Forecasting Ultimate Oil Recovery and Its Rate of Production: Incorporating Economic Forces into the Models of M. King Hubbert

Cutter J. Cleveland and Robert Kaufmann

The Energy Journal, 1991, vol. Volume 12, issue Number 2, 17-46

Abstract: Dwindling production of oil from domestic fields and rising consumption have increased U.S. dependence on imported oil to an all-time high. Concern about the effect of this dependence on economic and national security has focused attention on the domestic resource base: how much oil awaits discovery and at what rate can it be produced? We analyze the adequacy of domestic resources by updating and modifying in important new ways the models of discovery and production developed by M. King Hubbert. Hubbert's models have been a lightning rod for debate about the future of oil resources because they have been the most accurate on record. When we include real oil prices and the annual rate of drilling effort in Hubbert's model of oil discovery, there is no evidence for claims that the secular decline in discoveries per foot of well drilled has been arrested or reversed in the lower forty-eight states. Our results indicate that there is little oil waiting to be found in unexplored sedimentary formations in the lower forty-eight states using conventional exploration techniques. Furthermore, we show that the declining quality of the resource base has offset the positive stimuli of price increases and changes in government policy towards a free market. Having passed through a period in which production in the lower forty-eight states fell 20 percent while real oil prices tripled there seems little that the U.S. government can do to alter the bottom line for domestic operators so that U.S. production can displace imports to a significant degree. We conclude that the conventional supply side offers little room to manoeuvre around increased dependence on imported oil.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 1991
References: Add references at CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=2045 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
Journal Article: Forecasting Ultimate Oil Recovery and Its Rate of Production: Incorporating Economic Forces into the Models of M. King Hubbert (1991)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:1991v12-02-a03

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().