At one point, about 4 or 5 years ago, I read an article about "peak oil". Are we any closer to that now?

Question

The term was used in the 70's when it was initially first reported. From what I remember of the article, it is supposed to spell the downfall of our "civilization". Oil will be unobtainable, services will be halted, all h**l is supposed to break loose, sounds fun.

Answer 1

No, its the point, when demand outstrips supply. That point was reached approximatly around 2005.

Daily output worldwide is at a maximum of 28 million barrels, 18 million of them go to the USA, the other 10 million go to the other 220 countries on earth (see an imbalance).

Now, with China and India's economy going like gangbusters, they will compete for the oil, that's why it will go from now on only up. The highest bidder gets the oil and China has the money.

Answer 2

"Peak Oil" refers to a hypothetical point in world history in which world oil production begins to terminally decline until the world's oil is completely used up.

I personally do not believe in the concept of "peak oil." The term was developed in the wake of the 1973 oil crisis, when OPEC used its market power as leverage to increase world oil prices and increase their profits.  This of course led to a drastic increase of the price of gasoline and other oil products whose effects were immediately felt throughout the world.  Simply stated, the term played on the troubles experienced by people at the pump in response to a one time shock.

Personally, even if "peak oil" is reached, it will not "spell the downfall of our civilization."  As society has done in the past, it will respond/adapt to a resource constraint and mitigate the effects of a declining supply of oil.  Whether it involve developing technology that is more fuel efficient, switching to alternative forms of energy, or both, society will essentially deal with it.  

Just think about our current times; SUV sales are down (GM is thinking about giving up on Hummer), fuel efficient car sales are up, many countries are taking initiatives towards developing alternative fuels (lets just forget about ethanol subsidies and their effect on food prices for now) and it looks like Green is now everyone's favorite color.

Answer 3

peak oil is the point where we begin to consume oil faster than we can hope to discover it and produce it in its consumable form.  Its the begining of the end in terms of oil being our main source of energy for transportation and other purposes.   The concept is that there is a bell curve, and when we reach the peak of it, we will see certain phenomena in pricing and availability that might be considered negative by some people.

What we are constantly being reminded of lately however, is how the rising price of oil leads to a circumstance where investment in alternative forms of energy, both production of that energy, and the adaptation of things like cars and heating systems to use that new form of energy, really take off.

So since carbon emissions seem like such a danger in the long run, and since we have known for a long long time that oil will be consumed faster than it is made available at some point, some people feel the important thing is that we know when we reach peak oil, and that the pricing of oil is allowed to naturally rise so that we have economic incentives to replace it with other forms of energy and alter our consumption of energy to improve on our situation.

so, at a given price, oil consumption will slow, and investment in alternatives will increase at a faster and faster pace.  What we need are policies that recognize that the day is coming when oil will no longer be available in sufficient supply to affordably operate our businesses, transport people and goods, and heat our homes.  Our policies need to be oriented toward assisting the open market process to operate smoothly and without catastrophic events.   One such suggestion of late is to limit the ability for speculation in oil on margins.  this seems a reasonable idea to explore, and some economists predict a substantial impact on oil, lowing its price a great deal.   the challenge with these kinds of ideas is to anticipate the unintended consequences, and it's why we don't rush to act too quickly to impose limits or remove incentives or tax windfalls etc.  You have to think things through to avoid creating larger problems than the ones you seek to remedy.

I believe the american free enterprise system will solve the oil/energy problem.  My hope is that we solve it with something that has lower environmental impact, and is more sustainable than some of the alternatives being discussed.  But we will all collectively determine these things by our reaction to products and services that emerge in the coming months and years.

We can survive the decline in oil production vs demand quite nicely if we act prudently and promptly, but refrain from panic.