Chase Manhattan Predicted Peak Oil in 1956

Fifty two years ago – on March 8, 1956 – famed geologist and geophysicist M. King Hubbert stepped to the podium at the Spring meeting of the Southwest Section of the American Petroleum Institute and delivered a speech predicting that U.S. oil production would peak within 10-15 years. When oil did in fact peak in 1970, Hubbert enjoyed several years of acclaim and public attention during the mid to late 1970s. Hubbert’s calculations indicated that world oil peak would occur around 2000 but could be delayed 5-10 years or more by significant disruptions in world oil production. It now appears that conventional oil peaked in 2005. Many experts believe the world will peak in total petroleum liquids by 2012. We are woefully unprepared even if decline rates are lower than in the classic Hubbert model.

After the world peak in total petroleum liquids occurs, we will likely be told that the permanent energy crisis we are experiencing was a result of our not understanding energy or perhaps ignoring some obscure experts. We will likely be told that our energy policy of the past really was not an energy policy but that no one really knew what was happening at the time – that it was all just misguided, unorganized optimism and that we could not have done anything differently given the circumstances of the time. This is far from the truth.

In reality, all the information was on the table in the decade of the 1950s. Recoverable resource estimates in 1950s – which have proven to be highly accurate – indicated that we needed to be very careful with how we planned our future. Various experts including Hubbert, Pogue and Hill of Chase Manhattan Bank, and Andrew Crichton predicted that U.S. oil, natural gas, and coal resources could not possibly support a high growth economy for any reasonable length of time. A rational review of the recoverable resource estimates of the time suggests that we needed to begin a long term plan to create a sustainable society based on proven renewable energy sources.

Instead, key individuals in government, think tanks, and corporations opted to use their influence and decision making capacity to forward a perpetual high-growth economy dependent on high-grade finite fossil fuels in the hopes that technology would make low-grade resources economic over time. They believed that speculative technological advances including coal to liquids, oil shale, breeder reactors, fusion, and enhanced oil recovery would become economic in the long run, thereby justifying the continuing growth of a consumerist suburban, car-oriented way of life and fueling the development of a highly industrial globalized system for the rest of the world.

This imprudent technological optimism still continues today, with oft-unchallenged assumptions that many of the speculative solutions of the past and a few newer concepts (e.g., hydrogen, cellulosic ethanol) will be able to seamlessly replace oil, capture any carbon that is emitted in the process and eventually substitute any finite fossil fuel resource when its exhaustion is imminent.

In the next year, the Hubbert Tribute will begin the process of explaining how and why we are in the predicament we find ourselves in today. We will uncover articles and reports of yesteryear that forebode of today’s energy crisis. We will show the connections between some of the largest U.S. corporations, key government figures, and influential think tanks, and explain how they worked together to forward domestic and foreign policy that has us so egregiously dependent on oil and other dwindling fossil fuels. We will also explain the geopolitical circumstances that may have been used to rationalize these unfortunate decisions.

A prime example is a publication that came to the same conclusion as Hubbert’s 1956 speech and garnered even more attention from the media and policy makers – Future Growth and Financial Requirements of the World Petroleum Industry by Joseph Pogue and Kenneth Hill of the Petroleum Department of Chase Manhattan Bank. Chase Manhattan Bank is the world’s largest financier of petroleum development projects.

The Chase Manhattan report was published February 21, 1956 for presentation at the Annual Meeting of the Petroleum Branch of the American Institute of Mining, Metallurgical and Petroleum Engineers and was reported in the New York Times. Hubbert also referenced this paper in his 1956 paper “Nuclear Energy and the Fossil Fuels” for his seminal speech. As shown in the figure below, the report concluded that US production would likely occur between 1965 – 1970 based on the assumption that only 85 billion barrels of oil would be discovered in the lower 48 states after 1956. The report also indicated that the costs associated with expanding efforts to find and produce petroleum in the United States would continue to increase and require greater capital investment in the petroleum industry.

Pogue and Hill Oil Curve

Over the past six months, the Hubbert Tribute has been educating presidential candidate staff on peak oil and will be expanding this effort to include key congressional leaders on the implications of peak oil. Our aim is help increase the likelihood that the incoming administration and Congress will develop a responsible national energy policy in the United States.

To justify any change in our present system and to provide the foundation for the development of responsible energy policy, we have to start with the basics – where we are now with respect to oil , how we got here, and what options we have going forward. We call this Oil Transparency.

A comprehensive Oil Transparency strategy would include the best information about oil still in the ground, as well as an understanding of the assumptions that go into world oil production models, what exactly is defined as oil, and how quickly and economically substitutes can be produced. Oil transparency can include alternative sources (like shale, tar sands, etc.) but must also openly consider the ecological and climate consequences of turning to these sources. Lastly, we need to understand how we came to be in this predicament. Deciphering U.S. energy policy over the past six decades will help us understand how we arrived to this perilous situation and what kinds of changes need to be put in place to make sure that the mistakes of yesteryear are not multiplied into the future.

We no longer have the luxury of planning our economy around speculative technological advances that may never materialize or believing that vast of amounts of energy resources will discovered or will replace oil just because they exist or somehow they may be discovered. We need a responsible energy policy that addresses both peak oil and climate change that has proven technologies at its core and rational standard methodologies for estimating EROEI (energy returned on energy invested) and carbon emissions for all proposed alternatives. This is the leading possibility for a development of a responsible energy policy that will begin the transition towards a sustainable future.

About the Hubbert Tribute

The Hubbert Tribute is energy policy think tank and an online tribute to one of America’s greatest thinkers and scientists, M. King Hubbert (1903-1989). The tribute was first unveiled on the 50 year anniversary of Hubbert’s seminal speech in 1956 when he predicted that U.S. oil production would peak within 10-15 years. The purpose of this tribute is to raise awareness of and celebrate Hubbert’s accomplishments, so that industrial society can better understand the contemporary significance of his work. The Hubbert Tribute aims to uncover more contextual information about M King Hubbert’s work and to better understand how U.S. energy policy was architected over the past half century as well as to help guide policymakers toward a sustainable energy policy.

Over the past six months, the Hubbert Tribute has spoken with staffers with every major presidential candidate and provided information on peak oil. We have worked with renowned energy experts including co-authors of the DOE funded “Hirsch Report” Roger Bezdek and Robert Hirsch, and former industry expert Jan Lundberg among others to provide briefings to the campaign staff of presidential candidates. The Hubbert Tribute is partnering with Inspiring Green Leadership and other peak oil experts to offer webinars and briefings on peak oil and climate change to all presidential candidates with the aim of getting these issues on their radar − if not their platform.

Please contact about internship and volunteer opportunities, as well as about donating to this essential work.

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Published in: on March 8, 2008 at 11:58 pm  Comments (12)  
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12 CommentsLeave a comment

  1. In fact Hubbert referenced the Chase Manhatten article in his 1956 paper.

  2. Interesting. How could I have never heard of this before? Where did this come from?

  3. I want to add to your “various experts” comment:

    I’m a lay observer of peak oil, but I have been fortunate enough to have had a great geology professor, Craig Bond Hatfield, who was one of the lone voices in the 1980s warning of the current crisis.

    I never learned of peak oil in his classes, but later came to know his writings, after I got acquainted with the term.

    He wrote articles for various newspapers and Nature magazine, anticipating to the “T” the crisis we have on our hands today.

    Let’s not forget the testimony of such people as Hatfield. These voices were “crying in the wilderness” long before “peak oil” was even a term.

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  5. Excellent article, and site. Thank you.
    Perhaps we should resist the temptation to criticize and condemn national and world leaders of the mid-twentieth century.
    They were confronted with enormous challenges after WWII, not least of which were global dislocations and reconstruction, and widespread layoffs(US) after war production ended. Perhaps the burden of responsibility rests with the boomers (myself included), who “went along for the ride”.

  6. > Interesting. How could I have never heard of this before? Where did this come from?

    As Joe McMullen noted in his comment, Hubbert referenced this paper in his 1956 paper “Nuclear Energy and the Fossil Fuels” for his seminal speech. I have updated the article to reflect this.

    Many people have not heard about this or the many sordid tales associated with U.S. energy policy history because of the disconnect between science and social history. The majority of people in the peak oil movement have focused their energy on the science and what can be done. At the Hubbert Tribute, we believe that we ALSO need to better understand the path we have traveled to inform our current and future decision making and help develop a mandate for responsible energy policy now. The age old adage “Those who cannot remember the past are condemned to repeat it” (George Santayana, 1905) certainly applies.

    We believe we need to fully understand the discourse or patterns of thinking within which we are operating. Paraphrasing Einstein, the significant problems we face cannot be solved within the same discourse that created them.

  7. Where there is no insight, the people perish!

  8. Dear Jason Brenno and David Room of the Hubbert Tribute,

    Execllent articles. Thank you. May I offer an alternative reason for “the geopolitical circumstances that may have been used to rationalize these unfortunate decisions”

    My view is based primarily on the belief that most major acts of terrorism, including the attacks against America on 911 have been sponsored by those who control governments. Terrorism and crisis are primary tools of governmental control. They are historically used to manipulate populations. If you do not appreciate those facts, you are likely to spend a lot of effort spitting into the wind while trying to get the bad taste of peak oil out of your mouth.

    What follows is the outline of my thesis that the approaching energy crisis is intended as just such a tool of control and manipulation. If you find this idea of some interest, I’d be happy to email or post a fuller discussion containing sitations to supporting materials. At this time I do not maintain a proper website on which to post the complete document.

    Here’s the substance of my thoughts. Thanks again for your research and efforts, and best wishes.


    The coming Energy Shortage is well planned. Crisis is intended. It will enable the ruling elite to control the public and manipulate support for wars designed to secure sufficient global control of strategic resources to ensure their rule over the world.

    One question has bothered me continually in regard to Peak Oil. Why wasn’t our government preparing the nation for a smooth transition to alternatives? If a typical citizen can see the energy shortage coming, then our political leadership can see it too.

    Yes, there are a few political voices in the wilderness like congressmen Roscoe Bartlett, Wayne Gilcrest, and Tom Udhal of the Congressional Peak Oil caucus. However, most of congress is quiet on the issue of peak oil. Global political leaders mention it, but raise no alarm. Ultimately, most of our populace remains unprepared.

    Why is there not a major program to prepare the nation and the public for the crisis ahead? Indeed, why have our national policies over the past few decades served to make the U.S. ever more dependent upon foreign energy sources?

    To say, as many do, that it is not politically expedient for a politician to deal with a crisis before it arrives; is to say, in essence, that we lack leadership. I only wish our situation was that simple? Unfortunately, the more probable conclusion is that what we face something much worse than a lack of leadership. We face powerful leaders with evil intent.

    U.S. policy is being controlled by very purposeful leadership. The problem is that those who control our national policy are not our elected officials. Worse, they intend for Americans to experience crisis. Indeed, they need crisis, because they are planning war.

    The American public will face the energy crisis –purposefully unprepared, because those directing U.S. policy intend for crisis’s to occur. The deeper the crisis, the better suited energy shortages will be as a tool of political manipulation. Since tools of political manipulation are highly sought by those seeking power, the looming energy crisis is likely to be severe.

    Energy and economic crisis will serve at least two great purposes. First shortage and crisis will be used to further consolidate governmental control -especially over the American people. Second, fuel shortages and the social-economic crisis that will result will be used to motivate Americans to go to war. Those who are driving US politics plan war to ensure their control of the world’s remaining strategic resources. Liquid fuels will be among the chief strategic prizes because liquid fuels are critical to mobilize a modern military force.

    Ultimately, around midcentury, North America’s immense riches in unconventional fossil fuel resources will enable the elite to implement a long term strategy to control the world. America’s current actions in Iraq and Afghanistan bear partial witness to the ruling elite’s multi decade plan to control and/or drain the conventional liquid oil resources of the Middle East and Central Asia. By midcentury, the entire world will be surprisingly dependent upon liquefying the unconventional North American fossil fuels that remain.

    Basically, those who control US policy plan to let energy shortages stop American cars and trucks, bring down our power grids, and leave our homes dark and unheated –long enough for the public to demand action. When the American public is crying for action, “evil” foreign oil producing countries will be made the scapegoat. We will be told that certain oil producing nations have plenty of oil but are greedily withholding their bounty with no regard for the pain, suffering, and death of Americans and of the American economy.

    Any country rich in conventional oil that does not cooperate with the ruling elite’s plan for global domination will be blamed for our troubles. War will be promoted as the solution.

    The controlling elite have known for decades that oil would eventually be in short supply. See Further, they have been acting on that knowledge quite forcefully- as in Afghanistan and Iraq. An unpublicized energy policy is being implemented. The plan of U.S. power brokers is evident to the careful observer. They intend to control and drain the conventional (liquid) oil resources of the Middle East and Central Asia, while the U.S. preserves most of its remaining conventional oil.

    In due course, Middle Eastern oil will be depleted. Then, around the middle of this century, the majority of the worldwide production of liquid fuels will come from unconventional fossil fuels. The unconventional fossil fuels which will remain long after conventional oil is depleted will be almost entirely within North American grasp. Those unconventional fossil fuels – from which liquid fuel can be synthesized, are Canadian tar sands, US oil shale, Venezuelan extra heavy oil, and North American coal. The majority of each of these resources will be solidly under the control of a North American government.

    The Hirsch report calls for a prompt and massive unconventional synthetic fossil fuels construction program. What Hirsch does not mention, is that in 4 to 6 decades, when conventional oil production is down to less than half its current level, from today’s 75 GB/yr (billion barrels per yr) to less than 40GB/yr, liquid fuel production from North American unconventional liquid fuel sources will exceed the rest of the world’s conventional oil production.

    The future will therefore hold a dramatic turnaround for American prospects, from a declining -even a collapsing American economy during the next two decades, to an ascendant powerful North America by midcentury. The future economic turnabout resulting from combining our military superiority with immense North American fossil fuel reserves will likely be stunning. Near the middle of this century North American fossil fuels will be the source of the majority of the world’s fossil fuel liquids.

    Though the Middle East currently holds nearly 2/3 of the world’s conventional oil supplies, the world’s annual conventional oil production will diminish to less than half of its current production in just the few decades between now and 2050. The declining supplies of conventional oil (liquid oil flowing from wells) will be replaced by liquids synthesized from unconventional fossil fuel resources. At midcentury North America (together with Venezuela) will hold 80+% of the recoverable world resource base of these unconventional fossil fuel resources.

    The ruling elites have not only been planning America’s response for decades past, they have also planned their energy strategy far into the future. Around the middle of this century, North America will become the undisputed world leader in liquid fuels production. Until then, the ruling money powers intend to manipulate the politics, military and energy reserves of North America so that our military and energy resources can be used to consolidate their control over the world through a planned world government. Liquid fuels are a prerequisite to utilizing military might; those who control liquid fuels will achieve military domination and ultimately hegemonic worldwide political control.

    The U.S. already has by far the world’s largest most powerful military. By controlling global access to liquid fuels, the elites will be able to prevent any military challenge to its supremacy. Those controlling liquid fuel production will constitute a de facto, and likely overt, world government.

    However, control of the American military is necessary. The support of the American people for war, or at least our tacit consent to war, is critical to their plans to control the world’s strategic resources. It is largely the coming energy crisis that will be their tool to gain popular support. The bigger the energy and economic crisis, the more support there will be for wars promulgated as a means to resolve the crisis.

    The existence of great fossil fuel reserves in North America will enable those controlling them to secure control over the liquid fuels necessary to mobilize military forces. Toward that end, the coming U.S. energy (and economic) crisis is planned as a tool to consolidate the globalist elite’s control over the American populace and to motivate Americans to support yet more foreign wars over oil. The greater the coming energy crisis is, the greater will be the average citizen’s motivation to support foreign military intervention and to acquiesce to ever broader restrictions of our own liberties.

    The rest of this essay addresses historical examples of how governments use of crisis and terror to manipulate public opinion.

  9. Peak Oil is a permanent catastrophe, read this report to see why:

  10. This is a great blog, lately the topic of peak oil is an everyday water cooler topic here at work, and I work for the government. It is odd that people do not realize how much a part Petroleum plays in their lives. Fact is when peak oil really comes to our door steps this blog will probably not even be able to function. Petroleum is used in nearly everything we use today in some fashion. Food, machines, power generation, clothing, shelter – everything. As of the year 2002, approximately 10 calories of fossil fuels are required to produce every 1 calorie of food eaten in the US ( I think the survivors of all of this will be folks who own land and lots of it. $5.00 a gallon gasoline is just the begining my friends.

  11. There is a Peak Oil conference in Grand Rapids this weekend for anyone near it.

  12. […] predicted peak oil in 1956.” Channeling Hubbert: deciphering our energy past, present and future. March […]

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