Peak Oil on Time Magazine

Excerpted from article by Matthew Simmons on time.com :

For decades, almost all public-policy planners, aided by most oil experts, assumed that the Middle East had vast quantities of proven oil reserves that could be extracted at extremely low cost, thereby enabling oil demand to grow to almost any level. After spending more than two years researching my book Twilight in the Desert, I am convinced that it is highly improbable that Middle Eastern oil - and particularly Saudi Arabian oil - can grow to those far higher levels. Instead there is a risk that Saudi Arabia's oil output and the rest of the Middle East's oil supply may start to decline.

The bottom line: the global oil supply has probably peaked. While the world expects to consume 120 million bbl. a day two decades from now, actual supply may be half that rate. This conclusion aptly portrays the potential magnitude of the energy ditch we are now in.

In the near term, the global economy needs to significantly reduce its oil intensity. Because 70% of the world's oil is used as transportation fuel, that would be the place to start. If a high percentage of products now transported by large trucks were shifted to the global rail system, an efficiency savings of three- to tenfold could be realized.

We also need to pull out all the stops to find new oil supplies. A second change would come through embracing "distributed work." And we need to manufacture more products and grow more food close to markets where they will be consumed.

If a master plan is quickly adopted on a global scale, the world can safely cope with a peak in oil production and create a more sustainable and enjoyable economy at the same time. If we ignore these changes and peak oil does occur, the unforeseen consequences could create a far darker world.

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