We've already extracted the lion's share of the fast, cheap, easy-to-reach stuff. What remains is slower, more expensive and harder-to-reach. Case in point: the deepwater well that's spewing 2,500 bbl of oil a day into the Gulf right now.
>Furthermore, as consumption leads to higher prices, we will produce more efficient and productive ways to extract it.
So I keep hearing. I'm highly skeptical that we can improve technique fast enough to start pumping oil out of the Alberta Tarsands at the same rate that we've been pumping it out of Ghawar for the past forty years.
That's the real issue: whether some combination of conservation, new sources and new techniques can somehow manager to cover the escalating annual shortfall in conventional production, without painful demand destruction via price spikes.
My sense from studying this stuff of the past several years is that we're going to spend a long time behind the eight-ball, lurching from economic crisis to economic crisis while our real living standards are slowly ratcheted down.