Barreling Toward Peak Oil

People throw around the term “peak oil,” but that doesn’t mean the system will run out of oil. It means the amount of oil you’re gaining by finding new oil fields—and bringing them onstream—is equal to the losses you’re taking as other fields run down. The U.S. was the first country to peak in 1970, but that was a seamless transition since the oil companies just brought in more oil on tankers. Now the U.S. is importing about 67 percent of its oil.

The business of peaking is now usual: There are 30 non-OPEC countries with significant production. Thirteen of these have peaked or are about to peak, and they contribute some 52 percent of the oil volume outside OPEC.

World oil production will peak sometime between 2015 and 2020. The plateau should last for three to five years. The price will go up, since the supply isn’t rising and demand will be strong. That will scare people.

Bloomberg