Are we at the peak?

Have we reached the peak in oil production? Is the supply all downhill from here?

Jim Manzi at National Review Online has some thoughts:

Crude oil production will reach a maximum at some point in the future. I don't know when that will happen, and the record of those who have tried to forecast this has not been very good over the past 70 years or so. When that happens, the price will probably rise. We will develop technological alternatives and find substitute fuels. It's not time to start burying Krugerrands in the backyard.

...Roughly speaking, forecasts indicate that we are 20 - 30 years from peak oil today, just as forecasts generally indicated that we were 20 - 30 years from peak oil throughout the 1970s and 80s.

Unsurprisingly, the DOE has taken a serious look at this question. Their best guess (and they are rigorous enough to put a range of many decades on this) is that peak production will be reached sometime in the middle of this century. The International Energy Agency projects that production will continue to increase at least through 2030. So does OPEC.

Oil production may well increase over the next few decades. One problem we're having to deal with, though, is the increase in consumption as third-world countries ramp up their use. If we increase the slope of the consumption curve, the supply curve will fail to keep up that much sooner.

On the other hand:

On an inflation-adjusted basis, this is almost exactly what oil cost in 1980. Does that mean oil production peaked in 1980?

I'll also note that while the world spent about 6 percent of its total economic output on oil in 1980, this is down to about 3.5 percent today. Maybe this is why I see no observable signs of the collapse of modern civilization resulting from the current run-up in oil prices.