A number of us interpreted the 2005-2007 plateau in liquid fuel production as the onset of peak oil, or at least the onset of a "bumpy plateau" in oil production. Staring at the incoming data each month, it now appears to me that that view was probably wrong: even if you discount Iraq (and who knows what will happen there), it's still the case that global oil production (or at least total liquids) can likely go above the 2008 peak, and given that, it now appears that there is going to be at least a gentle upward slope to global oil production in the post 2004 period taken as a whole:
It seems particularly significant that most of the post-great-recession production recovery is coming from non-OPEC production.
But, on the other hand, the sunny mainstream view also proved to be wrong. For example, if you go back to the US EIA's 2005 International Energy Outlook, you find that they completely failed to anticipate the plateau and consequent price spike:
Oil prices were about to double, and are today, in the aftermath of a huge recession, off the top of that chart; they didn't see it coming at all.
So what do those events mean?
It seems the most viable interpretation is something along the lines of what Chevron CEO David O'Reilly said in 2005, the era of easy oil is over:
As populations grow and economies take off, millions in the developing world are enjoying the benefits of a lifestyle that requires increasing amounts of energy. In fact, some say that in 20 years the world will consume 40% more oil than it does today. At the same time, many of the world's oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract, physically, economically and even politically. When growing demand meets tighter supplies, the result is more competition for the same resources.In particular, the rest of the world used to be able to meet growth in global oil demand while maintaining a large cushion of spare capacity in OPEC - this is no longer true, the OPEC spare capacity cushion is small (and was very small in 2005-2007), and it doesn't seem likely that it will ever get very large again.
So, if not peak oil, this is obviously an important precursor to peak oil - we are in an era in which global oil production can be increased, but it's more difficult to do so; it requires more effort and investment.
It's very difficult at this point to say how far we are from peak oil in years - the uncertainty due to Iraq alone is enormous. However, we perhaps can quantify "more difficult" somewhat. In this next graph, I estimate the fraction of global GDP - perhaps we should call it GCP for "global civilizational product" - expended on oil. In particular, I took GDP from the IMF (latest World Economic Output) estimated at purchasing power parity - which is about $70 trillion at the moment. Then I estimated the amount spent on oil by taking the average price of imports to the US, and multiplying that by global oil production (from the EIA's table 4.4). Obviously, this is slightly rough, but it's probably accurate to 10% or 15%, and the error is likely to be reasonably stable over time. And to the best of my knowledge, nobody produces a detailed breakdown of global GDP by industry, so it's not easy to be much more accurate than this.
Anyway, the resulting data (only since 1980 unfortunately) looks like this:
2-3% is not that much. Probably there is room for this ratio to go a lot higher before it would cause the global economy to grind to a halt altogether.