Peak oil has gotten a lot of attention over the past five years or so, though many still don't know about it and most who have heard about it, I suspect, don't believe it. The basic premise of peak oil is that petroleum is a finite, non-renewable resource. (Some people dispute even that, but let's leave their fantasy alone for this piece.) We've been tapping into it for about 150 years, and at some point we're not going to be able to produce enough to meet the ever-growing demand.
One common misconception is that all we need to worry about is how much of the stuff is left in the ground. Actually, though, it's the rate at which we're able to pump it out of the ground and get it to market that matters. Since about late 2004, that rate has been about 85-87 million barrels per day. The rate that we can produce it puts an absolute cap on how much demand we can satisfy.
The point I want to make here, though, is that the rate of oil production follows another rate - the rate of oil discoveries. The only oil we can pump out of the ground is oil that we've discovered previously. What that means is that if oil discoveries decline, a decline in oil production must follow.
The graph below shows clearly that discoveries peaked in the 1960s. All this talk you hear in the media about huge new discoveries...well, I've been watching those stories for the past decade, and you can see how they've affected the graph below.
So, the question is, what are we doing to get ready? You can take this as an indication that the end of civilization is upon us. Or, you can look at the bright side.