Abstract

Using innovative concepts related to U.S. crude oil production and reserves data, Marion King Hubbert generated prescient and unwelcome forecasts in 1956 and again in 1962, that annual U.S. crude oil production would peak in the late 1960s or early 1970s at around 3 billion barrels, and decline thereafter, implying growing American dependence on imported oil. Hubbert estimated that ultimate domestic crude oil production would total about 200 billion barrels.

These forecasts brought him into sharp conflict with the U.S. Geological Survey’s (USGS) Vincent E. McKelvey from the 1960s into the 1970s, even after McKelvey became Director of the USGS in 1971. Under McKelvey’s leadership, the USGS had consistently estimated that domestic crude oil resources were as much as three times larger than Hubbert’s forecasts—as much as 590 billion barrels—sufficient “to meet projected consumption through and beyond” the end of the 20th century. Their increasingly acrimonious and public dispute reached out well beyond the American scientific community, and spilled over into national energy policy.

When U.S. crude oil production peaked in 1970 at about 3.2 billion barrels, Hubbert’s bold forecast seemed to be confirmed, and he was hailed as a prophet. McKelvey was fired in 1977 by the incoming Carter administration, and Hubbert’s forecasts were used to deny subsidies to domestic exploration and production companies (“if the resource endowment is not there, it’s not worth paying companies to try and look for it”), and developing alternative energy sources, including U.S. oil shale deposits.

Working under the protection of U.S. Sen. Henry ‘Scoop’ Jackson, Hubbert then developed analogous estimates of future domestic natural gas production, as well as global crude oil production. He forecast that U.S. natural gas production would peak in 1975, at about 18 trillion cubic feet per year, with a total production of about 1050 trillion cubic feet. Hubbert also predicted that global oil production would peak at an annual rate of about 40 billion barrels in about 1995, with ultimate production of about 2000 billion barrels. These forecasts have long since been eclipsed by actual production, and discovered reserves.

Examined from the vantage point of nearly 40 years, all of Hubbert’s forecasts are clearly too pessimistic, primarily because he failed to anticipate that technological breakthroughs would make exploration and production in hostile environments possible, and that new drilling and stimulation technologies would allow reservoirs to be developed in rocks then thought to be incapable of production. Furthermore, the arrogant intransigence of both Hubbert and McKelvey prevented the nation from receiving the benefits of a balanced assessment of future crude oil and natural gas supplies.

One of the most powerful lessons from the Hubbert-McKelvey feud has to do with prevalent cognitive bias among scientific and technological experts—a topic unrecognized in the 1970s and just now beginning to be examined today. The most obvious bias was their overconfidence—they each thought they knew more than they really did, and their egos would not allow them to objectively examine (and merge) their positions. Hubbert could not grasp that anything he could not measure could still exist (and be important); McKelvey could not accommodate Hubbert’s rigorous mathematics of the near term to his own much longer subjective time-frame. Another obvious bias afflicting both men was confirmation bias—considering only evidence that supported their own positions in the conflict. Moreover, both men were already advocates for their particular philosophies, and it is becoming increasingly clear that objective science and advocacy in the same field are incompatible. What was desperately needed was “group wisdom”—a dispassionate merging of both sets of facts into a cohesive broader scenario. This is the most trenchant lesson to be gained from the Hubbert-McKelvey conflict, one that probably still has not been adequately assimilated by Western Science, and one which current partisan politics discourages, especially with the increase of Government funding of “favored” scientific research. Properly managed, the Hubbert-McKelvey conflict could have laid the basic foundations for a continuing evolution of National Energy Policy. What we got was an undignified scientific squabble. In any case, the nation was ill-served by both men.

This experience bears on formulation of U.S. energy policy, which is urgently needed if the U.S. is to continue as a global leader in the 21st century. Most Americans do not grasp how closely energy consumption correlates with economic prosperity. New domestic gas provided cheap energy for developing industry, and new oil reduced balance of trade deficits substantially. U.S. natural gas production and reserves have been increasing since 1986, and in 2009, U.S. crude oil production increased for the first time since 1971. Continued rising domestic oil and gas production is now forecast years into the future.

However, this new supply does not eliminate eventual supply-limits of economic oil and natural gas. It should be seen as a providential gift that has bought us time to transition into a time of more expensive energy, and to develop an objective, informednon-partisan national energy policy that is consistent with recognized long lead-times of industrial-scale energy projects. Whether we have the wisdom and restraint to use this time effectively remains to be seen.