[EXCERPTED: read the whole article here. - Ed.]

"The peak in oil production does not signify 'running out of oil,' but it does mean the end of cheap oil, as we switch from a buyers' to a sellers' market." – Energy Bulletin's "peak oil primer"

[W]ith spot oil surpassing the symbolic $100 (U.S.) mark yesterday for the first time, before easing slightly to close in New York at $99.62, more market watchers are asking: Has global production of oil hit a wall?

"I just don't think we're going to see increases in conventional oil production any more," [Jeff] Rubin [chief economist of CIBC World Markets] says. "I think (peak oil) is here."

So do citizens of a local group called Post Carbon Toronto, created in 2004 to "learn about peak oil and its consequences."

Their concern is understandable. Peak-oil theory suggests that once we've passed peak production, rising demand combined with declining output will cause oil prices to soar, perhaps dramatically as the potential for conflict escalates in many oil-producing countries.

Daniel Lerch, author of Post Carbon Cities: Planning for Energy and Climate Uncertainty, says knowing the exact date of peak oil isn't what's important.

"What matters is that oil prices will become volatile and progressively higher when demand increases and supply can't keep up."

If panic sets in, many contend the situation will spark a global depression.

Only those regions that wean themselves substantially from fossil fuels, by switching to emission-free energy resources such as renewables and nuclear, will be able to weather the economic storm.
[E]ven the "official" scenario is beginning to change. The International Energy Agency, which over the years has been relatively optimistic about oil output, was uncharacteristically gloomy in November with its latest outlook.

"Although production capacity at new fields is expected to increase over the next five years, it is very uncertain it will be sufficient to compensate for the decline in output at existing fields and meet the projected increase in demand," the agency said, declaring a trend that could threaten the world's energy security.

The effects of peak oil won't necessarily plunge the world into depression, but higher and higher energy prices will change the way we do business. Rubin suggests there will be a reversal of globalization trends, such as a return to regional economics.

"Distance is going to start costing on a scale never seen before, at least not in the context of post-war economies," Rubin says.