Peak oil or "Hubbert's peak" theory is the speculation that after a singular event there will be peak in the planet's oil production. After that peak has been reached, oil production will decline. Hubbert first proposed his oil peak theory in 1956 and after that, went an proposed theories for coal and gas. He assumed that after fossil fuel reserves (oil, coal, and natural gas) are discovered, production increases exponentially as more extraction commences and more efficient facilities are installed. At some point, a peak output is reached, and production begins declining until it approximates an exponential decline. Currently, it is expected that global peak oil will be reached in 2020.
According to the Institution of Mechanical Engineers , there are 1.3 trillion barrels of oil reserves left in the world's major fields. At current consumption rates, this is enough to last for 40 years and by 2040, production will drop to around 20% of what we currently consume and be at around 15 million barrels per day. However, as new technologies are developed and new reserves are found (Brazil recently discovered a field with five to eight million barrels) this may well be extended, but even as oil companies manage to eke out every last drop, one day we have to face the fact that the cost of oil will make it too expensive to travel.
As the cost of fuel rises and it does become more expensive to travel and transport goods and fuel, alternative local solutions are going to be needed. The use of biofuels, such as bioethanol, has been discussed but if we're going to be restricted in our travel, then local solutions are going to be needed. The problem with bioethanol is that it's made from feedstock and takes up a lot of space in return for relatively fuel. But, now there is a solution.
Butanol - the next generation of biofuel - has a longer hydrocarbon chain which makes it more similar to gasoline than ethanol which makes it more suitable for using in unconverted combustion engines. Its other advantage is that it can be shipped using existing oil pipelines. But there is still the problem of acreage to gas ratio and this where the latest invention from James Liao or the University of California comes in.
Liao has developed a genetically modified E. coli bacteria that not only turns protein into isobutanol (a colorless flammable liquid used as solvent) but may also provide an alternative to biomass feedstock: fast-growing photosynthetic algae. "It would be possible," says Liao, "to create a recycling production system in which isobutanol-producing microbes are sustained by algal protein as well as industrial fermentation residues recovered from prior rounds of butanol production. Like algae, fermentation residues are composed largely of proteins." You can read the fine details here.
We maybe some years away from hitting Peak Oil and 36 years is a long time before fossil fuels it finally expire so in the meantime scientists are working on ways to keep society from grinding to a halt.