I Am So Tired of Malthus

The following was written originally in 2001, and updated a bit in 2004. If I updated it today I would simply emphasize that rather than a clear peak we are on a bumpy plateau since late 2004, and will start the terminal decline about 2012/2013, and would discuss Ghwar and MRC wells in some detail.
“There is a phenomenon, well known in the oil industry but little publicized, that when an oil field has been about 50% depleted, production begins an irreversible decline. In the mid 1950s, a petroleum geologist named M. King Hubbert applied this concept to an analysis of the lower 48 states, and predicted a decline of production starting about 1970. He was derided at the time, but lower 48 USA oil production has been in decline since 1970. The phenomenon has been named the Hubbert Peak, and the production growth and decline curve is often referred to as a Hubbert Curve.
In 1998, using the best petroleum industry database available, two petroleum engineers (Campbell and Laherrere) applied a Hubbert analysis to the entire world, and predicted a peak between 2000 and 2010. Refined analyses since then focus on 2005 to 2010. In fact, due to economic and political factors, there is more likely to be an irregular plateau, with possibly several small peaks before the decline, but a decline by 2010 seems inevitable. There is a great deal of real data to support such a view and little but untenable optimism to support alternative views. “In God we trust, others please bring data!”
Almost all known world oil provinces are now in or very near decline. The major exceptions are the Middle East and the Caspian region. The Middle East can still increase output, but not enough to fully offset rest-of-world decline beyond 2010. The Middle East will also be in decline before 2020. The Caspian reserves are only a little more than one year’s world oil consumption, so will not long delay a peak.
The petroleum industry employs a complex, inconsistently-applied terminology referring to resources, reserves, oil in place, estimated ultimately recoverable, etc., and there are no standardized and regulated reporting rules or controlled reporting agency. Therefore only careful analyses of database trends over time, by industry experts (geologists, not corporate heads) can produce a reasonably reliable picture. Such analyses tell us that the world’s original endowment of recoverable petroleum liquids (conventional petroleum plus natural gas liquids), is between 1800 and 2,300 Gb. About 900 Gb have already been used, leaving (optimistically) 250 to the Hubbert Peak. At present consumption rates, that is less than 10 years, and consumption is growing. (It could be quite less!)
We know that Middle East reported reserves grew by about 280Gb between 1987 and 1990, with little additional exploration, and remained constant during the 1990s in spite of continuous production. It is more likely that reserves are overstated than understated. Middle East reported reserves seem to have been influenced by OPEC quotas.
Recoverable oil is relatively rare in the earth’s crust and lies in now well-understood geologic formations. The entire world has been mapped by satellite and promising areas have been surveyed. Hopeful areas have been seismically explored and the best have been drilled. Oil is distributed fractally along a curve of declining field size versus increasing field occurrence. There are very few super giants, (and only one Ghawar, the most super giant) a few more giants, more majors, etc. down to many, many insignificant fields. Because they are the easiest to detect, the big ones are found first, and they have been found. There are about 41,000 known oil fields worldwide, of which about 21,000 are termed very small to insignificant. The probability that we have found so many small fields, and overlooked any more big ones is near zero.
Oil discovery peaked about 1963. During the decade from 1958 to 1968, discovery averaged about 42 Gb per year, mainly due to the Middle East. More than 70% of the world’s oil was discovered more than 30 years ago. Discovery averaged about 6 Gb per year during the 1990s, (about ¼ of consumption) and discovery per exploration dollar has been in decline for decades. Reserves growth peaked in the late 1980s with the development of new tools like 3D imaging, digital analysis, and horizontal drilling, as well as political issues like OPEC quotas. In the 1990s discovery averaged about 25% of production, and discovery plus real reserve growth may have been 35% of production.
World discovery has been in decline for nearly 40 years, and discovery plus reserve growth for at least 10 years. Now total reserves are also in decline. At some point, production must also begin to decline, and that point is soon.
The USA consumes about 25% of world oil production and imports about 55% of consumption. With growing demand from developing countries and exploding populations in OPEC countries, we will not be able to maintain our present share of world oil, short of occupying the Middle East. When world availability begins to decline, our availability will decline faster. What happens when, about six years from now, a 1%-2% annual increase in demand encounters a 3%-4% annual decrease in supply?”

One big problem with food supply has historically been plagues that used to destroy up to 80% of food production. A fast example was the Irish starvation in the mid 1800 when the blight affected potato crops. Today it is unthinkable another event like that due to advances in fungicides and other pesticides.
But crops are subject to rot and decomposing during storage and transport that can spoil up 60% of production. The only fumigant effective and cheap enough to prevent this has been bromide dimethyl that gets rid of pests. But it has been targeted as an ozone depletion substance and will be banned from use worldwide. We know that the world population reduction lobby was behind the ozone scare (and scam), as it is behind the banning of most useful products, processes and techniques related to agriculture, as pesticides and herbicides, GMO, irrigation, construction of new dams, etc.
As for soil fertility loss, Argentina and Brazil have been using the tilling method of “surface seeding”, abandoning the traditional deep tilling that involves lots of work, lots of fuel use and double pass of machinery. We are presently planting the seed in just one pass with a very shallow removal of the soil (about 2 inches). This prevents wind and water erosion by a big deal.
The use of nitrogen fertilizers is not very much extended because of its cost in grain crops, but there are people who use it for expensive crops, especially in “greenhouse farms” producing vegetables. Another great improvement in yields has been the introduction of satellite technologies, where machinery equipped with GPS and computer programs takes the job from human operators and do the job automatically.
That way, Argentina and Brazil have increased their grain yield and production almost 3X while reducing costs. Actually, the Horse Power input to agriculture has been steadily reduced since the early 70s. But Argentina could produce even more grains, meat, and other foods –only if we had a government that stopped fighting and looting farmers and cattle ranchers. We are the only country that taxes exports up to 50% of the gross crop value while the EU subsidizes agriculture and meat production!