I have referred to the essence of the latest upwelling on the subject of Peak Oil in previous postings, which is underpinned by the mostly Russian idea that petroleum (oil) is produced by chemical processes within the earth and is not a product of decomposition of dead animals and plants as a result of being cooked within the near surface strata of the planet over millennia. There are two books written on the subject, which expand upon the notion that either by bacterial action on iron oxides or the hydrolysis of metal carbides at some kilometers depth, hydrocarbons are produced. I discussed the elements of both in a recent posting, "Vast Oil and Life in the Deep Earth," which I also posted as one of my regular monthly columns at scitizen.com, respectively in respect of "The Deep Hot Biosphere" by Thomas Gold and "Jagged Environment" by Chris James. This is known as the "abiogenic theory."
Now, F. William Engdahl has countermanded his stance that oil is about to run-out, and believes that the biogenic theory of oil production, favoured the the West, is untenable. I think there is a good point being made here, that for the latter hypothesis to be true, to form the massive Ghawar field in Saudi Arabia, dead dinosaurs etc. would have needed to be trapped to a total volume of 19 miles cubed, at depths maybe 4,000 - 6,000 feet below the Earth's surface, and elsewhere at offshore locations such as the North Sea and the Gulf of Mexico, in rock formations. There are various theories about the events that might have occurred at the Earth's surface (we don't really know what has happened or still does at its greater depths), but it is possible that the pervasion of life and its separation following the break-up of Pangea, tectonic motion or pole shifting (that is the literal slipping of the Earth's crust over the semi-fluid asthenosphere; a terrifying scenario to put it mildly!) might have left its remains thus... but nobody really knows.
However, there may well be many different sources of petroleum. Hydrocarbons may represent an "energy minimum" into which more complex molecules can be "cooked", and there may indeed be unimaginable trillions of tonnes of "oil" lying under our feet. Some may come from animal/plant detritus, and other, presumably deeper volumes from geochemical processes. But this changes nothing about the crisis (in transportation fuel especially) that faces the world. If such reserves do exist, how accessible are they, and in what amount can they be reasonably extracted?
My understanding is that "deep-drilling" is necessary to access these sources, irrespective of their origin, and so there are limits to how fast we can pull petroleum from the earth to match the 30 billion annual barrels that we currently demand from her. It is a simple question of supply and demand, and we are demanding an inexorable amount of oil. Russia is apparently drilling deep wells around the Caspian coast, with alleged success, and yet I can find no confirmation of this. Either Russia will become the world's greatest producer of petroleum and hence the major world superpower, transcending the United States, or it will suffer the fate of all industrialised societies, which will necessarily relocalise into smaller communities in an effort to survive. In any case, the preponderance of cheap oil is over, and ergo the modern world and our customarily associated lifestyles upon it. There will always be oil, in all likelihood, but it's going to cost.
(1) "The Deep Hot Biosphere", by Thomas Gold, ISBN: 0-387-95253-5, Copernicus Books, 2001. (Available from Amazon.com and Amazon.co.uk).
(2) "Jagged Environment", by Chris James, ISBN: 0-954-00940-1, JEpublications, 2001. (Available from Amazon.co.uk but not Amazon.com...). Or from http://www.jaggedenvironment.com
(3) "Confessions of an "ex"- Peak Oil Believer," By F. William Engdahl: http://www.engdahl.oilgeopolitics.net/print/Peak%20Oil.htm