opened up their spigot they might take an hour to drain. If you drained the same container with a hole the size of a pin it might take a month to drain. The same is true of an oil reservoir. One well would never drain most reservoirs. A thousand wells could do the job and do it much faster. Well, you get the picture.
The reservoir beneath
Say a horizon begins producing 100 barrels of fluid per day at a ratio of 98% oil and 2% salt water. After a year the ratio has changed. Now the horizon is producing less oil and more salt water. The zone, possibly, is now producing 75 barrels of oil and 25 barrels of salt water. This decline in oil and increase in salt water will continue until an oil horizon is producing little more than salt water. In
Peak oil theory is based on mathematics and is very real. If you don’t believe it, consider this: oil production peaked in
World oil production has either peaked or is close to it. One thing is certain – world demand for oil is far from peaking. From this point on, oil will become increasingly harder and more expensive to find. Supply will decrease and demand will increase. At least until another viable form of energy is found. That’s a fact and not speculation.