A lot of people have been talking for a long time about peak oil — the idea that we’ve pretty well used up the half of crude oil in the Earth’s crust that’s easy to get at; the rest will be more difficult and more expensive to get to, and will be extracted more slowly. M. King Hubbert famously predicted in 1956 that these factors would lead to a bell-shaped curve of oil extraction, and his predictions for US oil production were borne out when US production peaked around 1970.
Now it seems that the International Energy Agency, which has traditionally been pretty bullish on oil supplies, has admitted that world oil production peaked in 2006. Of course, many experts have previously estimated that oil peaked around 2005/2006. It’s a little more surprising to hear it from the IEA.
What’s really interesting about this graph is that is appears to be drawn from the demand point of view. Clearly, global demand is increasing, so the top line should go up; if conventional oil has peaked, that means that the “currently producing” line must go down. In between is a big gap, which the IEA fills with a couple of increasingly important oil sources: “fields yet to be developed” and “fields yet to be found”. Those may be convenient fillers, but are a tad on the optimistic side. After all, crude discoveries have been falling since the 1960s.
I don’t want to sound too pessimistic, but I fear it could be a bumpy ride.