Peak oil? Not yet
The theory of peak oil has been bandied about for more than 100 years. It was brought up to date by King Hubbard back in the 1950s, when he correctly predicted that peak oil production in the lower 48 states was less than a couple of decades off. Since then others have used his methods to predict--sometimes to the day--when global production would peak, leaving less than 50% in the ground.
The theory periodically comes into fashion. The respected journal Nature has a fine article on the history of peak oil predictions, as well as the pros and cons of the theory:
[...] Matthew Simmons, an energy investment banker in Houston, Texas, and self-described "petro-pessimist", argues that the world's great oilfields are moving quickly towards the end of their production, or have already passed into rapid decline. The North Sea, for instance, is the only place that a significant new discovery has been made outside of nations in the Organization of the Petroleum Exporting Countries (OPEC), Russia and Alaska in the past four decades. It is now in eclipse — production in the region peaked in 1999, which is earlier, Simmons says, than expected. The United Kingdom no longer exports oil, he notes, and production in Norway — the North Sea's long-term stalwart — is also declining. And no new giant oilfields are taking the place of those that have already passed their peaks, says Simmons.The article notes that predictions of peak oil have come and gone many times. To be sure, the time when more than 50% of the world's petroleum has been produced is coming. However, given continued improvements in extraction technologies, the lifetimes of many producing fields can be greatly extended. New search techniques will also lead to many new discoveries.
Some people think that the declines we are seeing are indicators that the world is on the verge of, or has already passed, the maximum amount of oil that can physically be produced. In their view, oil production follows a bell-shaped trajectory, with the peak occurring when half of the total reserves have been consumed. Therefore, it should, in theory, be easy to determine whether the peak has already occurred or whether it is yet to come. Total up the world's oil reserves, estimate the rate at which countries have produced oil, and you'll know where you are in the trajectory. If the reserves are more or less equal to the amount already pumped, then production is at its peak.
[...] But some don't accept these premises. To them, these arguments are simplistic geological determinism that does not take into account the role of oil prices. To the dissenters, reserves are not a geological given but a function of the current price and the extraction technology that price can buy. New reserves will be developed as the market demands.
Meanwhile, a study from energy analysts Cambridge Energy Research Associates (CERA) in Massachusetts sees no sign of any peak in production occurring before 2030. And, crucially, CERA doesn't see a peak with a steep downside — rather a crest followed by an undulating plateau [...]
As the great oilfields of the world age — most of them are now undergoing secondary, if not tertiary, extraction — other discoveries could help to plug the supply gap, argues Jackson [a petroleum analyst]. In 2000, an analysis by the US Geological Survey of petroleum reserves estimated that there were 1 trillion more barrels of oil worldwide than previously thought. The survey estimated that any worldwide peak in oil production wouldn't happen until 2030 at the earliest. In part as a result of the high prices of the past few years, roughly 500 oil-development projects are slated to start producing oil in the next five years, says Jackson, and these will range in size from an estimated million barrels per day down to 10,000 barrels per day. [....]The article goes into much greater depth on the various arguments. But one thing it doesn't mention is how many of peak oil supporters are currently buying oil futures, in other words, putting their money where their mouths are.
Peak oil is assuredly coming but likely not for some decades. Prices are currently high because demand is outstripping available supplies. Our available supplies are unable to keep pace because production is too low, not due to the lower overall level of petroleum in the ground.