Why People Are Talking About "Peak Oil"

October 12 2009, 12:00 PM

Last year, the price of a gallon of gasoline exceeded $4, before falling slowly to where it is today---roughly $2.48 across the United States, according to Reuters. Still, today's price is a lot of money in an economy as tight as this one, which is exactly the point being made in Denver this week during a conference espousing the so-called "peak oil" theory. As Dave Bowden, executive director of the Denver-based Association for the Study of Peak Oil & Gas-USA, notes (via The Denver Post): "The harsh reality is, despite the best efforts of amazing technology, they're not finding as many of these big [oil] fields anymore." When oil reaches the tipping point, companies won't be able to produce enough to meet current demand, prices will skyrocket, and economies will suffer---governments could even become unhinged. That's why proponents of the theory argue for stronger fuel-efficiency mandates, more plug-in hybrids, and even the potential removal of limitations on offshore drilling to boost supplies. The idea of "peak oil" doesn't resonate with everyone. As you might expect, many people in the petroleum industry consider it hogwash---people like Michael Lynch, the former director for Asian energy and security at the Center for International Studies at the Massachusetts Institute of Technology.

He's an energy consultant who writes in The New York Times: "A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references, and ignorance of how the oil industry goes about finding fields and extracting petroleum." Regardless, some communities in Northern Colorado have been preparing for peak oil for some time, as 5280.com contributor Joshua Zaffos wrote in July 2007. In other natural-resources-related news, solar power is outshining the gas industry in Colorado, according to The Associated Press.