Peak Oil is a term most people are unfamiliar with today. But it's a term everyone should get familiar with because it summarizes in two short words what could easily be the greatest challenge our society faces in the next 100 years. Our economies and cultures, in every nation on this planet, are founded on the availability of cheap plentiful energy. Most of that energy, whether to run our cars, heat our homes, or power our industries, comes from petroleum. When we read about the millions of barrels of crude oil pumped each day no one seriously thinks about the possibility of running out of oil. But the science behind Peak Oil says it's not a possibility but a probability, and there is strong evidence that we are already on the downhill slide toward running out.The term ‘Peak Oil' was first coined back in 1956 by Marion King Hubbert, an American geophysicist and oil expert working for Shell Oil. In a paper he presented to the American Petroleum Institute, Hubbert showed that oil production, whether for a single well or for the planet as a whole, followed a bell shaped curve. This is the diagram he prepared in his original 1956 paper:

Early in the curve production rises due to new discoveries which outpace demand and the addition of infrastructure to maximize production from existing wells. Late in the curve production plummets due to resource depletion and lack of new discoveries, since the amount of oil on the planet is finite. Peak Oil has come to represent a singular point in human history - the peak of the entire planet's oil production and the start of a global decline in oil supplies. Based on his expert knowledge of known oil reserves, and the rate at which oil fields could be made to produce, Hubbert predicted in 1956 that US oil production would peak around the years 1965 to 1970, and that global peak production would occur approximately 40 to 50 years later. Measured in retrospect by the oil industry and the US Government, the actual peak in US oil production occurred in the year 1970. There is strong mounting evidence that the global peak, or Peak Oil, is occurring now.

The following chart, created by the Association for the Study of Peak Oil in 2005, shows a prediction that Peak Oil will occur between the years 2005 and 2010, taking into account all known reserves, both conventional, including offshore and deepwater fields, and unconventional (tar sands, shale oil, etc.) - in other words, oil production is peaking right now, with no where to go but down.

As of today, essentially the entire land surface of the earth has already been explored for oil, and those discovered easy reserves have been in production for decades. They are all showing definite signs of depletion. Two of the three largest oil fields in the world have peaked. The giant Cantarell Field in Mexico entered depletion in March, 2006, as reported by Petróleos Mexicanos, Mexico's oil monopoly. Cantarell is now declining rapidly, at a rate of -13% year over year. The huge Burgan field in Kuwait was reported by the Kuwaiti oil ministry to have peaked in November, 2005. In April, 2006, Saudi Aramco reported that its mature fields are now declining at a rate of 8% per year, and its composite decline rate of producing fields is about 2%. The implication is that Ghawar, the largest oil field in the world, may have peaked.

What does Peak Oil mean in real terms to us right now? Global demand for oil is not abating, regardless of the interest shown in fuel efficiencies and alternative energy sources. The International Energy Agency, the energy watchdog of the Organization for Economic Co-operation and Development, estimated that global demand for oil rose 1 percent in 2006, and forecasts an increase in demand of 1.8 percent for 2007. Much of this increase in demand comes from developing countries just starting large scale industrialization, including economic powerhouses India and China. With demand climbing and supplies stagnant or falling, international competition for oil supplies can be expected to produce continuous increases in the price of oil, as well as potential face-offs and conflicts over control of oil resources. Oil could easily become the primary Casus Belli in the coming years, and many of the potential protagonists are nuclear powers.

The supply-demand equation of declining oil stocks and rising demand obviously mean we can expect no end to the price increases in gasoline and heating oil. As these commodities rise in price they will reach a point where people can't afford to fill their tanks or heat their homes. Businesses will be unable to afford to ship their products. Petroleum and petroleum by products are key raw materials used in plastics and many other products which are crucial to our economy. As oil rises in price, and even becomes scarce, businesses will be unable to acquire the raw materials needed to manufacture. Most of our electricity is generated by power plants fueled by oil, so the cost of electricity will also begin to climb. Shifting to alternative fuel sources such as coal or natural gas will simply shift some of the demand from oil to these fuels, pushing their prices up. The upshot is a long term decline in economic activity, and the resulting social disruptions, as we lack the energy needed to power our technological society.

A final area in which scarcity of affordable oil can affect us is a surprising one - the global food supply. The days of the small family farm using traditional farming methods is long gone. In fact scientists have shown that the human population of the earth exceeds the earth's ability to feed us naturally. Currently the bulk of the world's food supply is being produced on huge factory farms that rely on intensive use of chemical fertilizers and pesticides to raise the land's productivity. As oil becomes higher in cost and scarcer in availability, the fertilizers and pesticides needed will become unavailable. Without these fertilizers and pesticides the productivity of farms will drop and there will simply not be enough food to feed the global population. And what food is produced may only feed local populations since there may be no economic means to ship food globally as we do now. The end result could be a significant portion of the world's population facing hunger, and in some areas starvation.

There is no simple solution to Peak Oil. The quantity of oil on the planet is finite. If we are to survive and continue to prosper, we as a species must rapidly begin a shift away from dependence on oil and seek feasible renewable energy resources. If we don't, and quickly, then look for a rapid decline in global peace and prosperity.