Development of Hubbert's Peak Oil Theory and Analysis of Its
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Development of Hubbert’s Peak Oil Theory and Analysis of its Continued Validity for U.S. Crude Oil Production Torren Peebles Professor Jay Ague & Professor Michael Oristaglio 5 May, 2017 A Senior Essay presented to the faculty of the Department of Geology and Geophysics, Yale University, in partial fulfillment of the Bachelor's Degree. In presenting this essay in partial fulfillment of the Bachelor’s Degree from the Department of Geology and Geophysics, Yale University, I agree that the department may make copies or post it on the departmental website so that others may better understand the undergraduate research of the department. I further agree that extensive copying of this thesis is allowable only for scholarly purposes. It is understood, however, that any copying or publication of this thesis for commercial purposes or financial gain is not allowed without my written consent. Torren Peebles, 5 May, 2017 ABSTRACT In this paper we review the development of M. King Hubbert’s basic petroleum resource depletion model, the Hubbert curve, that became the foundation for the variety of curve fitting techniques that are still widely used today. We then draw on current literature to assess the strengths and weaknesses of such models, before assessing their validity for continued use in the United States and analyzing whether or not U.S. crude oil production still follows the curve that Hubbert gained infamy for. Specifically, we focus on the impact that advances in petroleum production technology such as hydraulic fracturing and Enhanced Oil Recovery (EOR) techniques have had on the U.S. production cycle and test derivations of Hubbert’s original model that might better approximate the impacts these advances have had. Our results demonstrate that while curve-fitting techniques remain useful, the original Hubbert curve no longer approximates the U.S. production cycle well. M. KING HUBBERT & PEAK OIL THEORY (1956) A Texas native, Marion King Hubbert obtained his B.S. from the University of Chicago in geology and physics with a mathematics minor in 1926 (Narvaez, 1989). He would continue his graduate work in the University’s Department of Geology, at the time renowned as one of the nation’s best, earning his M.S. in 1928, working on a theoretical study of thermodynamic processes contributing to geologic faults (Narvaez, 1989). Hubbert garnered applied geophysics experience working as an assistant geologist for the Amerada Petroleum Corporation (Narvaez, 1989). After briefly returning to the University of Chicago to pursue his Ph. D. and work as a teaching assistant, Hubbert went on to accept a faculty position at Columbia University in 1931 where he taught geophysics and completed his Ph. D. in 1937. Although colloquially best known for his theorization on peak oil, it was during this period that Hubbert published his seminal paper Theory of Ground Water Motion, demonstrating that groundwater flow is determined by both gravity and fluid pressure. The paper provided a physical interpretation of Darcy’s Law using a new derivation of the Navier-Stokes equation. Previously thought to remain static in their reservoirs, the publication drastically influenced thinking on how gaseous and 1 liquid hydrocarbons were transported through porous media (Priest, 2014). During World War II, after leaving his position at Columbia in 1941, Hubbert served as a senior analyst for the United States Board of Economic Warfare (Narvaez, 1989). As chief of the Board’s Mineral Resources unit, Hubbert oversaw analysis of the Allied war effort’s global natural resources, one the most critical of being petroleum (Priest, 2014). World War I was vital to establishing, advancing and standardizing the science of estimating petroleum reserves and resources. The advent of motorized warfare shifted the view of petroleum as a commodity supplied by a small group of entrepreneurial prospectors to a national resource fundamental to victory in modern war (for perspective; when Britain entered World War I in 1914 their military possessed only 800 motor vehicles, four years later at the war’s end, they had 56,000 trucks and 36,000 cars (ELC, 2015). In 1916 the United States Geological Survey (USGS) established their Oil & Gas Section. The Section applied methods such as depletion curves to track production and reserves remaining in known fields, and used their data to aid the U.S. military in planning the war effort and also advise the U.S. government on applying taxes to petroleum production (Priest, 2014). Throughout this time period and through the mid 1940s, the United States accounted for roughly 65% of world petroleum production (ELC, 2015). Necessarily, the first attempts at quantifying the nation’s reserves, resources and production rates arose from these analyses. In 1919 the USGS Oil & Gas Section estimated domestic petroleum reserves to be 6.74 billion barrels (Priest, 2014). Chief geologist and head of the Oil & Gas Section David White estimated the supply would last the country 17-18 years extrapolating from current consumption rates (Priest, 2014). A revised estimate of U.S. petroleum resources, this time including new production from fields in California, was issued in tandem with the American Association of Petroleum Geologists (AAPG) in 1921 (Priest, 2014). Without seismic imaging technology that arose in the mid 1920s, accurate assessment of the nation’s oil fields was near impossible, and these early estimates of domestic resources and peak production proved wildly low. 2 Following his work for the Board of Economic Warfare, Hubbert was employed as a research geophysicist by Shell Petroleum Company from 1943 until 1964, and it was during this time period that he presented his early work on peak oil (Narvaez, 1989). In 1949 Hubbert presented his Energy from Fossil Fuels as part of the Symposium on Sources of Energy in Washington D.C., examining annual world production over time for both coal and petroleum. It is in this preliminary paper that we observe several aspects of what would lead to the infamous Hubbert curve and his predictions regarding peak oil. Hubbert’s 1949 work focused on the rate of increase of production of both coal and petroleum (neglecting natural gas for want of world production statistics), noting that annual production of coal since 1913 had grown geometrically at a rate of 4% per year since 1913 (implying that annual production doubled every 17 years), while from 1860 to 1929 world crude oil production had grown geometrically at a rate of 9% a year (implying that annual production doubled every 7.5 years)(Hubbert, 1949). Pairing these observations with what he deemed “one of the most disturbing ecological influences of recent millennia” that was “the human species proclivity for the capture of energy, resulting in a progressive increase in human population.” (Hubbert, 1949). Hubbert surmised that that the amount of any fossil fuel consumed at any given time would be proportional to the area underneath a curve similar to those which he had presented, concluding: Thus we may announce with certainty that the production curve of any given species of fossil fuel will rise, pass through one or several maxima, and then decline asymptotically to zero. Hence, whole there is an infinity of different shapes that such a curve may have, they all have this in common: that the area under each must be equal to or less than the amount initially present. (Hubbert, 1949) Hubbert would wait another 7 years to speculate on what this curve might look like, although he would continue the paper by ominously discussing hydropower’s ability to meet current energy demand and human existence on an absolute time scale. 3 In 1956, M. King Hubbert presented Nuclear Energy and the Fossil Fuels before the Spring Meeting of the Southern District Division of Production of the American Petroleum Institute (API). Using petroleum production data from the world, the continental United States (U.S. L48) and Texas, Hubbert created graphs for each in the same manner as he had done in his 1949 publication, plotting rate of production over time. While initial rates of production initially increased quite rapidly, as had observed for both coal and crude oil in 1949, he noted that this production growth was quite obviously unsustainable in that physical limits prevented production of a finite resource from behaving as such so over any prolonged period (Hubbert, 1956). To more effectively extrapolate growth curves for his observed data sets, Hubbert concluded that petroleum depletion could be modeled as function of cumulative production under the premises that: (1) For any production curve of a finite resource of fixed amount, two pointa on the curve are known at the outset, namely that at t = 0 and again at t = ∞. The production rate will be zero when the reference time is zero, and the rate will again be zero when the resource is exhausted. (2) The second consideration arises from the fundamental theorem of the integral calculus; namely, if there exists a single valued function y = f(x), then !! ��� = � ! where A is the area between the curve y = f(x) and the x-axis from the origin out to the distance is x1. In the case of the production curve plotted against the time on an arithmetical scale, we have as the ordinate � = ��/�� where dQ is the quantity of the resource produced in time dt. Likewise, from equation (1) the area under the curve up to any time t is given by ! ! �� � = ��� = �� = � ! ! �� 4 where Q is the cumulative production up to the time t. Likewise, the ultimate production will be given by ! �!"# = ��� ! and will be represented on the graph of production-versus-time as the total area beneath the curve. (Hubbert, 1956) The graphical representation of these basic relationships manifested itself in the form of a bell-shaped curve that Hubbert did not define mathematically in his 1956 publication.