The essential problem with the Peak Oil theory is that although it correctly understands that oil prices will rise as oil gets more scarce, it doesn't recognise

The essential problem with the Peak Oil theory is that although it correctly understands that oil prices will rise as oil gets more scarce, it doesn't recognise that higher prices cause a change in people's behaviour that causes more oil to be made available. (More exploration, better extraction methods, substitution with alternative energy sources, conservation of existing oil usage). All the oil we have is because the high prices of oil have caused people to go and look for it in the first place. High prices are a signal to society that we need more of something. If/when oil prices rise it automatically moves people into the energy business in order to solve the high oil price problem. The late economist Julian Simon has a terrific book about these issues: http://en.wikipedia.org/wiki/The_Ultimate_Resource http://en.wikipedia.org/wiki/The_Ultimate_Resource See also the "Conservation of Resources" section here: http://mises.org/rothbard/newlibertywhole.asp#p242 http://mises.org/rothbard/newlibertywhole.asp#p242