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Page 16 of 67

Read online @ B A K K E N O I L B I Z . C O M / d i g i t a l - j o u r n a l 17 Serving the Natural Resource Community for Over a Century Crowley Fleck PLLP provides a strong, consistent presence throughout the region. While the legal profession has changed markedly since the firm's founding, our goal remains the same today as it was in 1895: to provide the highest quality legal service in a timely and cost-effective manner. BILLINGS, MT BOZEMAN, MT 406-252-3441 406-556-1430 BUTTE, MT HELENA, MT 406-533-6892 406-449-4165 KALISPELL, MT MISSOULA, MT 406-752-6644 406-523-3600 BISMARCK, ND WILLISTON, ND 701-223-6585 701-572-2200 CASPER, WY CHEYENNE, WY 307-265-2279 307-426-4100 SHERIDAN, WY 307-673-3000 OFFICES: WWW.CROWLEYFLECK.COM was too bold to make. Another wave of oil predictions occurred after World War I. In his book, The Prize, The Epic Quest for Oil, Money & Power, Yergin cites several. In 1919, David White, chief geologist with the United States Geological Survey said,"... the peak of production will soon be passed, possibly within 3 years. ... There are many well- informed geologists and engineers who believe that the peak in the production of natural petroleum in this country will be reached by 1921 and who present impressive evidence that it may come even before 1920." About the same time, Joseph Cullinan, a leading oil industry execu- tive, shared his views in a 1918 article for the Tractor and Gas Engine Review titled "Petroleum Consumption Enormous." He said, "There has been considerable discussion of late as to the possible length of time that the petroleum supply of the United States and the world will hold out. It is just possible, so far as the United States is con- cerned, that the development and the exhaustion of the supplies may occur within the course of one human life. It is certain that unless radical changes from present methods are applied promptly, all sources of supply within the range of known drilling methods will be exhausted during the life of your children and mine." He was right about the need for improving well management, but wrong about the life of oil reserves. The profusion of erroneous calls didn't stop others from taking a shot, though some tried to add credibility to their claims. One prog- nosticator attempted to develop a more precise method of spotting the point at which we'd run out of oil. Or, more accurately, when we would reach the maximum rate of oil production, after which output would begin to decline. HUBBERT'S PEAK No. It's not a mountain, but when graphed, it looks like one. In 1956, M. King Hubbert, a prominent geologist working for Shell Oil in Houston, created a model intended to give a warning about the arrival of the anticipated drop-off date in global oil output. Hub- bert's theory says the amount of oil in any region is finite-- a reason- able assumption. Therefore, after discovery, production will increase and rise toward a maximum. After reaching its peak, a decline will follow. That's reasonable thinking with respect to each well. However, it doesn't account for other variables. He didn't pluck numbers from thin air, instead, he used his model to back up his claims. Based on information available at the time, Hubbert estimated that the Earth's crust was holding reserves of about 1.25 trillion barrels. That was his first big mistake. At the same time, his model projected world oil production would peak at roughly 35 million barrels a day. That was his second mistake. He also said production would hit its maximum rate around the year 2000. Unfortunately for him, his confidence was unwarranted. He was wrong again. Three strikes. By 1967 global oil production had already soared past his production estimate. Moreover, output kept rising. Furthermore, it didn't peak in 2000. Instead, it kept heading higher, and in 2013 the global oil industry was pumping out 90 million barrels a day, more than two- and-a-half times the rate Hubbert had projected in 1956. ➤ continued ➤ continued from pg16

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