What is Peak Oil? It is the name geologists have given to a proven fact of oil exploration and development: when half of an oil field’s reserves have been extracted, the field will begin to yield progressively less oil with every passing year, until it yields zero.
This is why National Geographic, following the lead of many geophysicists, has announced that, because of Peak Oil, we are now living in the era of “The End of Easy Oil.” It’s not that there will be no more oil in the ground. There will always be oil in the ground. For producers the questions will be, how hard will it be (and thus how much will it cost) to get it out? And, how high will the going rate per barrel have to be to make it worth my while?
Now, why is Peak Oil important to us as investors? Because as peak is approached, what is left in the major fields is becoming harder to extract, reducing the growth of oil supply, thus increasing its price. And any commodity that is steadily increasing in price creates an investment opportunity for those with the knowledge and foresight to seize it.
To find out more about this ever changing situation, take a look at our original article "Peak Oil". Soon, we will be adding an archive of articles for this subject to complement our Oil Crisis Archive.