Economic Comment on peak oil by RBS Chief Economist

ANYONE WHO has seen the film Mad Max will know energy shortages aren’t something we should take lightly. Enough to elicit the breakdown of civil order, apparently! So should we be worried?

To answer that question, let me start by taking you back to the 1950s when M King Hubbert – a scientist who worked for the Shell Oil Company – noted a pattern in the exploitation and exhaustion of individual oil fields in the US.

The pattern was as follows. Petroleum engineers would find a new oil field, ramp up production, which would peak, then tail off steeply.
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Hubbert concluded that, with some additional information about the number of oil fields to be found in the US and the size of their reserves, he could construct a production profile for the whole country. That’s what he did and his predictions about when US oil production would peak proved remarkably accurate.

Sunday Herald