Consensus definition: The theory of “peak oil” is the point where practical oil extraction has reached its maximum level and is entering a state of permanent decline. Because the geological processes through which petroleum is created operate on a vast time scale, it is considered to be a finite resource. Experts differ on whether most oil producing nations have already reached their peaks in oil extraction.
Peak oil is a popular phrase that’s used today to represent the idea that globally we’re starting to run out of oil.That is there is kind of a bell shaped curve worth of easily accessible oil present in the earth, we’ve not, or sometime in the near future, in the recent past, hit the top amount of that oil which is available, and as demand increased right past what is available, so demand is not based on how much supply is present there.Demand is inelasting.And so, from the standpoint of what people are seeing, it looks like there’s plenty of oil left in the ground.On the other hand, I’ve read that the OPEC nations, Saudi Arabia in particular, has been pumping salt water down their oil wells for some period of time to keep their production up.That isn’t any indication that there’s going to be tons of oil in the future.As a matter of fact, if you look at the size of oil fields that are being discovered now versus what was discovered 20 years ago, the size of the oil fields are getting progressively smaller, which would indicate that we’re on the downhill side of when the peak amount of oil, readily accessible oil, is available.
As we run out of readily accessible oil, certainly other kinds of oil will be developed, for example, oil shale.That, however, will be more expensive and a different grade of oil than we’ve been currently getting.