Peak Oil is Dead–Long Live Peak Oil

Energy Aware

Peak oil was fifty years ago. That was when the end of oil production growth resulted in the permanent decline in world GDP expansion.

Peak oil was never about running out of oil. It was about understanding how declining oil supply would affect future economic growth.

M. King Hubbert originated the term “peak oil” in a 1956 speech in which he correctly projected the physical peak of U.S. oil production. Hubbert was concerned about the effect of peak oil on society but his focus was about how oil would be replaced as an energy supply.

“There is a vast difference between the running of an industry whose annual production can be counted on to increase on the average five to ten percent per year and one whose output can be depended upon to decline at that rate.”

M. King Hubbert, Nuclear Energy and the Fossil Fuels

Hubbert understood that peak oil was about rates.

Unlike Hubbert, the Peak Oil movement of the early 2000s was concerned about declining oil production volumes. That’s where Peak Oil went wrong. What it got right was its emphasis on the economic consequences of peak oil.

“From an economic perspective, when the world runs completely out of oil is thus not directly relevant: what matters is when production begins to taper off. Beyond that point, prices will rise unless demand declines commensurately…

“The switch from growth to decline in oil production will thus almost certainly create economic and political tension.”

Campbell and Laherrère, The End of Cheap Oil

Figure 1 shows crude oil and condensate consumption versus GDP in the 182 countries for which there was data in 2020. Oil consumption and GDP have a statistically perfect correlation—the correlation coefficient (r²) is 0.95. The United States and China have the highest oil consumption and the largest GDP. Countries like Micronesia and Sao Tome and Principe have the lowest.

Figure 2 shows that world oil production growth declined from an average of 8.4% per year in the 1960s to only about 1.4% in the decade before the Covid pandemic. World GDP peaked in 1973 at 21% and decreased to an average of 3.8% from 2010 through 2019.

That’s peak oil.

It’s true that world liquids production just reached a new high and that the United States produces more crude oil than any country, ever. But that’s not what matters.

The ways that we have thought about peak oil for the last 25 years have been in volumes or percent of total resources used. We were thinking about it wrong. It’s all about rates.

How many experts know the dollar value of U.S. or world GDP? They know what’s important which is the rate of increase or decrease. Is the volume of world oil demand what analysts talk about? No, they talk about how much it rose or fell. It’s rates that matter.

For those who think that peak oil was a failed idea, a dead concept, think again. It happened decades ago and that explains why it has been so difficult to regain the robust economic growth of the past.

The real cause of widespread discontent in the world—whether from the MAGA Republicans in the U.S. or the Gilets Jaunes in France—is the deterioration of economic prosperity for all but the very richest in society. People know that their circumstances are worse than they were a few decades ago.

Some blame their leaders. Other’s blame the “elites.” Many blame immigrants. The real reason is peak oil. As Campbell and Laherrère wrote in 1998,

“It is important to realize that spending more money on oil exploration will not change this situation.”

Campbell and Laherrère, The End of Cheap Oil

We may not like the answer or its implications but at least peak oil provides an explanation. For that I say, Long live peak oil.

Art Berman is anything but your run-of-the-mill energy consultant. With a résumé boasting over 40 years as a petroleum geologist, he’s here to annihilate your preconceived notions and rearm you with unfiltered, data-backed takes on energy and its colossal role in the world's economic pulse. Learn more about Art here.

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  1. Michael Alexander Augustine on March 18, 2024 at 6:40 am

    I’d rather have 1% of a trillion than 50% of a thousand. That’s extreme, and I don’t know what the totals were in the 70s, but I’m used to people pointing at small percentage increases now and comparing them to large percentages in the past, while at the same time forgetting the base total has significantly increased over that time.

    • Art Berman on March 18, 2024 at 5:17 pm


      I have no idea what you are referring to.

      All the best,


      • Murray Duffin on March 31, 2024 at 3:37 pm

        Art. what Michael is referring to is the truism that absolute growth is more significant than growth rate. As the base grows larger, the same absolute growth is a lower rate, but is usually a satisfactory linear growth. A constant growth rate is a logarithmic absolute growth, which clearly becomes unsustainable at some point.

  2. Renaud Tarnus on March 16, 2024 at 8:39 am


    I’m aware my un-published comment might have looked inappropriate for this topic- but then is there not a mention of the “deterioration of prosperity” ? Nevertheless, I just wanted to point out that I mentioned the core theory using an incorrect term: the correct english term is “Value criticism”. I’m too much used to the french spelling, hence the mistake…

    Best Regards,


  3. Adam on March 15, 2024 at 10:38 pm

    I understand absolute volumes are not prioritized but we are consuming more but achieving less?

    • Art Berman on March 18, 2024 at 5:17 pm


      I have no idea what you are referring to.

      All the best,


      • Adam on March 27, 2024 at 8:26 pm

        Is global oil consumption per capita increasing or decreasing? World oil production may be the highest ever but if consumption per capita is down then hitting peak oil makes sense (productivity down, renewables, demand).

  4. John Esterer on March 14, 2024 at 8:08 pm

    Hi Art, FYI The link to Campbell and Laherrère, The End of Cheap Oil is broken.

    • Art Berman on March 15, 2024 at 4:52 pm

      Thanks, John.

      It worked a few days ago but I have used a different link now.

      All the best,


  5. John Gentile on March 14, 2024 at 4:07 pm

    Well said, thank you Art. Jeff Rubin, the former Chief Economist for CIBC World Markets, has written on the economic implications of the subject (specifically 2008 Great Recession, etc.) as another reference that what we’ve ‘run out of’ is the oil ‘we can afford to burn.’

    Speaking of which I hope you view it as additional thanks to mention to your other readers the reference you provided me to Mason Inman’s book on MKH – ‘The Oracle of Oil’. What you’ve written and the positive implication for Dr. Hubbard’s brilliance, vision and insight, if others don’t have time or inclination to read Inman as I did regarding currency substitution, is well served by your important article above.

    Since I’ve had time to understand both your work better I hoped, and with your recent writing I believe there is evidence of it, that you will be remembered, like MKH, then for much more then being a ‘geologist’. Essential as that credential is for both of you.

    • Art Berman on March 15, 2024 at 4:49 pm

      Thanks for your comments, John.

      All the best,


  6. Ted Konyi on March 14, 2024 at 3:21 pm

    As always, well presented.

  7. kali on March 14, 2024 at 12:39 pm

    Richard Heinberg has written this many years ago: He was right. In promising people ever increasing economic expansion social liberals and progressives have created their own worst nightmare. Oh Art, how do we move on from here so that this does not all end in global violence?

    • Art Berman on March 15, 2024 at 4:48 pm


      All we can do is to have our eyes open and recognize the amazing wonder in life.

      All the best,


  8. Glenn Taylor on March 14, 2024 at 12:30 pm

    You can’t blame this entirely on peak oil. We have the worst leadership I’ve seen in my 46 years as a voting adult…truly horrendous leadership in fact and taking a cheap shot at ‘MAGA Republicans’ doesn’t change the fact that Biden is worse than Trump which was a low bar to jump over. Throw in a mainstream media and academic class which lies more often than it tells the truth and you have a great recipe for civilizational decline.

    Nevertheless, our awful global leadership and their elitist enablers has made it as difficult as possible to find and produce oil and a parasitic bureaucracy is strangling every other industry which depends on oil. Sure, oil would still be more expensive to find even if we had decent leadership but terrible leadership compounds the problems of rising discovery costs and tougher environmental rules.

    Peak oil may be part of the reason but it’s not the whole reason why economic growth is declining.

    • Art Berman on March 15, 2024 at 4:47 pm


      The idea that leadership and policy are responsible for the human predicament is a blame game. People have been blaming their governments for their problems for at least 5,000 years. If replacing leaders were the solution, we would have found the perfect solution by now.

      Mature observers recognize that society’s problems are much larger than our leaders. They are about human behavior including yours and mine.

      All the best,


      • Glenn Taylor on April 19, 2024 at 1:51 pm

        I don’t blame it entirely on leadership. We get the politicians we deserve however I’m pointing out that our leadership today is truly awful compared to prior decades with policies to match, all of which makes everything you described in your article that much worse.

        • Art Berman on April 19, 2024 at 3:13 pm


          My purpose in the post is not blame. Foreign policy is a long-term effort that can be undone quickly by ignorance.

          Gladstone, in his 1880-1885 administration, washed Britain’s hands of the Ottoman involvement, and the British government withdrew its protection and influence from Constantinople. Of Gladstone’s having dissipated that influence, Prime Minister Robert Cecil lamented, “They have just thrown it away into the sea, without getting anything whatever in exchange.”
          —David Fromkin, A Peace to End All Peace (1989)

          All the best,


  9. David Archibald on March 14, 2024 at 11:24 am

    Art, Figure 1 seems to show US consumption at more than 100 million barrels per day. Please consider adding a graph using the same data that isn’t logarithmic.

    • Art Berman on March 15, 2024 at 4:41 pm


      Thanks. It was a decimal error in the division factor for the x-axis and has been corrected in the post.

      All the best,


      • GREGORY MCISAAC on March 18, 2024 at 3:50 am

        Even supposedly “perfect” correlations can not determine cause and effect. Underlying both GDP and oil consumption for individual countries is population size as well as other factors. A wealthy country like Switzerland has small GDP and small oil consumption partly because it is small. China has a high GDP and high oil consumption partly because it is large. Dividing both GDP and oil consumption by population would probably lead to a weaker correlation, but the causality is still not determined. Some countries with high GDP per capita may consume a lot of oil per capita because they are oil producers, like Saudia Arabia and the US, while other countries may have high GDP per capita for reasons other than oil production and still have high oil consumption per capita becaue they can afford to purchase oil on the global market (e.g, Switzerland).

        • Art Berman on March 18, 2024 at 5:16 pm


          Statistical sleight-of-hand does not change the underlying reality that GDP and energy correlate.

          All the best,


          • GREGORY MCISAAC on March 20, 2024 at 1:40 am

            I did not dispute the statistical correlation you presented, nor did I present any statistical slight of hand. I hardly presented any statistics at all. I presented some facts relevant to the interpretation of the statistical correlation you presented. If you can present evidence that my facts are wrong or irrelevant, then I will take back my comments and apologize. But if you can not do so, will you take back your “sleight of hand” comment and apologize?
            best regards,

            Greg McIsaac

          • Art Berman on March 24, 2024 at 10:05 pm


            I’ve explained the support behind my views. You have not.

            All the best,


  10. Tony Weddle on March 13, 2024 at 11:15 pm

    Good analysis. Thanks.

    An editing point: figure 2’s right hand scale is labelled percent but actually shows growth as a multiple of last year’s production (e.g. 0.1 instead of 10%).

  11. Romain Joye on March 13, 2024 at 10:28 pm

    Another very good paper.
    I am French.
    and agree with you.
    More and more French people are frustrated and see their future with pessimism and even without shale oil gas and extra heavy oil from Canada the situation would be worse.
    Thank you for your work and your explanations.

  12. Joye Romain on March 13, 2024 at 10:09 pm

    Hello Mr.Berman.
    Another very good paper.
    I am French.
    and agree with you.
    More and more French people are frustrated and see their future with pessimism and even without shale oil gas and extra heavy oil from Canada the situation would be worse.
    Thank you for your work and your explanations.

    • Art Berman on March 15, 2024 at 4:32 pm


      Thanks for your comments. People all over the world are frustrated about their deteriorating situations. That’s why I mentions les gilets jaunes in my post. More money, drilling and technology cannot reverse 50 years of declining oil production growth.

      All the best,


      • kali on March 15, 2024 at 5:29 pm

        There was sign carried by one of the gilet jaunes protesters back then, and i remember it well and i just wanted to share it because it really struck me as a very profound insight. I don’t remember the exact wording in French, but translated it said:

        End of the world
        or end of the month
        same pain
        same fight.

  13. James Halloran on March 13, 2024 at 5:36 pm

    Art, Good piece. Timely topic. The factor that is not given nearly enough attention is the growing efficiency of crude oil use. If we were still trying to run cars at seven mpg, we would be in big trouble.As the price tries to rise, it gives society a better target to improve efficiency. Just as a drilling rig from twenty years ago has almost no comparability to a rig used today, so too the use of a barrel of oil from twenty (or fifty – fill in the blank_______) years ago is not the same as what it can accomplish now.

    • Art Berman on March 15, 2024 at 4:29 pm


      Efficiency, technology and innovation are hugely over-valued and are more faith-based components of the human progress narrative. They are factors but try to make a graph showing their impact and you will be disappointed. They are secondary at best and probably account for only about 1% per year.

      All the best,


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