It's actually a bit more complicated than that. The two factors you need to keep in mind are "oil production price" and "energy return." History shows us that over time, oil energy return decreases and production prices increase. Both of these are fairly clear trends as indicated by current prices and declining EROEI.
What makes this important is:
1) The world's transportation system is extremely dependent on liquid hydrocarbon fuels.
2) Any given product from the a supply chain depends on:
A) cheap transportation (i.e. cheap hydrocarbon fuels)
B) cheap energy (i.e. electrity and heat)
C) other supply chains that provide parts, infrastructure, transportation, communication, etc.
The problem is that as oil gets more expensive (forget running out, it never happens), and the energy return drops,
there comes a point where it's no longer possible to keep the world's supply chains running.
First the peripheral chains of less essential goods drop out, but eventually,
even the supply chains that maintain the process of energy production are no longer sustainable. If nothing is done to mitigate that problem ahead of time, we see a cascade failure of supply chains tha happens suddenly, and from the viewpoint of our human lifetime, irrevocably.
It's not a problem with
oil, it's a
systems problem of effectively using energy to keep goods and services moving in an organized way at a scale sufficient to keep everyone fed and clothed and sheltered from the environment. We can slow this down with conservation and the greater use of natural gas and coal, but in an international free market capitalist system, we can't really stop it. There's always someone willing to buy, regardless of consequences to others.
And this, in a nutshell, is the problem of peak oil.
Currently, we have cheap oil enough left for about 40 years, assuming we all share and share alike, no country hoards, the Middle East stays quiet and we all sing "Kumbayah." If the 45 - 75% actual recovery vs. technical recovery ratio holds (
http://en.wikipedia.org/wiki/Extraction_of_petroleum), we run out of the good stuff in 20 - 30 years. Well, not run
out exactly, but we'll be on the long tail. There'll be oil here and there, just not enough to run an industrial civilization at the present scale.