Peak oil means that the rate of production is set to go into permanent decline and the price of oil is set to become extremely volatile, as a cyclical wave of super-spikes to kill off demand lead to sharp recessions and a downward grind in material standards of living.
We just saw the first iteration of this trend in 2008 and 2009.
Trivially true, but not necessarily helpful. No one is suggesting that dwindling oil supply means we'll be going back to pre-industrial technology levels (well, no one sane, at least). The concern is potential economic shocks due to large increases in the relative price of oil and, by extension, oil-derived goods including anything that requires long-distance shipping.
It's a legitimate concern, but probably overblown. With a sufficient range of alternatives, the inevitable price increases are likely to be gradual and steady, giving plenty of time to adjust. Anybody heavily dependent on cheap transportation is probably still screwed in the mid-to-long term, but at least they'll have time to fail gracefully rather than crash and burn overnight.
There is no guarantee that the price increases will be gradual. If exporters of oil all have low time preference (which they do), then plummet could come very suddenly as wells start to go dry with no replacements (eg, an 80% drop off over a ten year period). There is also no guaranteed that we'll be able to find a suitable replacement. Only nuclear has anything close to the EREOI of oil, and nuclear plants takes a lot of time to build.
There is also oil which requires more energy to extract than it contains (beyond which you'd only do it because you need some energy stored in liquid form).
I can't find the reference, but I think there was a French study in the 80's that claimed at $200/barrel it'd be economical to make liquid hydrocarbons for energy using air and nuclear power.
Using the current population numbers always seems odd. At the current population growth rate does that mean we have only some much smaller amount, say 40 years left?
I don't believe anything in these articles says that peak oil isn't a reality, they only push back the peak. The only thing that could refute peak oil is confirmation of abiotic oil production. http://en.wikipedia.org/wiki/Abiogenic_petroleum_origin
Off topic: [E]ngineers at Royal Dutch Shell (RDS.A) have applied for a patent on a new method of extracting shale oil cheaply and cleanly.
How is this different from granting a patent on software that extracts data cheaply and cleanly?
Patents are only granted on specific implementations, not ideas.
So, if granted, it wouldn't be a patent on any better extraction method, but only on their particular method of increasing efficiency. (say, the use of a particular additive in the slurry or what-have-you)
In practice "peak oil" is more a political catchphrase than anything else. Objectively, the concept is both true and obvious. Yes, finite resources are finite and if you keep using them they'll eventually run out. Not exactly rocket science, there. In practice, it mostly gets discussed because people like to worry over impending catastrophes, especially ones that can be blamed on people they don't like. It's really just not that big of a concern.
Oh, and abiogenic petroleum is pretty much crackpottery, so that doesn't help.
> if you keep using them they'll eventually run out
Peak oil isn't about oil running out. It's about the rate of production going into decline and the economy struggling to handle extreme oil price volatility.
Seriously. Not only will buying oil futures make them lots of money if they're right, it will help raise the price of oil, thus driving investment in alternative energy. The peak oil people don't get it: higher oil prices aren't the problem; they're the solution.
There are ETFs (exchange-traded funds) called OIL and USO which track the price of oil and oil futures. You can buy them through, e.g., Scottrade, the same way you buy stocks. Or you could just buy stock directly in oil companies, which would certainly expose you to the future price of oil.
It may seem like a sure bet that oil prices will rise, but the return would have to compensate you for (a) the opportunity cost and (b) the risk that you're wrong. Peak oil alarmists imply that the current prices don't accurately reflect future scarcity, so they should be able to make a killing in the oil markets and encourage conservation (by making current oil more expensive) at the same time. But if they don't have the confidence to put their money where their mouth is, they really should have the good sense to shut up already.
N.B. I do know some peak oil types who are long oil, and I respect them greatly for it.
I think part of the problem is that at the more extreme end they think that the world economy is going to collapse, so that if they're right, there will be no way those contracts will be honoured.
Keep in mind, though, that when you buy a future, the price of that future already has expectations factored into it.
It's very easy for individual traders to get slaughtered in the futures markets; you're essentially betting against other market participants, some of whom may have vastly better access to information than you do.
I would be very wary in assuming that the market is underpricing something based on information in the Guardian; it's fair to assume other market participants read it as well, and the information has been built into the prices already by market makers.
Interesting timing with Copenhagen looming. I'm usually the first person to talk about the potential risks of the oil crisis, but I think think this article is geared more towards the climate change talks than a serious analysis of the oil issues.
If you're talking about the dark blue part of the graph, that represents currently active oil fields only, so of course it's going to drop starting the day after the graph was made because it's defined to exclude new production capacity!
The light blue apparently represents the expected production from known but untapped fields, so the dark and light blue combined represent current known oil reserves, and don't show any spurious drops.
