Total world liquids production has recovered to 99% of 2018 average level but crude oil plus condensate has not and remains more than 4 mmb/d below late 2018 levels (Figure 10). The world is not running out of oil but investors and credit markets are unwilling to underwrite the drilling necessary to increase oil output. The likelihood of a secular return to lower oil prices is as unlikely as is a technological breakthrough that results in enough new oil supply to modify pricing. That is because the “lower-for-longer” pricing after 2014 because of shale plays was a relatively insignificant anomaly in the larger price scheme in Figure 9.

The consequences of higher energy prices following Russia’s invasion of Ukraine have made the world more energy-aware. For some, they have increased the resolve to make a transition away from oil and other fossil fuels. At the same time, they have shown just how dependent we are on fossil energy, and will continue to be for decades to come.

Peak oil was a model that made reasonable if simplistic assumptions based on M. King Hubbert’s method of forecasting future oil production trends from proved reserves.

What I am describing is not a model. Oil quality has decreased, production decline rates have increased, and long-term secular prices are higher. Those are facts, not theory.

The sooner we stop expecting a miracle of technology or a quick transition to renewable energy, the better we will be able to cope with a more difficult energy future.