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

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  • Theodosios Perifanis

    (Independent Researcher, 19004 Athens, Greece)

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.

Suggested Citation

  • Theodosios Perifanis, 2022. "How US Suppliers Alter Their Extraction Rates and What This Means for Peak Oil Theory," Energies, MDPI, vol. 15(3), pages 1-21, January.
    • Handle: RePEc:gam:jeners:v:15:y:2022:i:3:p:821-:d:731743
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    References listed on IDEAS

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    1. Chapman, Ian, 2014. "The end of Peak Oil? Why this topic is still relevant despite recent denials," Energy Policy, Elsevier, vol. 64(C), pages 93-101.
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    Cited by:

    1. Theodosios Anastasios Perifanis, 2022. "The Macroeconomic Results of Diligent Resource Revenues Management: The Norwegian Case," Energies, MDPI, vol. 15(4), pages 1-14, February.
    2. Vicknair, David & Tansey, Michael & O'Brien, Thomas E., 2022. "Measuring fossil fuel reserves: A simulation and review of the U.S. Securities and Exchange Commission approach," Resources Policy, Elsevier, vol. 79(C).

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