What Is the Hubbert Curve?
The Hubbert curve is a method of predicting the production rate of any finite natural resource over time. When plotted on a chart, the result looks like a symmetrical bell-shaped curve.
The theory was developed in the 1950s to explain the production cycle of fossil fuels and is now considered to be an accurate indicator of the production cycle of any finite resource.
Understanding the Hubbert Curve
The Hubbert curve is based on a theory regarding the lifecycle for the exploitation of any finite natural resource such as petroleum. That is, the rate of production will be limited initially when only a few drilling operations have been launched. Peak production will be achieved gradually as the infrastructure to support it expands and exploration for the resource increases. Then, the natural resource will gradually become depleted. Extraction rates will begin to slow and eventually production will cease.
- The Hubbert Curve can be used to predict the production lifecycle of any finite natural resource.
- On a chart it appears as a bell curve, showing how production grows, peaks, and, inevitably, declines as the resource is depleted.
- The Hubbert Peak for oil production in the U.S. was reached in the 1970s.
The theory was developed by Marion King Hubbert, an American geologist and geophysicist. Hubbert first explained his theory during a presentation titled Nuclear Energy and the Fossil Fuels made to the American Petroleum Institute in 1956. Hubbert's model tied reserves, discovery rates, and production rates into a formula that predicts the lifecycle of a natural resource, and predicts that peak production of a natural resource occurs in the middle of the cycle.
Implications of the Hubbert Curve
The predictions presented by the Hubbert curve are intuitively comprehensive.
They also can be observed both globally and in a confined geographic area. That is, the entire global output of oil over time could be displayed in a Hubbert curve, or the oil output of Saudi Arabia or Texas could be charted with strikingly similar results.
The Hubbert curve may not always appear in a perfectly symmetrical bell shape in the real world.
Since its publication, the theory has become highly regarded and popular in the scientific community for its ability to predict the depletion of any finite natural resources. Notably, it is the basis for the Hubbert Peak Theory, which has been used to predict peak oil production around the world.
According to some industry analysts, the Hubbert Peak for oil production in the United States was reached in the 1970s. There is little consensus on when the peak for global oil production will be reached. Some argue that new technologies for extracting oil have pushed the date for any forced decline in production farther into the future.
In the real world, the Hubbert curve is not always a perfectly symmetrical bell shape. Outside influences such as government regulation, the discovery of competing natural resources, and political decisions affecting the industry can result in a production curve that is not symmetric.