According to the article, even if investments were made the drop rate would only be 3% lower.

The problem with oil is that there are a number of large oil fields which, when declining, are very hard to replace. Unconventional oil or smaller conventional oil fields just can't keep up with the necessary flow rates.

A lot of the media keeps saying "oh don't worry, there's still a lot of oil on the ground". That's true, reserve numbers are still big. The flow rates aren't though, and as far as I know I can't fuel a car with buried oil. I can't even imagine what the oil price would be right now if it weren't for the economic crisis

We are seeing declines in conventional oil, but unconventional oil (from the oil-sands as an example) can replace this lost production and (potentially) increase the total oil production. The problem with unconventional oil is that it requires massive up front investments and is very expensive to produce (in comparison to conventional oil) ... A facility to convert bitumen to synthetic crude oil can cost $5 to $10 Billion and it still costs $60 per barrel of oil to process the bitumen; when you factor in royalty costs, they really don't start making a decent profit until oil surpasses $80 per barrel.

Now, oil companies are willing to spend this kind of money because when oil passes $100 per barrel they will rapidly be able to recover their initial investment. When you start to factor in the possibility of Windfall energy taxes which will (potentially) kick in before they're making a decent profit off of synthetic crude it really makes their investments far more questionable.

@HappySqurriel: Please put some data behind that claim, or at least say why you disagree with these forecasts.

We're talking about replacing many millions of barrels of production capacity within timeframes which aren't long at all.

Suncor, 1 of the producers of synthetic crude from the oil-sands, will see a production increase from 250,000 to 350,000 barrels of oil per day in 2009 ... As long as the oil producers can invest their money in unconventional oil reserves they can (easily) match the production lost because of conventional oil.

I still don't see it. That increase is nothing compared to the production declines this report mentions.

According to wikipedia's article on the Athabasca oil sands (they have a reference), they're using about 1% of the river flow to help extract this oil. It's a very water-intensive process. This is just one of the undoubtedly many ways in which production is limited.

Links to any studies to contradict the sourced information I have provided would be about the only thing which would convince me of what you're claiming. I find it especially strange that you claim this is something which could be done "easily".

I am the only person here who's already dumped my car?

I met a guy on the bus over the summer who said he was paying more for gas than for rent, hence his recent switch to the bus.

No. I didn't need a car while I had my own office (I'm closing it this week :( ), but when I get a job, I'll have to get a car in all likelihood. I'll get a SMART though. At least, I'll somewhat stick to my principles.