What Is Peak Oil?
Peak Oil is actually quite a simple concept, yet one that will determine the future of human society. Imagine that all of our world's oil was gathered together in one big tank. At some point in time, half the oil in that big tank will be used up. What Peak Oil does is to determine when this "mid-point" or “Peak” will be reached, and then determines how rapid the decline in oil production will be after this “Peak” has passed. Basically it is the mountain top, and after it, comes the decent into the valley, a valley with precious little oil - and a myriad of consequences.
This means there will be less oil in the future. Many business & government groups speculate that this mid-point (Peak) is years away, but independent researchers & analysts disagree, claiming Peak Oil has either already occurred or will happen in months, not years. Little valid disagreement exists over Peak Oil itself, rather arguments center around when Peak Oil will occur.
Any finite resource from wood to coal, and of course to oil, will have a beginning, middle, and an end of production, for at some point the supply will run out.
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.
The underlying reasons are many and beyond the scope of this primer, suffice to say that oil becomes more difficult and expensive to extract as a field ages past the mid-point of its life.