HUBBERT'S PEAK: The Impending World Oil Shortage

HUBBERT’S PEAK: The Impending World Oil Shortage.

By Kenneth S. Deffeyes. Princeton Univ. Press. 224 pp. $24.95

In The Coal Question (1865), economist W. S. Jevons predicted that Britain’s prosperity would decline in about a century, when the nation ran short of coal. The British coal industry did go into sharp decline in the 1980s, not because of supply constraints but because Britain developed its own oil industry (and because Prime Minister Margaret Thatcher wanted to undermine trade union power). In 1956, petroleum geologist M. King Hubbert predicted that American oil production would peak around 1975. He was close: It peaked in 1970. In this venerable vein, Deffeyes argues that world oil production will peak between 2004 and 2008 and decline thereafter, with potentially calamitous consequences.

Geologist Deffeyes began his career in the Oklahoma oil patches, proceeded to Shell Oil’s research lab, and ended up on the faculty of Princeton University. The first half of his book is an accessible and absorbing primer explaining where oil comes from, how it was formed, and where and how it is found and extracted. Deffeyes’s long experience in the oil business allows him to explain these subjects with authority and verve, mixing passages on the structure of hydrocarbon molecules with tales of old-time oilmen.

In the second half, he advances his controversial argument with a blend of geology and mathematics. He thinks it most unlikely that additional major oilfields remain undiscovered. On its own terms, his argument convinces. Against it is the fact (which he acknowledges) that big oil companies, which presumably have access to the best information, aren’t behaving as they should if he’s right: They aren’t buying up every last oil well. Nor, as yet, has the stock market behaved as if it agreed with Deffeyes. It may be that he has extrapolated too blithely from the United States, where oil prospecting has been very thorough, to countries where it has been less methodical. At the moment, no one can know for sure.

If Deffeyes is right, the implications are enormous. Though he does not spell them out in detail—that would offer too many hostages to fortune—he anticipates that sharply higher oil prices will bring difficult economic, social, and political passages for those societies most dependent on oil, especially on imported oil. Exporters will charge top dollar: a gigantic windfall for the Saudis, Kuwaitis, and a handful of others. He implies that the tumult will be greater than that occasioned by the oil price hikes of 1973 and 1979.

To avoid this scenario, Deffeyes recommends that we begin preparing now. We must develop renewable energy sources such as solar, wind, and tidal power. We must improve energy efficiency. Such steps will not be enough, however, so we also must shed our fear of nuclear energy. In short, Deffeyes envisions an energy future very different from the status quo. One implication is that current American policy, in promoting still heavier investment in fossil fuels, is misguided. If we don’t shift away from oil, we may as well gift-wrap the entire budget surplus and send it to the Saudi royal family.

There are few things as important nowadays as the energy system, and few books on the subject as thought provoking as this one.

—J. R. McNeill