Crude awakening: the best hope for meeting growing world demand for oil, say experts, is to tap Saudi Arabia's reserves. A Bush advisor on energy says those reserves don't exist.

• Author: Drum, Kevin

As recently as a few years ago, only two groups of people were interested in the and subject of oil depletion. The first was Texas oil moguls and their lobbyists who roamed the halls of Congress searching out ever juicier tax breaks from our elected representatives. The second was a tiny group of cranks and conspiracy theorists who not only wrote for Scientific American but also frequented the sparsely inhabited corners of the Internet and begged the world to pay attention to the obscure topic of "peak oil"--whether the world wanted to pay attention or not. Fast forward to 2005, and the oil moguls haven't changed much. The peak oil cranks, on the other hand, are cranks no longer. In fact, they've practically become rock stars. Half a dozen books on the subject have come out in the last two years, and magazines from Rolling Stone to National Geographic also have published articles on the subject. The "end of oil" is suddenly a hot topic.

It's not hard to understand the change. As the 1990s came to a close, the world was awash in oil. Oil company executives counted themselves lucky to get 10 bucks for a barrel of crude oil, and analysts were predicting that even this price might be cut in half. Forever. When former oil executive Colin Campbell, the dean of the peak oil doomsayers, warned that the end of cheap oil was only a few years away, he was easy to dismiss. After all, hadn't he said the same thing five years before? And five years before that?

More generally, we could consider the consistently dismal track record of other resource pessimists. Didn't professional doomsayer Paul Ehrlich make a bet with economist Julian Simon in 1980 that the prices of five different metals would rise over the next decade? And wasn't he forced to pay off Simon in 1990 as steadily increasing supplies combined with more efficient manufacturing techniques had cut prices in half? Yes and yes.

Today, though, things look very different. Royal Dutch Shell shocked investors last year when it unexpectedly announced that it was slashing its estimate of proven reserves by 20 percent. The price of oil has climbed dramatically since 9/11, passing $50 per barrel for the first time since the Ayatollah Khomeini touched off the world's last oil shock in 1979. At the same time, the demand for oil continues to rise inexorably, fueled by ever bigger SUVs in the United States and steadily growing appetites for Western standards of living in China and India. More than a few mainstream analysts believe that oil prices could hit $100 per barrel in the next several years.

None of this comes because we're literally running out of oil. Everyone agrees that there's still plenty left. Rather, the theory of peak oil derives from a simpler but less widely understood question: How fast can the stuff be pumped out of the ground? Right now, the world consumes oil at the rate of about 84 million barrels per day (bpd), and that's the number which matters. If the world's oil suppliers can continue to increase this production rate as demand grows, the global economy is in good shape. If they can't, we're in trouble no matter how many barrels of crude oil are lying under the ground.

Concern with production rates is neither new nor especially controversial. In fact, it was first raised by M. King Hubbert, a Shell Oil geophysicist, over 50 years ago. In a now-famous paper written in 1956, Hubbert suggested that production rates for oil (and other fossil fuels) follow a bell curve: In new fields, clean, highly pressurized oil flows abundantly to the surface, and as new wells are drilled, production rates rise steadily. After about half the oil has been extracted, however, production rates start to go down. There's still oil left, but declining pressure, exhaustion of the best oil pockets, and increasing contamination bring it to the surface ever more slowly. Applying this production model to the entire United States, taking into account the rate at which new fields were being discovered, Hubbert predicted that oil production in the lower 48 states would peak around 1970 and then start declining.

Hubbert was roundly ignored at the time, but in fact oil production in the continental United States peaked in 1970, right around when he said it would. Thanks to new extraction technologies introduced since Hubbert's original paper was written, production has declined more gradually since 1970 than predicted, but it's declined nonetheless. Thirty-five years ago, the continental United States produced 9.4 million bpd of crude; today, it produces only about 4.7 million. Nor is this phenomenon unique to the continental United States; most oil fields peak and decline in the same way. Prudhoe Bay peaked in 1989. The North Sea peaked in 1999. Chinas massive Daqing field probably peaked a year or two ago. They're all still producing oil, but they produce less and less every year.

No less an authority than that legendary curmudgeon-cum-oil magnate T. Boone Pickens thinks this is clear evidence that world oil production has already peaked. "Global oil [production] is 84 million barrels [per day]," he told a conference of alternative-fuel advocates in May. "I don't believe you can get it any more than 84 million barrels. I don't care what Abdullah, Putin, or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today, and I know what it's like once you turn the corner and start...