U.S. crude-oil production is falling because investments into shale-oil production dried up as the price of crude oil fell below $60/bbl. Companies aren't interested in putting new capital to work, and because these oil fields deplete, that means crude production is falling. Why is that significant? Because most of the world's new oil production in the past 6 years has come from U.S. shale-oil fields. It is hard to overstate the global importance of the new crude supply that came online in the U.S. since 2008.
With investments on the decline, and more than enough news from the industry highlighting the financial difficulties many oil producers find themselves confronting--not the least of which are dozens of bankruptcies and sharp reductions in exploration--expectations of unlimited amounts of oil at the ready are fanciful at best. Fossil fuels don't spontaneously extract themselves, and being finite, there are built-in limitations.
And as the quote from Robert Rapier above suggests, most of the surge in production over the past few years came from shale-oil fields, which are a much more expensive undertaking. Fracked wells deplete at a very high rate, and so the need to stay on a fast-moving treadmill of drilling cannot sustain itself endlessly. Costs, efforts, and the limitations of the supply itself all conspire against "endlessly."
Another important factor is that the prime locations where tight oil can be found in those fields are the ones tapped first, which is a perfectly reasonable business decision to make.
High prices are a necessity to the oil industry now much more dependent on unconventional resources like the shale/tight oil fields, and there aren't any high prices to be found. What happens as a result requires only another dose of second-grade math.
If high prices return, the flip side of industry delight is consumer dismay. That leads to reduced usage because of high price's impact on their personal expenditures, and the increased demand-decreased demand-high price-low price wheel spins again. That's the economic system sustaining us, and those drawbacks cannot be ignored or explained away by Happy Talk, no matter how earnest or necessary to appease ideological inclinations.
Empty assurances about the resources left untapped have a limited shelf life in the face of these and related facts and challenges of maintaining fossil-fuel production at the levels needed--if not today, then soon enough. The sooner those peddling the repetitive, pleasant-sounding, but misleading assurances about the future of our fossil-fuel supplies, and instead start devoting their considerable skills to helping rather than hindering the transition, the greater our chances of actually managing an acceptable--but certainly not ideal--move away from society's massive dependence on a finite supply.
That's not rocket science, either. The question remains: will the deniers appreciate that fact and begin participating rather than obstructing?
Adapted from a blog post of mine