The Oil Drum

The hypothesis is that bell shaped production functions have a linear-like behaviour on a P/Q vs Q graph. It works for Gaussian and time differentiated Logistic functions. But for Gaussian production distributions the linear regime will overestimate the URR since linearity fails as P --> 0 as the P/Q vs Q function curves down towards the Q axis. I think that for large production regions and the world the Gaussian distribution is a better fit. So the whole debate is missing the mark. The URR will be lower than we can predict around the time of the peak. Underpredicting the URR is not the problem.

Here, at least is a hypothesis: The infrastructure put in place for an oil field closely correlates with the initial estimate of URR...

I think there's something to that. Otherwise, in the Prudhoe Bay example, the pipeline capacity (if too small) would have forced a "mesa shape" to the curve.

But suppose that too-small a pipe had been built. If later the URR was seen to be big enough, another pipe would have been proposed. The reason is that when people see an opportunity for profit, they usually pursue it.

In my view the basic assumption behind the Hubbert method is exactly that. Humans are a "weedy" species, that tend to exploit all resources they can. The method expects such growth, which is indeed driven by economics. It does not depend on a specific rate of growth of production (in the initial, exponential, stage). The same math works for any constant rate of growth. In reality the growth rate fluctuates due to non-geologic factors, but in the long run (and the method applies to decades-long periods) there is usually a roughly exponential development, which slowly and eventually becomes affected by depletion (the growth rate slows down) - the first signs of below-ground factors.

I don't believe the downslope will mirror the upslope though, because I can't think of any underlying reason for that.

"Would you please please please please please please please stop talking?"

A Hemingway character.

No more tempests in teapots.

HL is a theory without a hypothesis. OK, oil production is never a square wave and it rises then falls, and the area under the curve will equal URR at the limit but so what!

OK, let's see.. I think you have sort of answered your own question there, Alan. The hypothesis goes something like this: many natural phenomena follow a bell-shaped curve. I think there's a formal statement of this in the discipline of statistics.

So, what Hubbert was saying, is that oil production will follow this trend regardless of political / economic / etc. issues. Basically we're gonna pump it out and use it as fast as we can in the end. Some of the TOD filk will superciliously say it's a "logistic curve", but they're both just blobs on a graph, near as I can tell. It looks to me like the bell is just the first derivative of the logistic WRT time.

I was trying to explain this in a recent thread, and was duly corrected: Hubbert did not originate "Linearization"; it had been my impression that he did. Anyhoo, the linearization is a clever way of graphing the production curve so that the points (theoretically) fall along a straight line. Furthermore, as time passes and production continues, the estimate gets better (because there is more history [larger Q] in the later points on the graph).

The beauty of linearization is that it allows you to place a ruler on the graph, strike a line, and get an estimate of the URR for the stuff you're trying to predict.

But in the end, it's all just statistics and the actual URR will only be known in hindsight. Many of us have looked at the graphs put together by SS, Khebab, westexas, and others and concluded that peak is probably about now. Since it is a century-long bell curve, there may be as much as 5 - 10 years of uncertainty as to the actual location of the peak — check back in 2025 and we'll know for sure.

There must be some similar process or behavior at work in order for HL to produce similar outcomes in different oil provinces if that is what it is doing.

Yes, and I'm surprised there has been so little discussion of this so far on this site. On poster on the HL debate left a clue: creaming curves.

It appears from the empirical evidence that the sizes of oil fields in any oil province are distributed so that there are very few large fields and increasing numbers of increasingly smaller fields. Geologists can't demonstrate from physical laws why this must be so, nor can they give you a formula to predict the distribution, but still that's what the creaming curves tell us.

Given this fact, it is easy to see that simple economics will, in part, govern the history of oil production. All other things being equal (and I know they are not), production from a large field should be more profitable than a smaller field because the costs of exploration and development of a field can be amortized over more barrels of oil. That being the case, larger fields will tend to be developed before smaller fields.

Over time, as fields deplete and production declines, that decline must be offset by the development of an ever larger number of smaller fields, which decline more quickly and must be replaced at an increasing rate if production is to be expanded or even just maintained. At some point, the capacity, financial and technical, of the oil industry to add new production will fail to keep up with the required rate of development and production will peak and go into decline.

There is a hypothesis for you all to chew on.

For Prudhoe Bay look at this analysis:
http://mobjectivist.blogspot.com/2006/12/alaska-peak.html

Everything was put in place, and then they turned on the switch. That's what explains the deferred sudden increase that occurred a few years after discovery.