Since 2005, the global production of oil has remained relatively flat, peaking in 2008 and declining since, even as demand for petroleum has continued to increase. The result has been wild fluctuations in the price of oil as small changes in demand set off large shocks in the system.

In today’s issue of Nature, two authors (the University of Washington’s James Murray and Oxford’s David King) argue that this sort of volatility will be all we can expect from here on out—and we’re likely to face it with other fossil fuels, as well.

Limited supply

The notion of peak oil is a fairly simple one: oil is a finite resource and, at some point, we simply won’t be able to extract as much as we had previously. There really is no getting around that limit for any finite resource. The issue that has made peak oil contentious, however, is the debate over when we might actually hit it. Murray and King are not the first to conclude that, even as the arguments were still going on, we had already passed oil’s peak. Even though prices have gone up by about 15 percent per year since 2005, production has been largely flat.

The strongest argument against this being a real peak is the increasing volume of petroleum reserves reported by many countries. Even assuming those estimates were reliable (which the authors aren’t entirely certain about), these reserves have clearly not enabled increased production. In the US, for example, production as a percentage of total reserves has dropped from nine percent to six percent over the last three decades.

“We are not running out of oil,” the authors argue, “but we are running out of oil that can be produced easily and cheaply.” This creates significant delays before any of the new reserves can be tapped, and it limits the amount of oil that can be economically extracted from them.

Non-conventional sources like oil sands have the potential to contribute to the global supply but, so far at least, they haven’t managed to do so; current production estimates indicate that they won’t any time soon.

The struggle to mobilize supplies has taken place against a backdrop of falling production and rising demand. Most established sources of oil are seeing declines in the area of five percent annually. Given that decline, it will be extremely difficult to meet demands projected for 2030—in fact, we’d have to add the equivalent of our total current production. In a fit of understatement, the authors deem this “very unlikely to happen.”