The Peak Oil Theory

The peak oil theory does not necessarily say that the world is running out of oil. That’s actually an unstated fact. After all, nobody is actually making more.

What peak oil actually suggests is much simpler: At some point, global oil production will reach a peak, and then begin to decline. At that point, oil will become more expensive, because it will become increasingly expensive to discover and extract what oil there is left. As oil becomes more expensive, demand will go down. We’ll never actually use the last drop of oil because it will be too expensive to buy.

According to peak oil theorists, the U.S. experienced its own peak in oil production in the 1970s. Globally, the estimates of when we reach peak oil production range from yesterday to 20 years to 50 years or more – take your pick.

New Resources Harder To Find, Harder To Tap

New crude oil discoveries are not coming fast and furious, though Brazil has had some luck in this area lately. Just last week, Brazil announced a major find 155 miles off the coast of Sao Paulo, near the Tupi oil field that was discovered in 2006. Petroleo Brasileiro SA (Petrobras) isn’t discussing exactly how big they think the discovery is, but the Wall Street Journal reports that Petrobras is planning to lease another 40 deep-sea oil rigs in 2017 – this after it already has 80% of the world’s deep-sea drilling vessels under lease.

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