How US Suppliers Alter Their Extraction Rates and What This Means for Peak Oil Theory

Theodosios Perifanis
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Theodosios Perifanis: Independent Researcher, 19004 Athens, Greece

Energies, 2022, vol. 15, issue 3, 1-21

Abstract: Hubbert suggests that oil extraction rates will have an exponentially increasing course until they reach their highest level and then they will suddenly decline. This best describes the well-acclaimed Peak Oil Theory or Peak Oil. We research whether the theory is validated in seven US plays after the shale revolution. We do so by applying two well-established methodologies for asset bubble detection in capital markets on productivity rates per day (bbl/d). Our hypothesis is that if there is a past or an ongoing oil extraction rate peak then Hubbert’s model is verified. If there are multiple episodes of productivity peaks, then it is rejected. We find that the Peak Theory is not confirmed and that shale production mainly responds to demand signals. Therefore, the oil production curve is flattened prolonging oil dependency and energy transition. Since the US production is free of geological constraints, then maximum productivity may not ever be reached due to lower demand levels. Past market failures make the US producers more cautious with productivity increases. Our period is between January 2008 and December 2021.

Keywords: Hubbert; extraction rates; peak oil; depletion; energy security; energy transition; COVID-19; productivity; oil; production (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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