A Brief History of Peak Oil

With apologies to Stephen Hawking for the title of this blog and an acknowledgement of a recent Wall Street Journal article on the subject, here’s a summary of various predictions of when the world will run out of oil:

1885 — “The amazing exhibition of oil is a temporary and vanishing phenomenon.” — State Geologist of Pennsylvania

1919 — “Within the next two or five years, the oil fields of this country will reach their maximum production.” — Van H. Manning, U.S. Bureau of Mines

1956 — “U.S. oil production will likely peak between 1965 and 1970 and decline steadily thereafter.” — M. King Hubbert, Shell Oil

1978 — “We are living in the twilight of the petroleum age.” — Glenn Seaborg, Atomic Energy Commission

2005 — “I don’t believe you can it get more than 84 million barrels (per day). I don’t care what…anybody else says.” — T. Boone Pickens, energy investor

2014 — “Beats me.” — James R. Maughan, Technology Director, GE Global Research

The truth is, world oil production has now reached 90 million barrels per day, 10 times what it was in the 1950s, and doesn’t appear to be slowing down anytime soon. Amazingly, the U.S. now produces more oil than Saudi Arabia. What the observers above (except the last, of course) failed to recognize is that technology for exploration and production would somehow outpace the world’s enormous appetite for oil.

Part of this growth comes from increasingly sophisticated methods for finding oil, 3D and 4D seismic surveys to reconstruct the layers of rock on the planet and find those likely to contain oil and natural gas. Sometimes this oil is in convenient spots — Texas comes to mind — but at other times lies in less accessible locations. About 12 percent of known oil resources are offshore, part of the continental land masses that are now submerged but long ago teemed with plant life. Technology that was unimaginable 50 years ago is now used to produce that oil.

Not all plant life decayed into oil or gas that will easily flow from the rock under pressure. Much of it was absorbed into loose sands that are now saturated with oil. The widely known Alberta oil sands, for instance, hold the equivalent of 2.2 trillion barrels of oil, more than all other conventional resources combined. This oil is typically produced by either strip mining and processing the sand, or digging a series of wells for steam injection to heat the sand in situ and using alternate wells to extract the now heated, flowing oil. While technically advanced, this type of production is controversial because of its impact on the land, as well as the energy-intensive process of heating the sands. Approximately 20 percent of the produced oil’s energy content is required for the production itself.

Lastly, the use of new horizontal drilling techniques has greatly increased the amount of oil that can be economically extracted from the ground, giving birth to the shale oil revolution in the U.S. now — and likely in many other countries in the future. Rock layers containing oil or gas are typically more horizontal than vertical and are relatively thin.

Production is greatly increased by steering an initially vertical well though a 90 degree turn into this horizontal layer of oil-bearing rock, up to five miles in some cases. Production is further increased through hydraulic fracturing. After the initial drilling and placement of the pipe and casing, the well is perforated with explosives underground at maybe 20 or 30 locations along the horizontal section of the well. The well and the now-accessible surrounding regions of rock are then pumped with a hydraulic fluid (mostly water and sand) at enormous pressures that crack the rock and create fissures for the oil and gas to flow. That fluid flows back out, and oil and gas production follows it. The impact of this technology breakthrough is so significant that it affects not only oil production rates, but also the world economy — and, in fact, global geopolitics.

At GE Global Research, we’re developing breakthrough technologies to improve nearly every step of the production process, including:

  • Reliable subsea motors and equipment for offshore production
  • Multiphase pumps to extract oil, gas, water and sand from the well
  • Motors and pumps that sit deep in the well to push more oil and gas to the surface
  • New agents to create bigger and longer-lasting fissures from hydraulic fracturing
  • Models to optimize reservoir management
  • Processes to clean and reuse water more effectively

While ultimately it’s true that oil is a finite resource on the planet and production can’t increase forever, the introduction of new technology keeps pushing the date of peak oil further and further out, allowing for the development of other long-term resources that can be a substitute. In the meantime, it’s folly to try to predict when human innovation will no longer be able to keep up with growing demand. We’ve been wrong in the past.

This blog originally appeared on Ideas Laboratory. Read it here.


  1. Eric Robertson

    We will not ever “run out” of oil! Eventually, It may become too expensive to economically compete with other sources of energy, but we will not run out of it. When it is no longer used as our primary source for transportation energy depends on technology development in all energy areas. Even when (or if) jet fuel is made from something other than petroleum, oil and gas production will still be an important part of our lives as a chemical feedstock etc. Oil and gas production will be important to the global economy for a very long time.

  2. Koton Usani

    Great Write-up. Technology has only just pushed back the date of peak oil and reduced oil prices but as we in the oil and gas industry know, all oilfields have a terminal date. A classic example is in Nigeria’s niger delta where most of the land based oilfields have been depleted and the focus is now shifting to the swamp and ocean based oilfields. But I am confident that the world will never actually run out of energy, but will eventually run out of oil!

  3. Mike Ming

    Great stuff James! And on NG we’re still setting new production records in the US… Sheik Yamani said “The stone age didn’t end because we ran out of stone”. There’s a lot of O&G left but we have to do it right. That’s our challenge to step up to.

  4. The Universe

    The 90 million barrels quoted in the article includes several substances that are not oil. Subtract the natural gas liquids and the lease condensate and refinery gain and you’ll get a number hovering right around the 84,000,000 barrels per day.

    Global production of actual crude oil has plateaued since 2006.

    Global production of conventionally produced crude oil peaked in 2005 and has been declining ever since.

    These low oil prices will lead to production declines which is exactly what is predicted by peak oil.

    The author of this article has proven his ignorance of the subject of peak oil.