It is fact that there is only a set amount of oil in the earth. As we continue to extract the cheap oil, all that will be left is more expensive, harder to find oil.

The latest discoveries have been expensive projects which extract oil from deep water, rocks, and sand. The production cost for this oil can run up to 2,000% more (for conversion of shale)!

This coincides perfectly with the peak oil curve that says that a finite resource such as oil will eventually run out.

The Toyota president Katsuaki Watanabe had this to say about the future of the auto industry:

" 'Without focusing on measures to address global warming and energy issues, there can be no future for our auto business,' he told reporters in Tokyo, adding, 'Our view is that oil production will peak in the near future. We need to develop power train(s) for alternative energy sources.' "

If auto industry is already changing it's focus because it believes peak oil will occur, I'd say this debate is over.

Oil is finite - it will run out if we don't stop burning it. We can happily increase the rate we burn it of course - up until it runs out. It's simple.

I would think that oil is a finite resource. However, the worst argument one could put forth in favor of peak oil theory is to reference current prices. The truth is the oil futures market is rife with manipulation. You literally have oil trading desks taking both sides of futures trades so they can bid up the price. The demand fundamentals are not there and eventually investors wake up and sell off their positions causing price declines. In the meantime, we pay more for gas at the pump. Reference not the peak price of $147bbl in 2008, but rather what is going on now: Oil was about $30bbl in January and rose to over $70 this summer. Then people realized we are sitting on oceans of oil in storage and sold off and oil is currently retreating to below $60bbl- even as China and India grow at +5% GDP clips.

We have been talking about this peak oil thing ever since they hit a gusher in Penn. Just like in 1990's when oil collapsed to $10bbl.

One other thing that peak oil doesn't consider- that is the fact that demand could actually decline due to crushing economic recessions felt worldwide from an increasingly integrated world economy, which will translate into lower energy usage. But i guess that will never happen eh?