Why you may soon pay $10 a gallon for gasoline
Those who believe the peak is coming soon see a rising threat to the existence of the human race.
Matthew Simmons, who runs a Houston-based investment bank specializing in energy, says he believes that the world needs to curtail its oil production for several years while trying to get a better handle on what's left of the supply.
"It's very complicated, but the idea that it's not around the corner is really far-fetched in my opinion and it (peak production) may have already passed," says Simmons, who is writing a book about the depletion of Saudi Arabia's oil reservoirs.
Simmons says many of the world's largest oil fields, particularly those outside the former Soviet Union and the 11 nations that make up the Organization of the Petroleum Exporting Countries, no longer produce the volume they once did.
Though the yield from Russia and other parts of the former Soviet Union has increased in recent years, that growth has come because producers have squeezed old fields, not because they've discovered new fields, he says.
"It's really hard to find an area outside of OPEC that you could make you put your hand on your heart and say, 'I see a lot of growth coming in the next five years,' " he says. "Maybe we'll find a new basin somewhere, but we haven't done it in 30 years."
Simmons looks around the world and sees no other reasons for encouragement.
He says China has two fields, Daqing and Shengli, that account for 50 percent of that country's production. He says internal reports estimate production in these fields will drop by half in the next five years.
The bulk of Mexico's production comes from Cantarell Field, where it took a $10.5 billion nitrogen injection project to increase production.
The North Sea â between Great Britain and the European mainland â and Iran are other areas in decline, he says. Iraq's fields are being surveyed, but the nation's oil infrastructure was badly damaged by Saddam Hussein's neglect and war.
"There is a lot of potential for negative supply surprises," Simmons says. "There is very little potential for positive supply surprises."
It's a problem the world has been slow to recognize, and time is running out, he says.
"How do you solve it?" he says. "I don't know, but if you don't solve it, it's a show stopper. If you come back and think about the role of what modern energy plays in society, it's water, it's food, it's transportation. You really get into talking about much more than just motor gasoline prices."