I wrote about the likelihood that we'd be facing peak oil in my book, The Selfish Class, back in 2005 (available at http://www.roman-empire-america-now.com/e-books.html). At the time, the received wisdom was that if we reached it, it wouldn't be until 2030, or so, but some people thought it would be earlier. Sooner seemed more likely to me. Anyway, now, with oil swinging between the unbelievable prices of $130 and $145 a barrel, with oil companies having trouble replacing reserves depleted, with the great oil fields of Iran and Saudi Arabia, the North Sea and Texas getting old and tired (showing signs of depletion, or as in the case of Texas, already depleted) it's not surprising that "received wisdom" is changing.
Clifford Wirth, peak oil specialist, thinks we reached peak already; 2007 was the magic year. If you look at the run-up in oil prices in terms of peak oil, it might really make sense.
Peak oil doesn't mean there won't be more oil out there, nor does it mean that we won't continue to use too much of it; it means we will find less additional oil than we use up. But as prices rise, we will economize (probably why prices went "down" this week), i.e. we will use less wherever we can. But peak oil means that what will be discovered will be less than what has been discovered already, that total reserves will dwindle, that what we use will be more than what we find to replace it, and the oil left to extract will cost more and more, like the deep sea oil requiring platforms costing billions of dollars to construct. Or oil extracted from shale and tar sands, extremely expensive and energy intensive just to produce. It's a lot different from the Texas or Arabian oil fields where all you had to do was drill a hole a few hundred feet down and out would come a gusher, oil that would literally cost only a few dollars a barrel to produce.
Because of this, we'll be forced to make major changes, like not living in ever-expanding suburbs, which require individual vehicles for getting to work in the cities, or where you have to drive to buy necessities.
Biofuels may replace a lot of oil, but they won't be cheap. And, even as oil has generated wars--as in Iraq--and coups (all over, but especially in Iran) biofuel will, too.
The combatants may be different. If American corn producers, Brazilian cane growers, Malaysian palm oil plantation owners profit, others will lose: the poor in the Third World (and even the US) whose food costs are already rising out of sight, as well as the indigenous who are displaced, and everywhere the environment. What could ensue might be ugly: class warfare around the globe.
It doesn't have to be this way, but we will all have to radically change how we live if we want to avoid that ugly and expensive alternative. An alternative might be to everyone's advantage, considering the angry world we would otherwise be creating, as oil is used up. Instead we could change how we live, in some ways going back to a simpler age. We would still have computers and Internet and cable probably; these are not so resource intensive and they can save on transport. But we would have to live in smaller houses, so we can heat them, we will probably have to do without air-conditioning, unless geo-thermal systems become widely affordable. We will have to buy what is local most of the time, because to ship strawberries from Chile so that we can enjoy them in winter, or fresh peas from Mexico when icy winds blow, will no longer be affordable, except as a great luxury. Transportation costs will be too high, and of too great a cost to the global environment.
We've been living in a fool's world, and now we're beginning to face bitter reality. The American Way of Life is as obsolete, already, as the dinosaurs. And yet Chinese, Indians, Venezuelans and Brazilians want it, too.