FORECASTING ULTIMATE RESOURCE RECOVERY

This paper considers Hubbert's model for forecasting ultimate resource recovery and its extensions by Kaufmann (1991, Resources and Energy 1 3, 111-127) and Cleveland and Kaufmann (1991, Energy Journal 12, 17-46 ). The emphasis of the paper is on econometric and forecasting issues, and it discusses alternative methods of estimating Hubbert's model. U sing data on oil production in the U.S. lower 48 states, the paper rep orts the results of estimating the various specifications of the model and its extensions by the maximum-likelihood method, and provides the implied estimates for ultimate resource recovery and their associated standard errors. When economic factors are taken into account the est imates of ultimate resource recovery become state-dependent, and we fi nd that in this case the estimates are higher than those obtained from the various specifications of Hubbert's original model. Although the accuracy of the estimates of ultimate recoverable reserves cannot be e valuated before oil reserves are actually exhausted, we examine how th e various models estimated over the periods 1926-85 and 1948-85 perfor m in predicting oil production over the 1986-90 period.