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Up until Tuesday, oil was crashing down toward $110 a barrel as demand growth estimates have been clipped. So what happened to peak oil? Nothing happened; peak oil should still be a concern. For a larger context on peak oil, see my June post 'Peak oil: are we there yet?' From where I sit, I see oil as having played a major role in creating the downturn we are now experiencing. Basically, oil prices rose to the point where we cried uncle, reduced our consumption accordingly, and the economy suffered as a result. Before 1973, the world had never see an oil shock. But, this is the 4th such oil shock since the end of Bretton Woods in 1971 when Nixon ended the U.S. dollar peg to gold and ushered in an era of floating currencies. Methinks I see a connection.

Reuters reports that an executive of French oil company Total expects oil production to peak before the end of the next decade - and wants the company to move into nuclear power in the post-oil age (something Bucky Fuller predicted would be the next step for the oil industry) - Total sees nuclear energy for growth after peak oil. French oil and gas giant Total (TOTF.PA: Quote, Profile, Research, Stock Buzz) is targeting nuclear energy to drive growth long after oil and gas output peak, a top executive said on Monday. "In the future, energy demand will be constrained by tight supply," Arnaud Chaperon, Total's senior vice president for electricity and new energies, said in a presentation to a nuclear energy conference in Qatar. "Oil and gas will still play a big role in the energy balance. But in the electrification of the world economy, nuclear will play a major role, together with the development of solar and other renewables ... That is why Total is very interested in developing nuclear and renewables."

The Economist has a look at some of the factors affecting oil production, warning "Oil prices have plunged. Another spike may be on its way" - Well prepared. WITH the price of crude mired at half the peak of $147 it reached in July, this may seem like an odd time to invest in oil wells. Despite trimming its output along with other members of the Organisation of the Petroleum Exporting Countries (OPEC) in an effort to prop up prices, that is just what the United Arab Emirates plans to do. Short-term price movements, its oil minister insists, should not distract from the world's enduring thirst for oil. Indeed the collapse of oil prices, one of the few reasons around for economic cheer, may be setting the stage for another spike. Just now oilmen are focused on the rapidly slowing demand for their product. Since early October, reckons the boss of BP, a big oil firm, America's consumption of crude has fallen by perhaps 2m barrels a day, or about a tenth. Sales of cars in America fell even more steeply last month-by 32%. There is also gloomy news from emerging markets, which have been the driving force in the oil markets of late. Demand for oil is growing much more slowly in China and India, for example, and car sales are down in both countries. There is even talk of global oil demand falling next year, for the first time since 1991.

Energy Bulletin's Bart Anderson has an interview in, of all places, a French cyberpunk journal - The future is Amish, not Mad Max: interview with Bart Anderson of EB. Laurent Courau: Your site puts forward the concept of "peak oil." Could you begin by reviewing this essential point for the readers of La Spirale? Bart Anderson: There is a limited amount of petroleum in the earth. After the easy deposits have been exploited, we go after deposits that are more difficult and expensive to develop (e.g. tar sands, deepwater and arctic oil). At a certain point - peak oil - the amount of oil produced reaches a maximum. Afterwards, less and less oil is produced. In this way oil production follows a more-or-less bell-shaped curve, Hubbert's Curve. The curve takes its name from the Shell Oil geoscientist, M. King Hubbert, who presented the idea in 1956 and predicted the peaking of U.S. oil production, which occurred in 1970.

"Stuart at Early Warning has a post on a study of the impact of rising fuel prices on different geographical regions in the US (which looks similar to a comparable study done in Australia a few years ago - The Impact Of Rising Oil Prices On Sydney Suburbs) - Peak Oil Stress Map. The map [below] is a first rough cut at where the stress of peak oil (or any oil shock) is likely to be greatest. It comes from taking county level data from the Census Quick Facts and extracting two variables: the average travel time to work (from the 2000 census), and the median household income (from 2008 data). The idea is that if average travel time is long, that probably indicates that people in that county need a lot of oil to run their cars. On the other hand, if income is low, they are probably going to have more trouble paying for that oil. So I divided the travel time by median income, and then rescaled that index by its own average and standard deviation to produce a map of where the problems are likely to be greatest. "

Oil megaprojects are large oil field projects to bring a significant amount of new oil production capacity to market. Tabulations of oil megaprojects are used in an attempt to forecast whether future global oil supply will be adequate to meet demand for oil, or whether the world is reaching Peak Oil. As such, oil megaproject analysis has been controversial. This approach to oil forecasting is also known as the "bottom-up" approach, in that it relies on building a detailed model of where and when new oil production capacity will come on line.

Those of you who do not believe Peak Oil Theory should first make sure you fully understand it. According to this theory, after a reservoir has been depleted by half of its total volume, the output begins to plateau or remain constant for some unknown period. At some later time (which is unpredictable) the output begins a permanent decline of variable duration (which is also unpredictable) until the remaining quantity of oil is no longer economically feasible to extract with current technology. Therefore, Peak Oil Theory does not state that the earth is running out of oil per say. It states that the earth is running out of inexpensive oil, otherwise known as conventional oil - the high-grade oil that comes out by drilling on land and requires minimal refinement costs.

The concept of peak oil started as a geological theory* that went like this: if you knew the amount of oil produced in the past, the rate at which it was produced, and roughly how much oil remained under the earth's surface, the theory could help you determine when oil production would likely start declining. Over the years however, proponents and critics alike recognized that more factors than just the size of oil resources and the ease of exploiting them would determine when world oil production would peak and plateau.

Oil Price Plunges from a Zenith In the first half of 2008 we saw oil climb to approach $150 a barrel amid the pundits' warning of oil rocketing to $200 a barrel and way beyond due to the phenomenon of Peak Oil. In the wake of those heady days we have now witnessed the slumping of oil prices to well under $100 a barrel into October. We have often heard that this is all within the context of declining oil supplies and escalating demand due to the rapid economic development taking hold in large regions and populations of earth, for example like in China and India, in addition to the maintenance of development in the more developed countries like the USA and Europe. The graph below illustrated this rise and fall of oil prices, and particularly the fall in prices from an all time zenith of a few months ago (Williams, 2008).

Articles in the mainstream press about peak oil are pretty rare these days, but the SMH has one on the subject that never mentions the phrase (and flippantly dismisses Iraqi oil on the way) - Enjoy the cheap petrol, while it lasts. With demand on the rise, existing wells drying up and a dearth of big discoveries, the oil price is only headed in one direction. IN July 2008, the oil price hit a record high of $US147 a barrel. In its journey from the lows of 1998 to the highs of last year, many reasons were put forward for its ascent. Explanations included a so-called "war premium" , "a terrorist premium", hurricanes and evil speculators - the list of things and people to blame for the rise in oil prices was long. As the price rose, calls were made by political leaders and interest groups for oil producers to lift production and for a cut in taxes on oil and petroleum. Accusations of price gouging and profiteering by oil companies and producers soon emerged.

TomDispatch has a new article from Michael Klare on peak oil and America's upcoming energy challenges - America's Energy Crunch Comes Home. No other major power relies on getting so much of its energy from oil. Making that 40% figure especially daunting is this: the world supply of oil is about to contract. The competition for remaining supplies will then intensify, while most of what remains is located in inherently unstable regions, threatening to lead the U.S. into unceasing oil wars. Just how much of the world's untapped oil supply remains to be exploited, and how quickly we will reach a peak of sustainable daily world oil output, are matters of some contention, but recently the scope of debate on this question has narrowed appreciably.

The BusinessWeek story cited below, along with King Abdullah's April announcement that they will not be opening new fields, provides evidence that we are near - or perhaps even at - Peak Oil. 1. It may be political peaking;: perhaps the Saudi's could invest to increase production, but choose not to (an obviously sensible decision). 2. It may be geological peaking, if the Saudi's are unable to increase production. But whether geological or political peaking, the long-discussed event may be starting now.

Since the beginning of the modern oil age in 1859, pessimists have warned that the oil wells would soon dry up or that oil production would peak and not be able to keep up with ever-increasing demand. Again and again, the pessimists have been proven wrong, often embarrassingly so, as science and technology have allowed more oil to be extracted from existing fields and from deposits in more challenging locations such as the Arctic and the deepest waters of the continental shelf. Indeed, oil production rates have increased, on average, by about 1.1 million barrels per day per year over the past 10 years.

The disconnect between peak oil concerns and the presidential race is almost total. As prices at the pump rise, each candidate is now talking about their so-called solutions to the problem. Despite clear new warning signs from Russia, Saudi Arabia, Mexico, and Nigeria that peak oil is nigh, the candidates remain unwaveringly oblivious to the true causes of rising fuel prices, preferring instead to dwell on irrelevant-actually, counterproductive-measures like suspending the federal gas tax during the summer months or taxing Big Oil. This is akin to putting a band-aid on a melanoma.

"Even if oil demand was to remain flat to 2030, 45m bpd of gross capacity - roughly four times the current capacity of Saudi Arabia - would need to be built by 2030 just to offset the effect of oilfield decline", according to Nobuo Tanaka, executive director of the IEA, speaking at a news conference in London. Oil reached a record peak of more than $147 a barrel in July, but has fallen back below $60, a drop of more than 50pc. Given the high cost of bringing on new output and the struggle to match supplies with demand, the IEA has assumed consumers will pay an average of $100 a barrel for oil over the next seven years and more beyond that. "Current trends in energy supply and consumption are patently unsustainable - environmentally, economically and socially - they can and must be altered," said Mr Tanaka. * o Text Size o click here to increase the text size o click here to decrease the text size * Email this article * Print this article * Share this article o delicious o Digg o Facebook o Fark o Google o Newsvine o NowPublic o Reddit o StumbleUpon http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/3448385/Credit-crunch-risks-world-oil-supply.html Related Content * More on Oil and Gas More on ... Oil and Gas Get feed updates Finance Get feed updates Energy Get feed updates telegraph tools Switch Utilities Save on fuel bills Search the market for the best prices on gas and electricity. Telegraph Utilities Comparison Service Advertisement telegraph financial partners Investment solutions * Investor services * Portfolio management * Investing for income guide * Inheritance tax advice * Reader guides Finance most viewed * TODAY * PAST WEEK * PAST MONTH 1. Row breaks out at easyJet 2. Abandon all hope once you enter deflation 3. B

"The ongoing Gulf of Mexico oil disaster is bringing the mainstream media a little closer to the peak oil debate. It's been out there on the business pages for a while, but it is beginning to make its way into news pages - via comment columns, and in a roundabout way, of course. It's still at the flirtatious stage, but its beginning. It's a hot topic, and few mainstream writers are actually throwing their weight behind the concept of Hubbert's peak (M King Hubbert, left). Right now, they are mentioning peak oil to deny it, but doing so with words that clearly agree with the concepts behind the issue. Perhaps it's a coded way of informing people in the know that the writer is in on the bigger picture, but can't actually come out and say it. Or at least not right away."

On the subject of apocaphilia and reversalism, Tom Whipple's latest "peak oil crisis" column in the FCNP is heavy on doom - The Peak Oil Crisis: Civil Unrest. No mention of green new deals or rapid shifts to clean energy sources and transport systems to be found unfortunately - just talk about "involuntary changes" that people will need to make to their lifestyles that seems rather totalitarian to me (did all that time in the CIA make Tom start to think like the Soviets ?). Why not go for persuading people to make the necessary adaptive changes voluntarily ? We'll all end up with a better world in the end (rather than the locked down world of rationing and limited transport that some seem to think inevitable).

The following is an article I prepared for the Peak Oil Review, which is produced by the Association for the Study of Peak Oil and Gas. The United States was blessed with abundant reserves of crude petroleum, high quality and easily taken from the ground. Up until 1973, we were the world's biggest producer of crude oil, and even today remain the third biggest, ranking behind only Russia and Saudi Arabia.

With the stock market, and therefore the retirement savings of millions of US consumers, forcing financial writers to search their thesauruses for yet more synonyms for "unprecedented", it's as predictable as it is depressing that peak oil has fallen off the radar screen of so many. Gasoline is now selling at the stunning price of only $1.82/gallon, something few people not confined to a psych ward would have predicted six months ago. More to the point, it's seen by many individuals as "proof" that There Is No Oil Problem, There Wasn't and Oil Problem, and There Never Will Be An Oil Problem.

What's up with oil prices? Well, it's not speculators, and there's no relief in sight, meaning at least five more years of high prices with no easy fixes. The ugly truth? Peak oil isn't fringe anymore-it's going mainstream. That's the reading from the latest oil market report from the International Energy Agency, the rich-country energy watchdog. The IEA's latest x-ray of the oil market includes plenty of disturbing nuggets.