A January 2012 commentary in the scientific journal Nature, which I missed at the time, argued that global oil production reached a stable-ish plateau around 2005. The general theory of peak oil (which is more or less inescapable unless some process can make oil other than geology) holds that we can stay at or around that plateau as long as we want to pay more and more to extract each subsequent barrel. Meanwhile oil prices will tether global economic growth to the ground by pulling us back to depression whenever economic expansion starts to create a demand for oil that supply can’t meet.
Then something happens when the economic drag cannot support the extreme efforts needed to get at the really tough crude in deep sediments and refractory tar sands. What happens, I don’t know. Klaatu berada nikto?
It appears the article is paywalled, so here is a fair use excerpt:
From 2005 onwards, conventional crude-oil production has not risen to match increasing demand. We argue that the oil market has tipped into a new state, similar to a phase transition in physics: production is now ‘inelastic’, unable to respond to rising demand, and this is leading to wild price swings. Other fossil-fuel resources don’t seem capable of making up the difference.[…]Production of crude oil increased along with demand from 1988 to 2005. But then something changed. Production has been roughly constant for the past seven years, despite an increase in price of around 15% per year2 (at Brent crude (London) prices) from about US$15 per barrel in 1998 to more than $140 per barrel in 2008 (see ‘Oil production hits a ceiling’). The price still reflects demand: it declined to about $35 per barrel in 2009 thanks to the 2008–09 recession, and recovered along with the upturn in the global economy to $120 per barrel before declining to its value today of $111. But the supply chain has been unable to keep pace with rising demand and prices. […]We are not running out of oil, but we are running out of oil that can be produced easily and cheaply. The US Energy Information Administration optimistically projects a 30% increase in oil production between now and 2030 (ref. 2). All of that increase is in the form of unidentified projects — in other words, oil yet to be discovered. Even if production at existing fields miraculously stopped declining, such an increase would require 22 million barrels per day of new oil production by 2030. If realistic declines of 5% per year continue, we would need new fields yielding more than 64 million barrels per day — roughly equivalent to today’s total production. In our view, this is very unlikely to happen. […S]everal recent studies suggest that available coal is less abundant than has been assumed. US coal production peaked in 2002, and world coal-energy production is projected to peak as early as 2025 (ref. 8). Whenever coal-reserve figures are updated, the estimates are usually revised downwards: estimates of world reserves (79% of which are held in the United States, Russia, India, China, Australia and South Africa) were decreased by more than 50% in 2005, to 861 gigatonnes. […]Of the 11 recessions in the United States since the Second World War, 10, including the most recent, were preceded by a spike in oil prices13. It seems clear that it wasn’t just the ‘credit crunch’ that triggered the 2008 recession, but the rarely-talked-about ‘oil-price crunch’ as well. High energy prices erode family budgets and act as a head wind against economic recovery.