Originally, the concept of peak oil was an economic disaster type thing where demand was skyrocketing, but all the oil had been found; causing major industry and world political upheavals. Now, many talk of peak oil as just producing less because we don't need so much in the future, due to efficiencies and alternates like battery cars. That type of "peak oil" is not a disaster scenario. So, what type of "peak oil" scenario should be addressed? The latter may happen soon (or has already happened), but the former is probably a long way off.
Oil suffers from a fairly inelastic supply equations, but also suffers from a fairly inelastic demand, which causes the wild fluctuations. For example, new large developments can take 6 to 10 years to come on line from first discovery, so that's the inelastic supply. On the demand side, when prices go up, all those people driving enormous F-250's don't just run down to the dealer and trade them in for a Prius. They wait a few years until the thing's got a lot more miles and years on it and then consider a more efficient vehicle for their next purchase. So, lets set aside all these wild near-term swings and looking at the long-term picture.
As oil reserves deplete, the new ones coming online cost marginally more to produce. That is, most all the "easy" oil has already been found. So the "next" barrel of oil comes from a deeper offshore well, that costs more to produce. And then it comes from very remote fields that need to invest in an FPSO. And then there are marginal fields with smaller reserves that takes more wells and moving production equipment, which increases the cost. And then lower quality reserves. I've done test projects with extremely heavy weight API crudes in Brazil. We had to steam trace all piping and vessels to keep it from turning to asphalt inside the equipment; in addition to submersible pumps to push the sludge up to the surface. All that equipment costs money and marginally drives up the cost for each barrel produced. But we proved it CAN be produced at a higher price. When the price gets higher, then they will do that. Similar for oil sands and oil shales.
So, not surprisingly, there is more petroleum liquids out there that can be brought to the market at ever increasing marginal rates; which is the way everything works in economics, so I don't understand why all these oil expert pundits can't see that. And when the cost of liquids creeps up too high, demand will make it affordable to shift more to battery cars or, hell, even back to CNG/LNG vehicles (remember those?). So, IMO, we are a long way off from peak oil disaster scenarios, but will see an ever increasing average cost which shifts supply to ever marginal developments and shifts demand to ever marginal efficiency gains and alternatives for a long time. Duh.
