Perspective on Peak Oil Theory

Think back to where you were at the beginning of 2008.  What was your outlook on fossil fuels?  Did you subscribe to the "peak oil theory?"  The peak oil theory is an idea published in the middle of the 20th century that, similar to the lifespan of an oil well, the world's production of oil will experience exponential growth until peak oil production (thought to be near the turn of the 21st century), and then, in apacolyptic horror, production will decelerate almost as quickly.  A graph of estimated production figures, according to this theory, looks like a standard normal curve with a more elongated (taller) peak.  Does this theory still have validity to you today?  Maybe you need to reconsider your outlook.

If you're like me, back in 2008 you didn't know anything about the oil and gas industry except for what you gleaned from popular media.  Well, back then peak oil theory had serious traction.  People everywhere, even the experts, were sure we were going to deplete the worlds fossil fuel reserves in the next 25 years.  That fear permeated American society.  It likely played an major role in the election of Barack Obama, and is perhaps the reason the American media never made a big deal of him sinking billions of taxpayer dollars into "green companies."  http://tinyurl.com/greenfails 
 That is not the case today.  There has been a near 180 degree change in attitude about oil.  Part of that is due to the fact that American consumption of oil peaked about 5 years ago, but most of the attitude adjustment is due to the innovations in well completion technology.

I was reminded of this change by my oil and gas law casebook.  Our class uses this book http://tinyurl.com/oilcasebook The foreward is dated November 2007.  The author states at the beginning of Chapter 6: 

"Discoveries of new major oil and gas reserves on privately owned lands in the United States are becoming less and less likely.  The last frontiers for major domestic discoveries are generally believed to be on public lands..."

The discovery of the Cline Shale and formations like the Bakken in the last five years render this statement absurd today.  Consider that the Cline was discovered in West Texas not far from Midland, a city that has more oil and gas experts per capita than probably any other city in the world.  Drilling operations have been ongoing in that region for at least 100 years.  How could a formation like that go unnoticed for so long, especially considering its vast size?  It's as big as the state of Vermont for crying out loud!  The answer is pretty simple.  We likely knew of the Cline formation for years; heck, the Bakken was discovered in the 1950s.  But with the technology available in the 20th century these shale formations were considered "dry."  Nothing came out of your well-head at those depths.  But now with fracking we are able to unlock the oil trapped in these formations. 

Experts now say there is located in North America enough recoverable hydrocarbons to meet American energy demands for the next 200 years. http://www.businessinsider.com/us-200-year-supply-oil-2012-3

Peak oil theory is on its heals today, but like any idea with a political taint it will likely refuse to die.  All you have to do is google "peak oil theory" and you can find blogs and articles written by "peak truthers" (or "peakers") declaring the theory is still very much in tact.  If you choose to read their stuff pay attention to the ways they try to "move the goal-post" by modifying the theory ever so slightly.