Concern about the depletion of conventional global oil reserves seems to have intensified for several reasons, including technological improvements in geological data gathering and analysis, the increasingly sparse reserves discovered by new drilling, question marks over the real size of global proven reserves and concerns that much of the world's conventional oil, especially in the Middle East, is coming from old and overexploited mega-fields that are becoming less productive. There is no risk that we are running out of oil, but chances of being able to match the projected growth in demand over the medium-term with a rise in production is being seriously questioned. Opinions on peak oil range from optimistic predictions that the market economy will produce a solution to predictions of doomsday scenarios of a global economy unable to meet its energy needs. The reality, as is always the case, is somewhere in between.

Peak oil theory, also known as the Hubbert peak theory after the American Geologist H King Hubbert, concerns the long-term rate of extraction and depletion in conventional oil and other fossil fuels. It states that any finite resource such as crude oil will have a beginning, middle and an end of production, and at some point it will peak. Oil production typically follows a bell-shaped curve when charted on a graph with the peak of production occurring when approximately half of the oil has been extracted. With some exceptions, this holds true for a single well, a whole field, an entire region, and presumably the world. Peak oil does not mean `running out of oil', but `running out of cheap oil'. There is a big difference between oil supplies not running out, and supply meeting demand.

A great battle is raging today, largely behind the scenes, about when will global conventional oil production peak and what will happen when it does. In one camp are the `optimists' who tell us that 2 trillion barrels of oil or more remain to be exploited in oil reserves and future discoveries. In the other camp are the `realists' who reckon that 1 trillion barrels of oil, or less, are left.

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