What is your opinion on peak oil?

Five years ago I answered a similar question here and at that time I believed that peak oil was probably no more than a decade away.

Today, the picture has changed dramatically and peak oil could very well be 50 years or more away. The change is the result of a change in technology and a scientific revolution that has been slowly emerging within the oil industry. Gas shales have brought about a revolution that so far has only had an impact within the United States, but has potential to change the entire world's proven resources of both natural gas and petroleum. Twice the energy equivalent of all the oil in Saudi Arabia has been found and proven within the United States, mostly in the past five years. While most of this newly discovered resource is natural gas, the same concept that led to adding over 100 years supply of natural gas to the US is now being applied to oil. Several geologic formations that only five years ago were unrecognized as potential reservoir rocks have already been estimated to hold multi-billion barrel accumulations of oil and condensate. Drilling horizontally and fracturing these shale formations has proven that significant amounts of oil and natural gas has never left these rocks that were the source of the oil and gas found in conventional reservoirs. The implications are huge, because some of these source rocks hold more oil at present, largely untapped, than they have expelled into the conventional reservoirs that are now considered "depleted" or nearly depleted.

Most of the restrictions on oil production that led to "peak oil" are now obviously not geologic or technology-based. Without artificial restrictions, the world could easily find itself awash in oil in the next couple of decades. However, the restrictions that remain are very significant, and will control the supply and probably contribute to serious supply shortages in the future. These restrictions are primarily created by political limitations, and secondarily by economic limits. As long as oil prices stay near current levels ($90/bbl) or higher, there will be new resources being added to the proven reserves, but if prices drop lower that utilization will shut down as horizontal drilling and the production rates of these new resources cannot be supported at lower oil prices. Political limitations that place large amounts of known petroleum reserves off-limits are probably the largest factor that will create supply crunches and the false appearance of "peak oil."

What will happen? Who knows, as politically oil is not popular and it is not beyond the current political powers to further limit oil production. Already, offshore drilling permits in the Gulf have become a defacto moratorium on drilling there, as permitting is proceeding so slowly as to be nearly nonexistent. Onshore drilling could easily be impacted and slowed by further environmental regulations. One major factor that will reduce the demand for oil in the near future and probably for many decades to come is that natural gas is beginning to be substituted for many oil uses. If natural gas were to substitute for transportation fuel (and it could easily) as much as 80% of the oil currently used in the United States would not be needed. In other words, oil demand is much more flexible than the "peak oil cataclysm" group realizes. As natural gas (which probably exists world-wide in quantities comparable to what has been found in the US in the past five years) replaces oil, the worldwide production of oil could decline by more than 50% with very little impact on the world as we know it.

I already drive a truck powered by natural gas.

The Americans are sitting on vast reserves of oil which will remain untapped until prices are much higher, and the middle east oil reserves are finally in decline. They can then hold the world to ransom.