Peak oil, or the depletion of world oil supplies is a controversial subject. It was much easier to believe in peak oil when the price of a barrel of crude was near $150.00. When it sank to the thirties it was forgotten. Now that oil is heading toward $100 a barrel again people are wondering if there really is such a thing as peak oil.

The theory of Peak Oil was first proposed by Shell Oil company geologist Marion King Hubbert. He proposed that the rate at which the world was using oil was going to outpace the rate of new fields being discovered.

He was partly right and partly wrong. Hubbert did not foresee new technology such as Horizontal Drilling and Secondary Recovery.  Technology such as 3D seismic surveying has found more new oilfields offshore and drilling rigs have been developed to reach far out on the continental shelf in deep water for new oilfields.

The world has plenty of oil. What is running out is cheap oil. This is because unlike fifty years ago, now you typically cannot take a small drilling rig and drill a couple of thousand feet and find oceans of oil. The fields where "easy oil" was discovered, such as Spindletop in Texas and the oilfields of Bakesfield California, are all gone. Nearly every square foot of the earth has been explored for these kind of shallow fields. What is left is deep and expensive to get at.

An offshore drilling rig such as the Perdido Spar costs into the billions of dollars. The break even point now for oil companies to make a profit is somewhere around $50 a barrel on land and $70 offshore.

All you have to do is search the web for "peak oil hoax" and you will get hundreds of hits. There are many people who disbelieve that we are running out of oil. They are partly right. There is plenty of oil left in the earth's crust, it is the "cheap oil" that is running out, fast.

For more on the subject of peak oil see Peakoilstories.com