Al Jazeera

When demand for oil consistently surpasses supply, experts warn that our lives will look "very differently".

Energy derived from oil reaches, quite literally, every aspect of our lives.

From the clothes we wear, to the food we eat, to how we move ourselves around, without oil, our lives would look very differently.

Yet oil is a finite resource. While there is no argument that it won't last forever, there is debate about how much oil is left and how long it might last.

Tom Whipple, an energy scholar, was a CIA analyst for 30 years - and believes we are likely at, or very near, a point in history when the maximum production capacity for oil is reached, a phenomenon often referred to as "peak oil".

"Peak oil is the time when the world's production reaches the highest point, then starts back down again," Whipple told Al Jazeera. "Oil is a finite resource, and [it] someday will go down, and that is what the peak oil discussion is all about."

There are signs that peak oil may have already arrived.

The International Energy Agency (IEA) recently increased its forecast for average global oil consumption in 2011 to 89.5 million barrels per day (bpd), an increase of 1.2 million bpd over last year.

For 2012, the IEA is expecting another increase of 1.5 million bpd for a total global oil consumption of 91million bpd, leaving analysts such as Whipple to question how production will be able to keep up with increasing consumption. Whipple's analysis matches IEA data which shows world oil production levels have been relatively flat for six years.

"This is getting very close to the figure that some observers believe is the highest the world will ever produce," Whipple wrote of the IEA estimate in the July 14 issue of Peak Oil Review. He told Al Jazeera that peak oil could be reached at some point in the next month, or at the latest, within "a few years".

Low-hanging fruit

Marion King Hubbert, a geoscientist who worked at the Shell oil research lab developed the "Hubbert curve", a logistical model that accurately predicted that oil production in the United States would peak between 1965 and 1970.

His model has described fairly accurately the peak and decline of production from oil fields, wells, regions, and countries. According to Hubbert's model, oil production rates will follow a roughly symmetrical distribution curve based on exploitability and market pressures.

Optimists estimate that peak oil production and global availability will decline beginning in 2020 or later, and don't see a crisis happening that would affect major changes in lifestyles of oil-consuming nations.

A study published in the Energy Policy journal, however, predicts that demand will surpass supply by 2015 unless sustained economic recession constrains demand.

The IEA says that production of conventional crude oil already peaked in 2006, and economic indicators show that, through the first two quarters of 2008, the global economic recession was made worse by a series of record oil prices.

Both production and discovery of new oil fields appear now to be relatively stagnant compared with recent decades, and world oil generating levels reached a plateau several years ago, reports the IEA.

Richard Heinberg, author of ten books related to peak oil and its impact on our economic, food, and transportation systems, believes peak oil is a function of the dominant principles of resource extraction.

"Many people believe it's about running out of oil, and it's not," he told Al Jazeera. "It's about finishing off the low-hanging fruit."

Oil is an energy dense, portable resource, and the energy that has been expended finding and extracting it is minute when compared to the energy it produces.

But Heinberg argues that we have likely already reached the maximum production limits for oil.

"Prices are almost at all-time highs, global output of oil has been stagnant for six years, and look at the cost of the BP disaster in the Gulf of Mexico," he said. "The cost of producing oil has increased dramatically in the last decade, both financially as well as the cost to the environment."

Meanwhile, world demand for crude oil grew at nearly two per cent each year between 1994 and 2006. In 2007, global demand peaked at 85.6 million bpd, but decreased in 2008 and 2009 by a total of 1.8 per cent, reportedly due to rising fuel costs.

Despite the lull, world demand for oil is projected by the IEA to increase more than 21 per cent over 2007 levels by 2030, from 86 million bpd to 104 million bpd, due largely to increases in demand from the transportation sector.

According to the US Energy Information Administration, current world oil consumption is approximately 88 million bpd, enough to fill roughly 5,500 Olympic-sized swimming pools each day.

As consumption continues to increase in such major users as China, India, and the US, existing oil fields are being depleted and new discoveries are not keeping apace in order to offset growing demand.

"One thing to remember is that there is global depletion," Whipple said. "If you don't come up with new sources every year, you can't keep up. Wells are going dry daily. World depletion is three to four million barrels less oil available each year in existing fields."

Whipple is blunt about what life will look like in a post-peak oil world.

"You're going to see major changes in industrial civilisation," he said, adding that he expects oil to once again approach $150 per barrel in the next 18 months. "In the US, where we aren't used to paying $10 for a gallon of gas like they do in Germany, that [$150 per barrel of oil] will really slow things down."

He believes discretionary driving will basically stop, and added: "Anything with a parking lot out front is going to be in trouble."

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