So oil prices are down and production is up and people are looking at the Hubbert curve and saying “Where is your King now“? It’s probably a good time for a quick summary of my understanding of the situation.
Hubbert wrote his initial paper (.pdf) in the middle of a twenty-year run of steady oil prices — around, say $25/bbl at todays prices. At the time, the US was the biggest producer of oil, but it was not so big that it could control the market. There were enough other suppliers, and demand was still low enough that changes in US production had little impact. So for all intents and purposes he was dealing with a fixed price. Note that throughout this period, no-one had tested the boundaries of this situation.
Hubbert was talking about a physical quantity, the amount of oil in the ground, given the facts known at the time, and the rate at which it will be recovered. It’s interesting to note that he never uses the words “price” or “cost”, although he does mention the possibility of new technologies.
So the Hubbert Curve says that with a fixed supply and a fixed price, you will recover the easy oil first, up to some peak, and then your fixed price will only allow you to recover smaller and smaller quantities as time goes on.
In the almost sixty years since his first paper, two major changes have occurred. First, is the massive increase in demand, and the associated increase in price per barrel. Second, are the technologies that the higher prices make profitable.
Note that the increased price (constant dollars) associated with the increased demand implies that the oil isn’t all that easy to get. If it were, we’d still be exploiting $25/bbl sources. So what Hubbert really was writing about was peak cheap oil.
As Hubbert’s detractors have noted, new technologies, like deep ocean drilling and shale fracking have made more oil available, but this is done at some technological price. This year’s slide in oil prices is causing a shakeout in the fracking industry, with many companies going bankrupt, because the technology isn’t profitable at a mere $50/bbl.
Do The Math has a good summary of the situation at the end of the last decade, and a discussion of the current state of play of physical production (and many of the many comments are worth reading). I’d also recommend his discussion of our current trajectory of heating up the planet, a thermodynamics discussion that has nothing to do with global warming. TL;DR version: at a 2.3% growth rate of energy use, be it solar or nuclear, within about 400 years the surface of the Earth will become uninhabitable, mostly due to waste heat. Now 400 years is a long time, but it’s certainly within the lifetime of a major civilization (It’s about the amount of time since the Jamestown Colony).