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Peak Oil Predictions are Fickle

peak oil prediction
 
In a case of who wuddathunkit, it appears we’ve been incorrectly predicting peak oil for more than a century. I say this because many traders and forecasters were caught by surprise when oil and gas prices simply veered off track in mid-2014, especially when for four years oil prices were at an all-time high and didn’t seem to slow down.
 
But according to the Energy Information Administration, the per-barrel price of U.S. grade crude oil dropped 42 per cent in 2014 from a high of $107.95 in June to $63.13 a couple of weeks ago.
 
Plus, in 2013 many oil analysts, like Chris Nelder, an energy analyst, expected prices to rise and sit more solidly in 2014, with a few possible spikes over $125.
 
But other analysts, like Bill Conerly, a contributing writer for Forbes, predicted that oil prices would see a decrease in 2014. Conerly wrote that oil prices will decline to at least $80 a barrel or more.
 
So as you can see, these two different predictions from two industry experts got me thinking about peak oil predictions since 1901 when the first commercial well capable of mass production was drilled at Spindletop in Texas.
 
And for much of the 20th century, communities were so dependent on oil, many oil analysts in the early 1900s would predict that we would eventually run out of oil in 20-50 years.
 
One such example were the residents of Tulsa, Oklahoma. Many residents buried a car in 1957 as a time capsule. In the car capsule they included containers of gasoline because they believed that 50 years later in 2007 there will not be any gas left to get the car running again. Obviously, they were wrong.
 
So, what were some oil predictions from the past century that didn’t quite pan out? Let’s take a look.
 
Oil and Gas Will Eventually be Exhausted (1909)
 
From the Titusville Herald in Pennsylvania, an article predicted that all petroleum and iron would be exhausted by 1939 and all natural gas by 1934.
 
Surprisingly and uncanny, it was noted that technological advancements would be able to stop this energy meltdown.
 
US Oil Supplies May Last 15 Years (1937)
 
From the Brooklyn Daily Eagle, a small snippet mentioned that the oil supply for the US will run out in 15 years.
 
“We always underestimate because of the possibility of discovering new oil fields. The best information is that the present supply will last only 15 years. That is a conservative estimate,” said Capt. H. A. Stuart, director of naval petroleum reserved.
 
US Oil Depleted in 20 years (1972)
 
From the Bulletin of the Atomic Scientists, 1972, it was suggested that US oil supplies will last only 20 years. However, foreign supplies will last 40 to 50 years, but are increasingly dependent upon world politics.
 
Sometime between 2007 and 2040, oil production will peak
 
Around 2007, experts predicted this wide range due to uncertain factors that included:

  • amount of oil still in the ground
  • how much oil can ultimately be produced given technological, cost and environmental challenges, political interest, and investments.

So, what do all these predictions tell me? Well, it appears that we’re simply waiting for the end of oil, no matter how long it takes. However, improved technology has allowed us to gain energy independence and experiment with alternative energy forms, which could stop the energy meltdown like the Titusville Herald predicted.
 

Carol Carol Liu
Carol Liu is a Marketing Manager of Castagra Products, a storage tank and wastewater coatings manufacturing company that is highly acclaimed for its sustainable coatings, cold weather tank and secondary containment coating applications, and its durable frac tank coatings. Castagra is used by the world’s top oil and gas field services companies.