Thursday, January 9, 2014

Hubbert's Curve, and what it could mean for bicycling

M. King Hubbert accurately predicted in 1956 that U.S. oil production would peak between 1965 and 1971. He was correct. The Hubbert logistic model, now called Hubbert Peak Theory, and its variants have been used to describe and predict the peak and decline of production from regions, and countries, and has also been applied to other limited resource production domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical logistic distribution curve (sometimes incorrectly compared to a normal distribution) based on the limits of exploitability and market pressures. Now, as demonstrated in the chart below, we have many predictions for world oil production, with most going into decline after 2010.

There are numerous predictions, but most follow a similar curve. Despite mass media frenzy, Fracking will never see the U.S. return to 1973 production levels, is disastrous to the environment, and is only delaying the inevitable.

Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, predict negative global economy implications following a post-peak production decline and oil price increase because of the high dependence of most modern industrial transport, agricultural, and industrial systems on the low cost and high availability of oil. Where bicycling is concerned, the prospects could be enormous. 1973, the year of the Arab Oil Embargo, still holds the record for bicycle sales in America. Like snow shovels at Home Depot on the eve of a blizzard, bike shops couldn't keep bicycles in stock.

According to the National Bicycle Dealers Association, sales rocketed to 15.2 million units (20+" wheel size) in 1973. It was obvious why. Not only was gasoline very expensive, but station owners set their pumps to run at a trickle, causing massive lines. Often times, fights would ensue when someone was suspected of cutting in line. And those of us who biked back then remember a terrible increase in driver impatience and aggression. Folks looked for anything they could find to save gas, and unfortunately, went about it with rage. But it did provide a much needed boost to the bicycle industry. Among the most popular models sold in the early '70s were the Peugeot UO8, Raleigh Grand Prix, Fuji Del Ray, Schwinn Varsity, among others. These bikes typically sold in the $100-$150 range.

So are we heading for a similar scenario all over again? It depends who you listen to. Industry analysts, of course, paint the rosiest picture - while others like James Howard Kunstler and the Association for the Study of Peak Oil and Gas are certain we are heading into a long emergency that no alternative energy source can back fill.

One thing is for certain; should we see a steady decline in oil availability, the price of gasoline will rise dramatically, forcing many folks to think outside the box where transportation is concerned. It could be a windfall for bicycle companies, bike shops, co-ops, and anyone else involved in the manufacture, repair, and sale of bicycles. And depending on who you believe, it could happen very soon, perhaps by 2015 - this time permanently. Below is a documentary on the subject, with some very compelling arguments.

Have the Obits For Peak Oil Come Too Soon?
Fears of global oil crisis aired at Transatlantic Energy Security Dialogue

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