A Few Definitions of "Peak Oil"

A hypothetical date referring to the world's peak crude oil production, whereby following this day, production rates will begin to diminish. _Investopaedia

This definition is almost meaningless, in that it allows for a potentially infinite number of "peak oils," over an extended time period of fluctuating production (for whatever reason).

Consensus definition: The theory of “peak oil” is the point where practical oil extraction has reached its maximum level and is entering a state of permanent decline. _Energy101

This is a more useful definition, in that it includes the term "permanent decline." But since such a "permanent decline" in oil extraction can only be seen in retrospect, and can be due to a wide range of reasons -- including the lack of economic need for crude oil -- it is far from perfect.

...“peak oil” – the point at which the world’s oil supplies go into irreversible decline – is a long-running argument... _FT

This definition looks at world oil supplies going into "irreversible decline." By using the vague term "world oil supplies," it is less useful than the previous definitions.

Peak oil is the point in time when the maximum rate of petroleum extraction is reached, after which the rate of production enters terminal decline. _Wikipedia

This definition is more precise, referring to a "terminal decline" in the "maximum rate of petroleum extraction." The Wikipedia author uses the idea of the lifecycle of an individual oil well as analogous to the lifecycle of global oil production. It is a simple idea, but also more than just a little simplistic. That may explain its wide appeal.

Peak oil theory is that oil production will not just peter out, it will fall catastrophically starting right now, and that no alternative energy source will arise to take its place. The result will be inevitable disaster... _Facts+Logic

This is the popular view of peak oil -- the catastrophic conception which has such a wide and quasi-religious following. In this view, peak oil is not just about declining production of conventional crude. It is about the abrupt and catastrophic collapse of civilisation that accompanies the peak oil aftermath.

Point when production of crude oil word wide reaches capacity and is evidenced by an increase in oil prices. _BusinessDictionary

This is a more practical definition, which allows one to use the proxy of "oil prices" to decide if crude oil production has reached capacity or not. But oil production can "reach capacity" with increases in oil prices an infinite number of times. Are they saying peak oils can occur in unlimited numbers.

Here is an increasingly popular -- and exceedingly weaselly definition of peak oil:

The peak in oil production does not signify 'running out of oil', but it does mean the end of cheap oil, as we switch from a buyers' to a sellers' market. For economies leveraged on ever increasing quantities of cheap oil, the consequences may be dire. Without significant successful cultural reform, severe economic and social consequences seem inevitable. _Energy Bulletin

In this definition, "peak oil" has been baited and switched from an issue of depletion to an issue of pricing. We increasingly hear the phrase "the end of cheap oil," as if consumers have ever considered oil to be too cheap. In fact, oil prices have always gone through periods of boom and bust, up and down, and continue to do so.

The recent rapid boom-bust of 2007/2008 through 2009 illustrates the point. Unfortunately, since that turbulent cycle, governments such as Russia and Saudi Arabia have become institutionally addicted to higher levels of oil prices than the global economies can easily endure. This sets up a conflict of interest between producers nations and consumer nations which can only end badly. Mixed producer/consumer nations such as Canada, the US, Brazil, and soon-to-be China, will have to deal with the conflict both internally and externally.

Why is the Energy Bulletin definition "weaselly?" Because in current times, oil prices have gone up largely due to an unforeseen skyrocketing of demand from the formerly impoverished China and India combined with multiple political factors which act as drags on oil production around the world. None of that has anything to do with "Hubbert's Peak." Demand for crude in the developed world -- the world that Hubbert and his cohorts were thinking of -- is declining.[Added 6 April 2012]

A lot of things influence oil prices besides simple supply and demand equilibria, including wars, rebellions, political constraints, and much more. Oil prices have peaked several times over the last one and a half centuries, leading many disciples of the oil apocalypse to declare "peak oil" prematurely. Had they invested their life savings in their belief system, they would be paupers.

There are more definitions of peak oil out there, of course. It is said that there are as many conceptions of "god" as there are believers. The same could be said of peak oil, if one includes the many deep, individual emotional connotations of the term.

Not all peak oil believers are also doomers. Many energy professionals who believe in imminent peak oil also think that civilisation will find a way to mitigate most of the catastrophic fallout from energy shortages.

But it can not escape notice that most modern energy shortages are due to political reasons and policies. Just as wars cause virtually all modern famines, political decisions and policies cause virtually all energy shortages.

So when will true energy and resource scarcity and depletion -- aside from arbitrary and capricious political machinations -- set in? That depends upon how smart or how dumb humans come to be. It should be clear that the underlying practical question is not actually about "peak oil" at all, but about "peak energy" and "peak resources."

But peak energy and peak resources are relative terms, and depend upon what humans are capable of doing, technologically, scientifically, economically, and psychologically. Humans could be much smarter on average, or they could be much stupider. Evolution supplied humans with a wide range of intellectual complements.

As for why humans are not sailing to other stars on fusion powered spacecraft -- that reflects on the particular skew of the range of intellectual complements which evolution supplied us with. Human ingenuity is the key. There is no shortage of energy or resources, there is only a shortage of conceived ways in which to utilise what is there in a clean and affordable manner. That is a mental limitation, which hobbles most of the world populations. Most of the rest of the world's populations are hobbled by political limitations.

Any other definitions of "peak oil" would be welcome.