What is the Hubbert curve?
The Hubbert curve predicts the possible production rate of a finite resource over time. It appears as a symmetrical bell-shaped curve on a chart. Developed in the 1950s, the hypothesis explains the fossil fuel production cycle. It currently models the production cycle of any limited resource accurately.
How Hubbert Curve Works
In 1956, Marion King Hubbert presented the Hubbert curve at the American Petroleum Institute, titled “Nuclear Energy and fossil fuels.” As its name implies, Hubbert’s lecture began with fossil fuel generation. The Hubbert curve has recently become a commonly accepted tool for estimating natural resource production rates.
Investors value the Hubbert curve’s prediction of the peak of resource output. Significant upfront investments are required before creating a saleable output when starting a new enterprise, such as an oil well. Oil wells include drilling, installing equipment, and paying staff before the oil flows. Once the critical infrastructure is in place, output will steadily increase until it declines once the well’s oil is mostly spent.
Hubbert’s model predicted when a well would achieve its maximum output by incorporating natural reserves, the chance of discovering oil in a location, and oil extraction speed. This happens in the center of the curve before the well depletes and production rates drop.
Real-World Hubbert Curve
Individual projects and areas benefit significantly from Hubbert’s concept. The Hubbert curve may explain global oil output and regional production across regions like Saudi Arabia and Texas. Both models have very comparable and accurate appearances and predictions.
Naturally, production rates are not symmetrical in real life. Many use the Hubbert curve to estimate output rates. One famous application is the Hubbert Peak Theory, which predicts global peak oil output.
Some scientists say the Hubbert peak for US oil production was in the 1970s, but there is no consensus on world oil output. One reason for disagreement is that new oil extraction methods may delay any forced output drop.
Conclusion
- We can anticipate the production rate of any finite resource using the Hubbert curve.
- It was first created in 1956 to explain fossil fuel generation.
- This curve has shaped the debate over world oil production rates in different resource sectors.
