Peak Oil

Another less talked about threat to energy supplies is that oil will eventually run out. The question is simply when and how fast? And it could be sooner than you think.

Supply and demand

The first giant oil wells were discovered in the 1870's. Ever since, the world's use of energy has risen in direct proportion to the volume of oil produced. Supply has matched demand. This has meant that, for a century, while energy use has steadily risen, the price of energy has has stayed roughly the same relative to incomes.

Half gone?

Many scientists and geologists believe we are very close to the point where half of all the world's oil has been used up. This is when the largest volume of oil is extracted at the fastest rate. After the peak, production will inevitably fall. It's just a question of when and how fast. This maximum production point is called Hubbert's Peak, or Peak Oil.

While oil companies claim we have 30-40 years of oil left, some geologists say we have reached the peak already. If that is true, the volume of oil produced will soon no longer meet world demand. We will have a situation where the world demand for oil is continuously rising, while the world supply is unstoppably falling.

Watch this video clip about peak oil

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Source: Australia's ABC Television network. Length: 12 minutes.  
Transcript

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