The price of a commodity is set at the intersection of supply and demand — notwithstanding bureaucratic finagling. Diminishing supply will be met with a price increase. Increased prices tends to incentivize pioneering entrepreneurs’ innovation, yielding higher profit margins. As more entrepreneurs work to mimic the pioneers’ innovations, supply increases and prices fall. This is precisely what happened in the early 21st century with the price of crude oil.
“Peak oil” remains a stubborn harbinger for many Christians who are passionate about ecology.
The fear is not necessarily that we will run out of oil but that we will run out of oil before experts have thought of a replacement. Many of these same Christians would be surprised to know that most geologists and engineers recognize that the supply of oil is always influenced by the demand and price of oil. While petroleum is technically a finite resource, the supply is not determined by production but by the price. As the price increases, the market regulates the demand — more oil is extracted, technology increases consumption efficiency, alternative energy is developed, etc. Any production models necessarily assume that demand will remain constant. The fact is, however, that no model can take into account dynamics that affect demand.
This is important to note, because demand is not a static force. Demand in a free-market economy is always dynamic. When discussing crude oil, demand always intersects with supply at the price point — even if that cost feels volatile. Like any commodity, however, crude oil is subject to all sorts of volatility because demand for commodities directly corresponds to the overall health of the market. This is compounded by the fact that the majority of the world’s known crude reserves are found in the most unstable regions in the world. Setting all of that aside, one would see that, however volatile the supply for commodity market might feel, the data tells a different story.
Further, ecologically-minded Christians unduly assume that anyone who warns about an impending oil peak is basing that information on empirical data. Often, however, these experts carry certain presuppositions which bias their initial research question. This is the case in “peak oil.”
M. King Hubbert is the individual generally credited with introducing the “peak oil hypothesis.” Like many economic predictions, the “peak oil hypothesis” is not completely based on empirical evidence. Instead, it is motivated by a philosophy of economics and politics called technocracy, which is “government or control by an elite of technical experts.” Technocrats sought to use science to mitigate the impending doom Malthus predicted. In the abstract of a paper delivered to the Geological Society of America, Peter McCabe explained that Hubbert applied the technocratic practice of predicting supply and scarcity in graphs to mineral production. His hypothesis “withered” with the technocracy movement but saw new life when after he began at Shell in 1947. It was not until the oil crisis in the 1970s, however, that his hypothesis was taken seriously. McCabe explained that experts “now believe that the shapes of fossil fuel production curves are determined by supply and demand, with resource abundance and availability being just one of several controlling factors.” Among the non-experts, however, the “peak oil hypothesis” remains a powerful misconception that negatively influences energy policy and public opinion.
In 2014, the Wall Street Journal headline “‘Peak Oil’ Debunked Again: The world relearns that supply responds to necessity and price” captured MeCabe’s explanation perfectly. “Peak oil” can refer to a number of things, but it usually refers to the maximum production of conventional oil. Hubbert introduced the idea in his famous essay “Nuclear Energy and Fossil Fuels.” It was figure 11 in his essay where he introduced the bell curve as the key to understanding production “of any exhaustible resource.”
His hypothesis recognizes that at some point a finite resource in any given reserve will decrease to zero. Anyone who has ever bought a milkshake understands this principle. A patron orders a chocolate malt and sticks her straw in to enjoy the shake. Before the straw entered the shake, the “production rate” was zero. Provided that there was no interruption due to brain freeze, a constant slurp passed the threshold where there was an ever increasing diminishing amount of malt left — until the joy ends with the final slurp.
Anyone who models peak to oil assumes that he or she knows of every “discoverable” reserve at that time. “At that time” is important, because technology reveals reserves or increase capability to extract oil previously consider “unrecoverable.” Think of reserves like milkshakes. A patron can only account for the milkshakes that he sees on his side of the counter. If the guy behind the counter has additional shakes in the back, the patron not only can’t drink them (“unrecoverable”) but he doesn’t even know they exist. How could he model the time when he’d run out of milkshakes if he can’t possibly account for the amount of milkshake reserves that exist behind the counter. This is Hubbert’s problem. He assumed that global reserves would peak around the millennium based on his assumption that there were — to his knowledge at that time — 250 billion barrels of crude locked in the earth’s crust. Here is his model:
Interesting, the estimations of Hubbert wildly underestimated that discoveries capable by modern exploration techniques. Both Venezuela and Saudi Arabia – at this moment – hold more petroleum individually than Hubbert knew of globally. Even this year, a reserve of around two billion barrels of oil was discovered in West Texas — previously thought to have peaked years ago.
Hubbert also miscalculated the amount of crude oil that the US was capable of producing and he assumed that a peak would occur in the mid-1970s with an ever diminishing supply. Even the Energy Information Administration modeled a decrease in supply after the 1970s.
From “Long Term World Oil Supply” of EIA.
Data, however, tells a different story. Production after 2000 has risen to levels comparable to the “peak” of 1970.
So what does this mean for the ecologically minded Christian? First, Christians must first recognize that the notion that the earth is barreling towards disaster for exhaustion of oil reserves is scientifically unfounded. This is not to say that petroleum is a good source of energy, just a plea for common sense when talking about supply and demand. This notion of “peak oil” is something that expert Michael Lynch calls “a rehash of neo-Malthusian prejudices.” Second, Christians need to appreciate the fact that ever increasing technology makes previously “unrecoverable reserves” recoverable. There was a time not too long ago where modern offshore drilling was not even considerable. As Lynch explained, “the mechanized, computerized industry of today is a far sight from 19th-century mule-drawn rigs.” Finally, as mentioned above, Christians need to appreciate how basic economic principles explain the supply of petroleum. Avoiding these misconceptions can save them from making faulty theological claims, the taxpayer from stress, lousy government initiatives, and unnecessary regulations while allowing the free market to do what it does best: supplying the most efficient energy to meet our dynamic demands at the optimal price most everyone is willing to pay.
 “technocracy, n.”. OED Online. September 2016. Oxford University Press. http://www.oed.com/view/Entry/198461?redirectedFrom=technocracy (accessed October 24, 2016). The lexicon lists 1919 as the first occurrence in a context related to the engineering of an economy: “1919. W. H. Smyth in Industr. Management Mar. 211/2 For this unique experiment in rationalized Industrial Democracy I have coined the term ‘technocracy’.” “Rationalized Industrial Democracy” seems like a great descriptor of technocracy.
 Peter J. McCabe, “The Rise and Fall of the Hubbert Curve: Its Origins and Current Perceptions,” Geological Society of America Abstracts with Programs, Vol. 35, No. 6, September 2003, http://gsa.confex.com/gsa/2003AM/finalprogram/abstract_61689.htm (accessed Oct. 24, 2016).
 “Peak Oil’ Debunked Again,” Wall Street Journal Dec. 4, 2014, http://www.wsj.com/articles/peak-oil-debunked-again-1417739810 (accessed Oct. 25, 2016).
 M. King Hubbert, “Nuclear Energy and the Fossil Fuels,” Publication No. 95 of the Shell Development Company, Houston, TX (1956), 10. http://mkinghubbert.com/files/1956.pdf (accessed Oct. 20, 2016).
 Hubbert, 22.
 Bradley Olson and Erin Ailworth, “Apache Has High Hopes for New Oil-Field Discovery in Texas,” Wall Street Journal Sept.7,2016, http://www.wsj.com/articles/apache-has-high-hopes-for-new-oil-field-discovery-in-texas-1473245702 (accessed Oct. 25, 2016).
 Hubbert, 22.
 Jay Hakes, “Long Term World Oil Supply,” presentation given at American Association of Petroleum Geologist, April 18, 2000, http://www.eia.gov/pub/oil_gas/petroleum/presentations/2000/long_term_supply/
sld001.htm (accessed Oct. 25, 2016).
 U.S. Energy Information Administration, “Crude Oil Production,” http://www.eia.gov/dnav/pet/pet_crd_crpdn_adc_mbbl_a.htm (accessed Oct 25, 2016). To see the graph: delimit data, find the column ‘View History,’ and enjoy your graph.
 Michael Lynch, “Whatever Happened To The New Oil Paradigm?” Forbes Magazine May 13, 2016, http://www.forbes.com/sites/michaellynch/2016/05/13/whatever-happened-to-the-new-oil-paradigm/#4abeb2883f5f (accessed Oct. 25, 2016). See also, Lynch “Peak Oil’ Is a Waste of Energy” New York Times Aug., 24, 2009, http://www.nytimes.com/2009/08/25/opinion/25lynch.html?_r=0 (accessed Oct. 25, 2016).