Chart of the Week: The Peak of “Peak Oil”



When oil was surging in early 2008, the idea of “peak oil” was also surging. Also known as “Hubbert’s Peak” after the American geologist who did the original modeling, the basic concept is that the supply of oil that is available for extraction will soon max out, if it hasn’t already, with severe consequences for the global economy.

Google Insights provides a tool to track the popularity of search terms and “peak oil” jumped as oil prices shot up to $150  (and analysts moved their targets ever higher). When prices crashed in the second half of 2008, so too did interest in peak oil. Indeed, the drop in searches led the plunge in prices, although that might have more to do with headline fatigue than anything else. Notably, even as oil prices have picked up again in 2009, searches for peak oil have continued to drift down.

In the current issue of Foreign Policy, Daniel Yergin points out that this was the fifth time since the 1880s “that the world supposedly ‘ran out’ of oil.” Undoubtedly, the argument for peak oil has become more difficult to make with massive new finds like Tupi Fields off the coast of Brazil. There are also potential new fields that await discovery under the Arctic Sea caps: Russia has literally planted its flag on the ocean floor while the US and Canada have just recently begun marking out their claims for the North American continental shelf. A possible rejoinder is that the day of reckoning is merely being put off. However, to judge by the search patterns, such arguments are making little headway for now.



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