Most authorities expect the world output of conventional oil to peak in the next decades but there is no consensus as to when. Estimates of the timing of the peak range from as soon as 2007 to as late as 2037 in the case of the Energy Information Administration of the U.S. Department of Energy. By applying a parabolic projection technique to data from the Mean Case of the Year 2000 Assessment of world resources published by the U.S. Geological Survey, this author found that this watershed in the energy system will occur in the period 2017-20. Before the peak is reached, the oil and thus the energy system as a whole will continue substantially out of internal equilibrium because of the present unstable inverse pattern for the supply of oil. Expensive options such as the oil sands of Alberta are being expanded while large reservoirs with low technical costs of production are idling mainly in the Middle East. Only during times of economic downturn is there an approach to equilibrium conditions.
This paper deals with the situation anticipated after the peak has passed. There will no longer be any reason for the inverse pattern of oil supply to persist because all major discovered sources will be in production by that time. Though prices will be higher, the energy field as a whole will behave more rationally on this account. Instead, a very different problem is likely to arise which may once again result in internal disequilibrium. It may not be possible to supply liquid fuel from non-conventional sources fast enough to avoid the simultaneous deployment of more expensive sources out of minimum-cost sequence. The paper explores some of the factors involved in the rapid deployment of energy options and the relevant limiting factors in the context of supplying energy to a growing vehicle fleet. The object of a successful energy policy should be to maintain the system as close to internal equilibrium as possible.