Investing The Peak oil crisis has be.e a major phenomenon. There is a fall in crude oil exports when domestic consumption in the oil exporting countries increases. Extraction of oil be.es a .plicated process and there is a decline in worldwide oil production. Oil is extracted from the surface where it is easier to reach and it can be easily refined. Production of crude oil initially starts at a lower level and increases as and when more oil wells are dug. Crude oil is so significant that it has a great impact on the economic stability, food production, transportation and trade. The Pressure in the older oil wells start declining as more water gets mixed along with the oil. To maintain the pressure, oil .panies’ use advanced and new production techniques and they start digging more oil wells. Shifting from easily sought oil fields to difficult areas for extraction of crude oil demands more investment, modern techniques and more engineers. The cost of extraction soars high, which ultimately increases the cost to produce crude oil. When the cost of oil production exceeds the oil’s worth then production is stopped. The drop in the production level occurs when Peak oil is reached. In the year 1956, the renowned geologist, M. King Hubbert used the logistic theory, which is famously known as the Hubbert peak theory (bell curve) to envisage that United States oil production for all the 48 states would peak between 1965 and 1970. His prediction was proved right when U.S experienced the Peak oil phase in 1970. The crude oil production rate in a country or region, which has individual wells, is determined with the help of the Hubbert peak theory. The rate of crude oil production in an individual oil field or rig grows rapidly until it peaks at some point and starts declining. Various political, economic and geological factors influence oil production. Different modified versions of Hubbert theory are applied though the fundamental features remain constant. The Hubbert peak theory is applicable not only to crude oil but also to natural gas, coal and so on. Fossil fuels, which are finite, may be replaced with alternative energy resources proving to be helpful but it is difficult to predict when and how this will happen. More energy and money are required to extract non-conventional oils. If the prices for natural gas, coal and other non-conventional resources increase then the technology that is being used for research and development would be expensive to the same extent. Even if new technology is used, a solution for Peak oil may not be possible as the quality of the crude oil that is being extracted from remote areas may be low. A positive implication is that oil production would increase if the crude oil prices shoot up and it would encourage investment in new technologies that can be implemented and also the extraction process will be.e more efficient. About the Author: 相关的主题文章: