Are we at the peak?

Peak oil is the term that marks the point at which we've taken half of all the world's petroleum out of the ground. And while that may not seem like such a bad thing--hey, we've still got half of it left--it's a problem for two reasons.

The first is that we're now using oil at a far faster rate than the average for the period when we pulled out the first half. So even if it was just as easy to get the rest of the oil as it was to get what we've already consumed, it wouldn't last nearly as long.

But the second problem compounds the first: it isn't as easy to get at the remaining oil as it's been up until now. In the early days of the petroleum age, you dug a hole and the oil gushed to the surface. Now what's left is often difficult to extract. It's in the nooks and crannies of the oil fields that have been in production for years, permeating porous rocks and soil. It no longer bubbles to the surface; sometimes an injection of steam or water is required before it can be pumped to the surface.

An analyst at Goldman Sachs who predicted $100 a barrel oil a few years ago--to a chorus of laughter--is now predicting it will reach $200 before long.

For more on peak oil, check out The Oil Drum.