As prices tumble, doomsayers hold fast to prophecy

It's been a tough week for peak-oil theorists - those limits-to-growth doomsayers who argue the world's crude oil supply has begun an inexorable decline that will force prices ever higher. Abullah Jum'ah, chief executive officer of Saudi Arabia's state-owned Saudi Aramco, directly challenged their theory, saying there is plenty of world oil left to be recovered. Crude oil prices on the New York Mercantile Exchange - which hit a record $78.40 in July - traded briefly below $63 a barrel before settling at $63.33, down $2.92 on the week.

But Kenneth Deffeyes, a leading peak-oil theorist from Princeton University, has seen nothing that shakes his conviction. On the contrary, he said he can point to the precise month when global crude production peaked: December, 2005. Prof. Deffeyes, a geologist who last year published Beyond Oil: The View from Hubbert's Peak, said short-term market fluctuations in price have absolutely no relevance to the debate over the life expectancy of the world's crude oil supply. "This is 99-per-cent physical; 1-per-cent economics," he said in an interview. "There is only so much oil in the ground and we have now reached the peak of productive capacity."

- Even OPEC is talking about high and volatile oil prices. Remember that volatility means sudden, unpredictable moves both up as well as down. Hold on to your seat-belts.

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