Disputing peak oil theory
First, let's assume for the sake of argument, that oil, and in fact all hydrocarbons, are an artifact of decaying biologic material exposed to geological conditions which eventually transforms this organic material into the class of minerals known as hydrocarbons. Either that, or let's assume that regardless of how oil is formed, what counts is how much we can harvest and use at the end of the day.
PO theory says that as hydrocarbon resources become more difficult to obtain, the cost of these commodities will increase to reflect how scarce they become. For peakoil theory to be meaningful, it asserts that the dwindling supply of hydrocarbons will continue to shrink over time, and never again grow.
As any capitalist can tell you, the concept of supply & demand governs the tangible value of a given commodity, so that products or services in abundant supply tend to carry less economic value than products or services which are less available. This process is the teeth of peakoil theory; that as energy resources become more scarce, the price of our energy will rise with it, until it's so expensive that the basic infrastructure dependent on this energy supply falter and finally fail.
The depletionist argument fails to recognize that it is this very process which has driven the solutions to similar challenges throughout history.
From our myopic point of view, nestled snuggly in the greatest period of economic expansion ever known, we measure our progress by the yardstick available to us. When you own a hammer, every problem looks like a nail.
We would do well, to observe what history has to teach us about this world, and humanities role.
There is endless speculation to be had, on the downstream effects of a permanent and rising price index for energy worldwide. From a minor "correction", to flesh eating zombie hordes, there is a spectrum of branches into which humanity could stumble. We are left with only the known examples of history to guide us into this unknown future.
While there are notable examples of structural collapse of ordered systems caused by depletion of critical assets in human history, there is also an unbroken track record of humanity as a whole continuing to build upon the foundation of past accomplishments in new & inventive ways which were all but impossible to foresee, and greatly affected the nature of life on this planet. With case examples too numerous to mention, suffice to say that this very post is clear evidence of this undeniable fact... we are still here.
So while more expensive energy undeniably means unforeseeable economic & social consequences, no more so than previous challenges faced by humanity in it's past. Sometimes our solutions were pretty ugly... sometimes we did better. The point is that as a species, we have been forced by circumstance to reinvent ourselves, and what it means to be human many times before, and at great peril. And we have through tooth & claw, experiment & blunder, faced these obstacles, suffered the consequences, and emerged battle worn, but also wiser than before. With no evidence to the contrary, history says that we will simply reinvent ourselves yet again, and continue the experiment.
On a less esoteric scale, more expensive energy, means just that; more expensive energy.
So yes... if peak oil theory is correct, then mother nature is going to give us a spanking, and take away our dessert, but it will hardly be the first time. We forget the terrible sacrifices generations of people have made along the way, in order for us to enjoy this prosperous time. We may well be called upon to make similar sacrifices to those of our forefathers, and endure difficult times. And there is every reason to expect, based on the example of history, that we will not only survive this process, but emerge a little wiser and stronger.
So we might lose some of the "comforts" that a prosperous global economy can provide. But that's a far cry from "The sky is falling" predictions of the depletion crowd.
If we agree that higher prices will provide incentive for companies to produce energy products, then I say that to the extent that oil prices rise, so will this incentive. Therefore if depletion arguments are correct, and world production of oil is beginning an irreversible decline, then I postulate that this price incentive will also climb in correlation with rising prices. It is difficult to imagine what lengths we might go to in our race to solve this energy dilemma, but then it's always been difficult to predict what the solution would be.
So the only real question remaining, is will we have a "managed" transition between now and then, or a "fly by the seat of our pants" scenario, which has served us well to date. It at least seems clear, that given the incredible profit incentives which would be involved if peak theory is correct, there will be no shortage of clever people who jump to this challenge until it's solved.
Business goes where the profits are. So we have been coasting on cheap energy for 100 years, and have barely scratched the surface of the real physics behind thermodynamics and the physical sciences. If we are entering the time of declining hydrocarbons, (something which itself is not yet known), then we are also entering the age where the physical sciences will literally explode with the interest which higher prices have generated.
A difficult economic time?
But then, we have been there before.