The end of cheap oil is nigh. Although there is plenty left untapped, oil will become progressively more expensive to extract, with irrevocable consequences that impact profoundly on each and every aspect of human life. Even an increase in overall costs by 10% in transportation, imports and exports, processing and manufacture could jeopardise the world economy, and it is worse than that. There is almost no modern commodity that does not rely at some stage on oil or gas, and that includes food!, and it is thought in some quarters that a peak in oil production "peak oil" is either upon us already or at least by 2010.
If we try to save oil by using natural gas instead, "peak gas" will arrive sooner than by 2100 as is currently predicted. These dates refer to "world production" of oil and gas, and are misleading because the "peak" in production will vary from one gas or oil field to another. Precise dates are difficult to divine since no one knows for sure exactly how much of these fuels lie in reserve. Shell Oil got itself into trouble recently for somewhat overestimating the residual quantities of oil in the fields under their banner of exploration and extraction. Perhaps it was a simple mistake. I attended a conference in October on the provision of "U.K. Energy to 2050" (http://www.geolsoc.org/uk/template.cfm?name=PR60") where a spokesman for B.P. tried to convince the assembled delegation that there was plenty of oil left, and that for each additional one trillion barrels remaining, the "peak" in production would be shifted forward by about 33 years. Accordingly, if peak oil will strike in 2010, according to currently accepted reserves, another trillion barrels means the inevitable will not hit until 2043, and so on to 2076 and 2109. There is, however, no hard evidence for such additional aliquots of oil, and peak oil remains incontrovertible at some point. It is only a matter of "when?" not "if". Hence it makes sense to prepare for the eventuality by reducing demand on the resource; and yet demand increases inexorably, particularly in the developing world (notably China and India) who's citizens aspire toward a western lifestyle, which even the west can no longer afford.
The concept of "Peak Oil" originated in the mind of Dr M. King Hubbert, who published the fundaments of his ideas in a seminal paper in 1956. He arrived at the conclusion that there will be a lag of about 40 years between the peak in oil discovery and the peak in oil production: "peak oil". Hubbert's prediction was almost spot on for U.S. peak oil. The peak in oil discovery occurred in 1929 and peak oil in 1968; it's slightly premature arrival (by one year) being explained by more efficient extraction methods which were introduced during the latter part of that period. In the Middle East, peak discovery occurred in the early 1970's, so according to Hubbert, we might expect peak oil to occur there within a few years of 2010.
Such "Hubbert's Peak" analyses have not found universal favour. I mentioned that oil companies tend toward an optimistic view of how much oil actually remains in reserve to be extracted. Almost certainly, more advanced drilling methods have depleted the deposits more quickly than would have been the case using older technology. Accepting these and many other uncertainties, it is probably sensible to believe that peak oil is not so far away that we can ignore it. A Hubbert's peak is a "bell-shaped" curve: a plot of oil production versus time. There is a steady rise in production that follows discovery, which then peaks, and subsequently falls away. It is the letter portion of the curve that is dangerous, since it represents the failing of the oil jamboree, when the raw resource becomes progressively more expensive to obtain - this occurs once about half the original reserve is left. Since everything depends on oil, either as a raw manufacturing material, or as a production fuel, or both, the impact of peak oil on the world economy will be both profound and unpredictable.