As Oil Majors Chime In, the Reality of Peak Oil Lurches Closer

One by one, the world's oil companies are coming out of the closet. For years operating under the assumption and public assertion that world oil supplies were plentiful and would be for years to come, now many of the world's most powerful and well known oil giants are talking about scarcity or, even, the dreaded peak in world oil supplies.

For the uninitiated, Peak Oil is not the point where oil runs out but where it becomes physically impossible to grow the amount coming out of the ground and onto the world oil market. For all intents and purposes, Peak Oil is the top of the curve beyond which world oil production goes into inexorable decline. With a world economy largely dependent on oil for transportation, chemicals, and a range of synthetic products, even a plateau in world oil supply spells trouble.

So let's see what some influential people in the industry have to say about oil supply.

In 2005, Chevron's CEO announced to the world that the era of easy oil was over and went on a major advertising campaign to announce its solutions. In 2007, Total's CEO stated "we have all been too optimistic about the geology..." and went on to state that he couldn't see world supply ever going any higher than 100 million barrels per day. Also in 2007, the former CEO of Talisman stated "I think it's fair to say that the era of cheap energy is over." Then in early 2008, Shell CEO Jeroen van der Veer issued a public email that stated "Shell estimates that after 2015 supplies of easy-to-access oil and gas will no longer keep up with demand."

What's revolutionary is that these major oil companies are talking about the idea of scarcity at all. But the concept that world supply of oil might struggle to increase, much less meet demand? To many this situation still seems a remote concept relegated to some far off future date.

The facts are a bit more disconcerting.