It’s only April and we’re already back to $3 gas. Wonder what the rest of the summer will be like. The Lane County Transit District said ridership increased over 10% between March, 2005 and March, 2006. That reduces pressure on oil supplies and eases congestion on the roads. Economists insist that increased prices reduce demand. One might think so, but bus ridership and traffic on the road are increasing at the same time Which means that only the lowest economic segment is impacted yet and we have yet to find out what kind of price increases will reduce demand.

I don’t think I’ve discussed the Hubbert curve in detail on these pages. Back in 1956, Marion King Hubbert of Shell Oil published a prediction that U.S. petroleum production would rise to a peak in or shortly before 1970, and would steadily decrease after that date. The prediction was greeted with great hilarity. Hubbert didn’t know what he was talking about. Nobody on earth knew how much oil was under the dirt or where it was, so how on earth is anyone going to tell us when it’s going to begin to run dry? Hubbert was right on the money. There are people still trying to laugh at Hubbert (usually economists or their acolytes) , but it ain’t no chorus anymore.

A young fella came to work for Shell Oil. He knew Hubbert and vice versa. The guy’s name was Kenneth Deffeyes, whose papa was a petroleum geologist and that’s what little Kenny decided to be. Little Kenny grew up to be one smart cookie. He not only understood the methodology used by Hubbert in his prediction, but improved upon it in terms of reducing Hubbert’s difficult and complex mathematics into a simple algebraic formula. After he left Shell Oil as a result of a dispute with the company, he became a professor and taught young folks how to do what he’d done for a living. He learned to use language accurately, simply, and convincingly. He was turning the indolent louts sent him into scientists. His lectures work very nicely for me too. Very clear and easy to understand.

He taught a while at Oregon State where he labored in the Oceanographic Department. I would suppose he was one of those examining the prospects of mining methane hydrates from the deep waters off the Oregon coast, once thought to be a rich and possible source of methane (natural gas), but apparently on closer inspection not as rich a potential source as previously supposed.

Deffeyes moved on, ultimately winding up at Princeton. He has published a recent book, “Beyond Oil: The View From Hubbert’s Peak” It’s a beautiful little book, in that it deals splendidly with an overview of the present situation and what may lie before us – other than ever increasing prices. In Chapter Two he explains how oil was formed in the first place – not quite as I had thought. And he tells you exactly what you need to find if you want to find oil.

Chapter Three explains Hubbert’s curve – and I mean explain it so you can easily, if you have access to the data contained in the Oil and Gas Journal, run your own calculations. In this town O&GJ is available at UO. More about that data in a moment; as for Deffeyes formula I could understand it myself, which ain’t bad for a mathematically challenged person.

P = a(1 - Q/Q1)Q (In graphed form the results of applying the formula result in the Hubbert Curve.)

P=Annual Production
a=0.0536 (derived in a manner about to be described)
Q=Cumulative to date (From annual production figures plucked out of O&GJ)
Q1=Total recoverable petroleum(when the world runs dry. – determined by Deffeyes calculations to be when 228.4 trillion barrels will have been produced..)

Let’s go to work on that. We start with good data. We’ll use annual oil production figures from the Oil and Gas Journal, available in university libraries if not your city library.

Are those figures reliable? I’ve pointed out that figures given for proven oil reserves are not – what’s the difference? For oil reserves, you must rely on what corporations tell you – and if you think corporations always tell the truth, the whole truth and nothing but the truth, you and Ken Lay are made for each other. A second factor is government. A corporation may decide that if they cheated a bit on their reserves it might help stock prices and consequently the executives sitting on stock options. If you’re a government, you might want to make yourself important enough to be listened to. Now that push has come to shove reported reserves are declining precipitously.

Oil that’s pumped to the surface is an entirely different situation. I’ve got a refinery. I need sixteen million barrels. I go the oil market and make a deal for that amount of Nigerian crude. At the pump head they deliver sixteen million barrels to the pipe line operators. A tanker waits at the other end to receive sixteen million barrels, and they expect to get it. It’s hauled across the Atlantic to dock at maybe Shreveport. Then into another pipeline up to my refinery. Each step is under contract to deal with 16 million gallons and each step better see those gallons.. All along the way there is intense interest on the part of many, many people and agencies in that oil. You couldn’t possibly make that oil a secret, or let any part of it disappear without creating a major disturbance. O&GJ gets the figures, compiles them and prints them I can’t think of a good reason to distrust them..

Okay. To see for ourselves how the Hubbert curve works, we’ll take each year of production (P)and divide that quantity by all the petroleum that has ever been produced up to that time (Q). We arrange the dots representing that number on a sheet of graph paper, annual production on the vertical scale, cumulative production on the horizontal scale. Whadya know, after some early jiggling around those dots arrange themselves into a pattern – which is ‘a’. (The first year is necessarily 1.00; it gradually falls to a stable value of 0.0536 for U.S. production).

Patterns are precisely what any scientist wants to find – they are the soul of science. If you draw the straight line that corresponds to those later dots, you have just accepted Hubbert’s curve.. Where the straight line you’ve drawn meets the horizontal axis will establish the absolute total, Q1. (When production has fallen to zero it means that’s all there is, folks.).

One more assumption is involved in all this. It involves Ockham’s Razor. William of Ockham was a 14th century English philosopher who postulated “An explanation involving fewer assumptions than an alternative explanation is preferable to the alternative.” In barnyard terms, if it walks like a duck, sounds like a duck and looks like a duck it probably is a duck. Don’t listen to that salesman trying to tell you it’s going to grow up to be a swan. Or consider the hero presented with the Gordian knot and an opportunity to figure out how to undo the knot and win the prize. Our hero, one Alexander of Macedon, pulled out his sword, whacked the knot in two and said “Anything else you want?” His prize was Asia.

Ockham’s Razor is another key element in science. Any scientist going to work in the morning hopes to spot a pattern that day. If he recognizes a pattern (the simplest possible explanation) and if he can express it mathematically, he’ll start testing his theory. If it keeps passing the test you’ve got publishable theory with attendant fame, stardom, and contumely. It means our scientist has made something predictable and that’s what scientists are supposed to do. With the gift of predication new industries can be developed, and all our lives might be enriched. Subsequent generations may refine the theory, almost certainly will, but you’re it’s daddy. (In this case, lady, you can be a papa too..)

Okay. That’s how petroleum geologist M. King Hubbert, and his protege Kenneth Deffeyes know how to measure petroleum without knowing things as yet unknown.

Graphed, the Hubbert curve is a bell shaped curve. Actual production figures lie remarkably close to the theoretical curve on the historical section of the curve, which is everything up to now. All the vicissitudes of political, military and economic conflict in the last half of the 20th century are not apparent when annual production is graphed — almost, that is. The only significant departure from the pretty doggone smooth curve began in 1985. The Soviet Union, at that time, exported three times as much oil as Saudi Arabia. The Soviet Union desperately needed hard currencies to support the economy of the Soviet Union, used oil to get the currencies, and something got the Saudi ticked off – maybe Washington set them up to it, I don’t know. Anyway, production costs are much higher in the Soviet Union than Saudi Arabia, which has the cheapest production costs that can be found anywhere on earth. The Saudi cut their prices way, way down and flooded the market. You may remember those days. Convinced us we ought to get trade the Camry for a Super-SUV, maybe even a Hummer. Morning in America time.

The Soviet Union lost its source of hard currency and collapsed. Deffeyes said you might have thought it was Star Wars or Gorbachev being a softie or something of the sort, didn’t you? In any case, that incident was the only bump significantly deviating from the theoretical values determined by Hubbert’s (or Deffeyes) formula..

The rest of the book looks at alternate fuel sources. That was the scariest part. Everything but renewable resources and to some extent perhaps nuclear energy, involved a heavy infusion of fossil fuel. Most significantly, so very, very much depends on massive infusions of cheap methane. That’s how Canada’s oil sands are brought into production. That’s the preferred method of producing hydrogen – you heat methane and mix with oxygen (very, very carefully) to get hydrogen and carbon dioxide. Ammonium sulfate (fertilizer – a nitrogen source for growing plants) is manufactured by a quite similar process. That’s the scariest part. given our inability to find new resources to answer the demand for natural gas and the consequent great surge in pricing. Coal gasification and liquidization – I don’t recall the production details. I do most certainly remember what is said about the process. The much vaunted use of liquidized coal by South Africa created a pollution cloud readily identifiable from outer space – the only such source in Africa. If you think for a moment about the carbon dioxide loading of the atmosphere that would happen, it’s enough to give you to the Willies. I sound skeptical about alternate fuel sources, but that’s my bias, not Deffeyes. If anything, he seems rather hopeful about it.

I can most readily recommend a reading of Deffeyes. Other than getting hung up on trying to understand his formulae, which really wasn’t all that bad, the book reads very quickly and he has a lot of good stuff to say. Apart from being sometimes scary, it was a distinct pleasure to read something that well written. If you found anything interesting in this brief report, for heaven’s sakes go to the source and read the book. Don’t settle for my maundering.

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