136 PETROLEUM TECHNOLOGY, ECONOMICS, AND POLITICS
It is assumed with some degree of justification that the extraction of
oil, like that of other nonrenewable resources, will follow a parabolic
(bell-shaped) curve over time and the only unknown is the characteristics of the slope on the depletion side of the curve.
Crude oil is no different than many other natural resources insofar as production rises quickly at first and then gradually slows until
approximately half the original supply has been exhausted; at that
point, a peak in sustainable output is attained and production begins
an irreversible decline until it becomes too expensive to recover the
remaining in-ground material. In accordance with Hubbert's postulate, many scientists and engineers believe that the midway point in
the depletion of the original world petroleum inheritance has been
reached and severe depletion of the resource is already underway.
On the other hand, there are opposing claims to the effect that the
peak of oil production is still a year or maybe decades away, and the
world has not yet reached the depletion side of the bell curve.
However, it is certain that the reserves of crude oil are being
depleted and the discovery of new fields has slowed. In fact, many
scientists and engineers conjecture that new giant oil reservoirs are
waiting to be discovered while the opposing view that there are
no new giant oil reservoirs holds at least equal weight. If this latter
opinion is the case, as the world sinks into crude oil oblivion, it is
worth considering the phenomenon of the petroleum culture since
this has a high influence on petroleum economics.
In part, many ancient cultures collapsed because of their inability to maintain important resources that allowed society to flourish
(Tainter, 1988). Indeed, the development of the modern world
focused and became heavily dependent on the recovery and use
of petroleum. As of late, this has taken a serious turnabout because
some of the most promising new oil discoveries have turned out
to be very disappointing in terms of the amount of the resources
contained in these fields (Cooper and Pope, 1998).
The economics of a petroleum-based culture involves energy
resources and energy commodities, including:
1. Forces motivating firms and consumers to supply,
convert, transport, use energy resources, and to dispose of residuals
2. Market structure and regulatory structures
3. Distributional and environmental consequences; economically efficient use.
It is assumed with some degree of justification that the extraction of
oil, like that of other nonrenewable resources, will follow a parabolic
(bell-shaped) curve over time and the only unknown is the characteristics of the slope on the depletion side of the curve.
Crude oil is no different than many other natural resources insofar as production rises quickly at first and then gradually slows until
approximately half the original supply has been exhausted; at that
point, a peak in sustainable output is attained and production begins
an irreversible decline until it becomes too expensive to recover the
remaining in-ground material. In accordance with Hubbert's postulate, many scientists and engineers believe that the midway point in
the depletion of the original world petroleum inheritance has been
reached and severe depletion of the resource is already underway.
On the other hand, there are opposing claims to the effect that the
peak of oil production is still a year or maybe decades away, and the
world has not yet reached the depletion side of the bell curve.
However, it is certain that the reserves of crude oil are being
depleted and the discovery of new fields has slowed. In fact, many
scientists and engineers conjecture that new giant oil reservoirs are
waiting to be discovered while the opposing view that there are
no new giant oil reservoirs holds at least equal weight. If this latter
opinion is the case, as the world sinks into crude oil oblivion, it is
worth considering the phenomenon of the petroleum culture since
this has a high influence on petroleum economics.
In part, many ancient cultures collapsed because of their inability to maintain important resources that allowed society to flourish
(Tainter, 1988). Indeed, the development of the modern world
focused and became heavily dependent on the recovery and use
of petroleum. As of late, this has taken a serious turnabout because
some of the most promising new oil discoveries have turned out
to be very disappointing in terms of the amount of the resources
contained in these fields (Cooper and Pope, 1998).
The economics of a petroleum-based culture involves energy
resources and energy commodities, including:
1. Forces motivating firms and consumers to supply,
convert, transport, use energy resources, and to dispose of residuals
2. Market structure and regulatory structures
3. Distributional and environmental consequences; economically efficient use.