I think people have to decide what is the worst scenario. Oil getting scarcer and more expensive OR too much CO2 in the atmosphere through increased oil (and coal etc.) consumption and global warming.

There may be hard times ahead but we want to get of fossil energy anyway right? That doesn't mean that there will not be some economic hardship but the nice thing about the free economy is that renewables will take off once oil is too expensive.

NJ5, not only should you be concerned by a possible stock market crash eating away your money but you should also be concerned by higher rates of inflation due to more expensive goods giving you paycheck cuts.

I am personally for doing all we can to switch to renewable energy sources for electricity and for replacing oil powered devices with hydrogen fuel cells powered devices (with, like somebody said, the hydrogen coming from electrolysis).

For this we need massive research money poured in both areas in the next couple decades, and when good enough solutions are here, massive infrastructure investments.

This is a problem that dwarfes run-of-the-mill terrorrism (the non run-of-the-mill exceptions being nuclear terrorism and biological terrorism) as its side effects could be starvations in poorer countries as food becomes too expensive and the accompanying riots and revolutions (like the lack of bread fueled the French revolution).

Also, greater dependency on renewable energies has the side benefit of helping your trade balance (unless you export oil), is better for the environment and is the most likely thing to really curb the current wave of middle eastern terrorism in the long term (say, 50 years after serious decreases in oil cunsumtions are seen, with an increase in the short term, which unfortunately will be a good deal our lifetime (unless you already are an old geezer ))

How would oil independency help curb middle eastern terrorism? In two ways:

_Less oil dependency means less need to meddle in the middle east and thus less occasions for them to get riled up with the west (think of it as an allergy, you can avoid a crysis by avoiding rubbing allergens on the wrong tissues, the problem is still extent but you can avoid its worst effects).

_Less money going in currently terrorist rich societies* means that less money will go in terrorists organisations in the long run. It might make things worse until they run out of money but they can't run an organisation like Al-Qaeda forever without new funds coming in (You can see it as a big company with huge losses year over year as it buys expensive weapons, relying on continuous outside investments; Osama's millions/billions while they go far cannot go on forever).

I view terrorism as a luxury as you cannot afford to do it if you are struggling to feed yourself as a society (unless it has short and middle terms goals of helping feed yourself but then it isn't terrorism anymore as it isn't killing just for the sake of killing).

Of course there would still be terrorism (and probably always will) but it probably would be more local (like Northern Ireland) or new causes. And jsut because we can never eradicate all form of it doesn't mean we shouldn't try (I can never get my house completely clean but it doesn't mean I shouldn't try).

* the massive majority of these societies might not be terrorist but they seem to be the current source for a lot of today's international terrorism.

I wish it were that simple, unfortunately I don't think it is.

Trading and speculation are certainly increasing the prices a bit, but it can't be enough to explain the massive price increases we're seeing... The very fact that speculators can increase the price shows that supply isn't strong in the first place.

"Peak oil is a myth" you said. Now that's just plain wrong. Peak oil is the very opposite of a myth, it's a mathematically proven fact. When you have a finite resource being consumed, at some point production will have to peak. The only relatively open question is when that peak will occur.

Regarding exploration, yes there are a lot of ongoing projects and discoveries, unfortunately they don't seem to be enough to counter the depletion in existing oil fields. Exploration of those new fields is not only labor-intensive, but also energy-intensive which makes the actual retrievable amount of oil lower than it would seem by looking at the fields' sizes. The Canadian tar sands are a very dirty business, the amount of fresh water required to mine those sands is disgusting in terms of environmental impact.

@Sri Lumpa: Indeed, inflation also worries me a lot.

@Everyone else: Sorry if I missed something important to reply to, I'll look here later again :)

According to everyone in the oil industry (Both the comanies and the countries) the oil price is no good representation of the demand/supply market. Hence the refusal of the OPEC countries to increase production.

Sorry for the myth thing. I forgot to add that it's a myth that we've reached Peak Oil already. That's what the Peak Oil organisation says. Of course there is something as peak oil, just not now.
Only one year ago Saudi Arabia DOUBLED it's reserves to a massive 400 billion bboe.
There are a number of massive projects that are about to go on stream (Kashagan and Sakhalin for example). It's impossible to prove that we've reached peak production when the OPEC countries aren't even producing at their maximum.
Current techniques also allow for higher recovery factors and even the reproducing of depleted fields, which will also allow for production bossts.

Of course exploration and production is very expensive, but you're wrong to think that the amount of energy that's put into that is very poor in relation to what you produce. Once the infrastructure is in place a typical field can produce for over 20 years. The amount of energy produced is much higher than what's put into the building of the framework.

I can tell you that everything that's done in the oil-business is examined very closely by environmentalist and governments, so be sure that oil-companies do absolutely everything to operate as "green" as possible. Sure the mining of tar sands is very intensive, both energy and environmental, but a lot of money is used to make sure the environmental impact is as small as possible.

Understood on the myth issue.

Regarding Saudi Arabia's reserves, there are some reasons to doubt the increase on their stated reserves. They weren't accompanied by any big discoveries, and they have reasons to artificially inflate it. There's no real scrutiny of those numbers, as much of the information on oil reserves is considered a national secret.

Regarding the energy return issue, I was mostly talking about discoveries such as oil shale, which seem to return virtually no energy (I saw some analysis which had its energy content as being similar to a mashed potato with butter on it). Some other new discoveries are also not that good in terms of EROEI, which makes sense if you consider that increasingly complex methods are required for recovery, although there are optimizations happening all the time as you said.

Regarding the environmental issues in Canada, I haven't read that much but what I read is alarming. See this page:

http://www.tarsandswatch.org/canadas-water-crisis-escalating-experts-expect-climate-change-present-serious-water-challenges-man-0

A quote from there:

Alberta's oilsands industry is a water glutton, using two to four barrels of fresh water for every barrel of oil extracted.

That's staggering... They produce around 1 million barrels per day now, which means at least ~320 million liters of fresh water per day. A human needs around 2.5 liters per day, which means that water would be enough for 128 million people in drinking water.

EDIT - something else about Canada's tar sands that I found on wikipedia (they have references):

Large amounts of energy are needed to extract and upgrade the bitumen to synthetic crude. At this point in time, most of this is produced by burning natural gas which is widely available in the tar sands area. Approximately 1.0 to 1.25 gigajoules of natural gas are needed per barrel of bitumen extracted.^[47] Since a barrel of oil equivalent is about 6.117 gigajoules, this produces about 5 or 6 times as much energy as is consumed. Energy efficiency is expected to improve to 0.7 gigajoules of energy per barrel by 2015,^[48] giving an EROEI of about 9. However, since natural gas production in Alberta peaked in 2001 and has been static ever since, it is likely tar sands requirements will be met by cutting back natural gas exports to the U.S

Im never massively worried by this stuff simply because necessity is the mother of invention.

It's been shown before that development of electric cars have been held back by oil companies. I imagine once it becomes imminent that oil will run out they will rapidly develop consumer friendly electric cars.

Actually the development of new ways to fuel cars is more held back by the car industry. They don't want to make the massive investments needed to create these new motors.

Most Oil comapnies have the official opinion that it's a waste to use oil for car fuel. They can sell their product to the chemical industry and electricity producers anyways and also airplane fuel and shipfuel won't change anytime soon.

Here is the bell curve. Forget the peak oil date of 2000. Call that year 0, 1950 will be -50, 2050 will be +50.

I guess I did not expressed myself properly when I said "at a steady rate." I did not mean that it would be a straight line decline. I knew that it would have a bell curve. But I also wanted to point out we would not run out of oil from one day to the next.

As long as we control WORLD demand so that it matches demand its -x(year) demand, then the world economy will be fine and the environment will benefit as a side effect. Example that by year +50, we have dropped WORLD demand to that of the year -50.

As you pointed out, emerging markets are the ones putting strains on current world demand, that is their unquestionable right. It is conceivable though that mobile and renewable energy (which is what cars need) will be the norm by the year "Peak oil +50". As Zim pointed out in the post above this one: "necessity is the mother of invention." So as soon as Peak oil is seen as an imminent crisis by the masses, then investment in renewable and mobile energy will be made which will begin to alleviate the pressures caused by peak demand.

@Dogs Rule: Normally I would be as optimistic as you are, but I have some reasons to have doubts here. There's an enormous political inertia, in the meantime stupid solutions like ethanol from corn are adopted, which cause famine and rises in food prices.

I don't think there has ever been such a serious situation before. It's fair to say that oil is the most important raw ingredient of today's civilization, how does that compare to any previous crisis? I'd love to think that the free market could take care of this issue, but instead I think it's one which would require massive political will and balls, which frankly no one seems to have. It's easier to just keep feeding the masses on the idea that today's society is sustainable without a massive change in energy policies.

What we have a history of, is of dramatic and sudden changes in the economy, which is a non-linear system. Dramatic events and realizations can cause the economy to crash, and when it's about something as serious as oil, the shit may hit the fan pretty soon after that. How do you think people will react if the oil price continues to increase as much as it has lately?

Let me put it another way: the current economic system is based on a necessity of infinite growth, how will that work when the realities of finite resources start kicking in?

Just one more thing - it seems to me that serious investment in renewables and nuclear power should have started yesterday. Overhauling society's use of energy is not something which can be done quickly without serious repercussions. We could well end up with coal replacing oil (until Peak coal happens), which would be even worse than now due to more pollution. There's the possibility of the so called "clean coal", but that's an unproven technology with waste issues which are even worse than with nuclear power.