What we need to know about Peak Oil
World Oil & Gas Depletion [courtesy ASPO]
The story of the late nineteenth and the entire twentieth century has been largely the story of petroleum, its discovery and use by humans, and the social and cultural consequences in human society. The story of the twenty-first century will be the story of the terminal phase of petroleum and the invention of new patterns of human living in relation to the Earth's resources in the post-petroleum period. From its beginning in the mid-nineteenth century to its terminal phase, the role of petroleum will have lasted 200 years, from the mid-nineteenth to the mid-twenty-first century. These years, the glory years of the industrial period and the devastating years of the Earth, might be designated as the Petroleum Interval.
Oil is the maker of the modern world
The most energy-rich and versatile fossil fuel has a potential for generating conflict that led to it being called the ‘blood of the Earth’.  Now many petroleum geologists consider the peak of global oil production is already appearing [3,4]. What does this mean for a globalized economy and a climate and natural world under threat? Kevin Philips, a leading American political analyst, considers the significance of this transition for his own country:
Over the last several hunded years, each leading global,economic power has ridden an emergent fuel resource into the pages of history. The world's age of oil has also been its era of American supremacy. The U.S. is a longtime oil power, and the aging of its energy infrastructure, guarded by a globally aggressive, entrenched-interest political coalition, is a harbinger of costly confontations and military embroilment, likely to lead to national decline. America's prevailing 20th century corporate, transportation, energy and residential infrastructure was shaped around petroleum. Americans constitute the world's most intensive motoring culture. The politics of oil dependence in the U.S. is ingrained and possessive - a culture of red, white and blue assumptions of entitlement; a foreign policy steeped in covert petroleum emphasis and a machismo philosophy of invade-and-take-it. 
How do we define "peak oil"?
In an oil reservoir, oil and gas are trapped under very high pressure in tiny interconnected pores. When a well is drilled, there is a big difference between the underground and surface pressures [about 4500psi vs 15psi]. This forces the oil up the pipe. As it begins to flow, reservoir pressure drops. In due course, it fails to lift an approximately 10,000 foot liquid column, leaving half the reservoir’s oil behind in the ground.
A typical oilfield has multiple wells. As more are added, production rises to a peak. Then it falls as pressure drop begins to limit oil recovery. In the North Sea, production at the ‘Forties’ oil field grew for 5 years. It then declined over 25 subsequent years.  Such a scenario holds true for the total oil production of entire geographic regions. Accordingly, the date of peak production for the ‘lower 48’ American states was accurately predicted by a Texan oil geologist, M. K. Hubbert. Hubbert’s method established that, from well to oilfield, and from continent to globe, ‘Peak Oil’ occurs at the halfway point of total production. This is an unwelcome scientific fact for the world’s most powerful industry, economists, governments and media outlets.
Peak Oil matters so much because it signals the end of the industrial growth economy, since that that titanic enterprise is based on the extraction and combustion processes of "Big Carbon" addiction. Furthermore, it is a crucial fact that authentic solutions to peak oil and climate chaos overlap and support each other. Modelling of peak oil indicates that large-scale oil price volatility will become the norm. This is already happening, as Jeremy Rifkin explains:
Two spectacular failures, separated by only 18 months, marked the end of the modern era. In July 2008, the price of oil on world markets peaked at $147/ barrel, inflation soared, the price of everything from food to gasoline skyrocketed, and the global economic engine shut off. Growing demand in the developed nations, as well as in China, India, and other emerging economies, for diminishing fossil fuels precipitated the crisis. Purchasing power plummeted and the global economy collapsed. That was the earthquake that tore asunder the industrial age built on and propelled by fossil fuels. The failure of the financial markets two months later was merely the aftershock. The fossil fuel energies that make up the industrial way of life are sunsetting and the industrial infrastructure is now on life support.
Tar Sands: game over for the climate?
Under the pressure of approaching peak oil, large corporations are already engaged in oil production from tar sands in Canada, and are planning further expansion. The energy needed to extract this product results in greenhouse gas emissions per barrel far greater than those of conventional oil. The spread of tar sands exploration and production is already destroying forests and impacting local wildlife and communities. A quarter trillion dollar investment is required to bring production up to four million barrels of oil per day from the current levels of one million.
Peak Oil is provoking disastrously misplaced investment in extreme oil extraction like the tar-sands
After Peak Oil occurs, global oil production will enter terminal decline
Production rates will turn down on a bell-shaped curve. It is not the case that oil will suddenly run out, but that the supply of cheap conventional oil will drop, while demand continues. Oil prices will therefore rise dramatically, until this temporarily destroys demand; as has already been demonstrated in 2008. Since our contemporary transport, agricultural and industrial systems are based on a steady supply of cheap oil, a post-peak production decline will precipitate a very long-term depression of the current economic system. Large-scale investment in renewable energy sources is one practical response, and has been successfully by the Swedish government.  A well-reasoned international solution would be to adopt a global Oil-depletion Protocol . That would avoid further oil wars, and mandate a well-planned transition to clean and renewable energy.
We are witnessing the end of the "Petroleum Interval"
Even the hugely influential International Energy Agency, which has consistently behaves as an advocate for fossil fuels, has finally acknowledged the impending fact of global Peak Oil. In 2009, the agency's chief economist, Dr Fatih Birol, stated that global oil production was likely to peak within 10 years and that governments were woefully under-prepared for that eventuality. The IEA's latest assesment of 800 oil fields shows a global average rate of production decline of 6.7% per year.
The Petroleum Interval is coming to its termination phase within the lifetime of persons living in the present. Yet there are still some years when we can prepare for a future without petroleum. Of singular importance is the need to develop new forms of energy that are within the limits and restraints of Nature's cycles. 
1. Thomas Berry The Great Work
2. Dilip Hiro Blood of the Earth
3. David Strahan The Last Oil Shock
5. Kevin Phillips American Theocracy
6. Commission on Oil Independence Making Sweden an Oil-free Society
7. Richard Heinberg The Oil Depletion Protocol