"Peak oil" refers to the idea that at some point oil production will reach its maximum, after which it will enter a phase of decline. Although a tremendous amount of unrecovered oil still exists in the world, some oil, perhaps trillions of barrels, will remain out of reach of energy companies -- either because of the cost of production or because of engineering challenges. What's more, by the time we would be able to tap all of the world's oil supplies, we'd be so besieged by the effects of climate change -- itself brought on by burning fossil fuels like oil -- that producing more oil would only compound the world's problems.

Peak oil is a legitimate field of inquiry for economists, engineers, geologists and practically anyone connected with the production of energy, but it has also become a popular topic of discussion for conspiracy theorists and people who believe that some inevitable oil shock will bring about war or even destroy the global economy.

As for when peak oil might be reached, that's less clear. Some contend that it's already happened, or that we'll reach peak oil in within the next 10 to 20 years [source: Lynch]. But for many experts, the much-prophesied moment of peak oil continues to be pushed farther down the road, as new extraction techniques continue to open up previously untappable reserves. And even now, well into the petroleum age, new oil deposits are occasionally found, while the sizes of others are often determined to be larger than originally estimated.

In any event, oil remains rather cheap as an energy source, despite surging demand in the developing world (i.e., China, India and other rising economies). Worldwide, a third of all energy used is oil, and nearly all transportation relies on oil [source: Energy Bulletin]. This is both a good and bad thing, for while oil is relatively cheap and well established, the environment and public health would surely benefit from a dramatic shift away from fossil fuels. And as we have seen in recent years, the extraction of oil can also inflict a tremendous toll on the environment. Peak or not, energy doesn't come without a cost.

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