What is Peak Oil?

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Peak Oil is a label for the problem of energy resource depletion, specifically, the peak in global oil production. Oil is a non-renewable resource, one that has caused phenomenal economic and population growth over the last century and a half. The rate of oil production, (extraction and refining) has grown in most years over the last century, but once we go through the halfway point of all reserves, production becomes ever more likely to decline. Peak Oil means not running out of oil, but running out of cheap oil. For societies depending on ever increasing amounts of cheap oil, the consequences may be dire. Without reforms, economic and social decline seems inevitable. Why does oil peak instead of suddenly running out? Oil companies have, naturally enough, extracted the easier-to-reach, cheap oil first. The oil pumped first was on land, near the surface, under pressure, light and 'sweet' (meaning low sulfur content) and therefore easy to refine into gasoline. The remaining oil, sometimes off shore, far from markets, in smaller fields, or of lesser quality, takes ever more money and energy to extract and refine. Under these conditions, the rate of extraction inevitably drops, and all oil fields eventually reach a point where they become economically, and energetically, no longer viable. If it takes the energy of a barrel of oil to extract a barrel of oil, then further extraction is pointless. The implications of global oil peak could not be more overwhelming. As increasing demand exceeds supplies, oil prices will rise substantially and international competition for reserves will grow ever more ruthless. The impact will be felt throughout the global economy and in every person's wallet. $3 per gallon of gas is just the beginning just wait until oil hits $100 a barrel.