If you were looking for a quick, 4-paragraph introduction on the subject of Peak Oil, Bloomberg News has you covered:

Exxon Mobil Corp., BP Plc and Total SA are investing in assets that previously weren’t worth their time or money after oil-rich nations reduced access to reserves and exploration drilling faltered.

Efforts to find new sources of crude and natural gas are failing more often, with San Ramon, California-based Chevron Corp.’s exploration failure rate jumping to 35 percent last year from 10 percent in 2008. Countries such as Venezuela are making it more expensive for companies to develop their resources, if they’re allowed in at all. And previously developed fields are drying up, reducing oil companies’ future supplies, or reserves.

“Their No. 1 problem is reserves replacement,” said Nansen Saleri, chief executive officer at Quantum Reservoir Impact in Houston and former reservoir-management chief at Saudi Arabia’s state oil company. “That’s the elephant in the room, so that’s what they have to address.”

To compensate, major producers are investing in projects they once eschewed, including geologically complex oil and gas fields, called “unconventional” by the industry to distinguish them from the easy-to-get oil and gas of earlier years.

And that  is Peak Oil in a nutshell.  It is real, it is here.  All the cheap, easily accessible oil has been used up; the low-hanging fruit is gone.  The remainder of the planet’s oil, of which we still have plenty, is going to cost a great deal more to extract and refine, leading to higher prices at the pump, at the grocery store, or anywhere else that requires oil to function.

Nor was Chevron the only company with an exploding failure rate:

Houston-based ConocoPhillips forecast that its output will drop 2.7 percent this year as Chief Executive Officer Jim Mulva seeks to sell $10 billion in assets under his plan to “shrink to grow.” The company’s exploration failure rate rose to 43 percent last year from 32 percent in 2008.

This confirms the ongoing production decreases which are noted in the recent report from the UK Industry Task Force on Peak Oil & Energy Security, helmed by Sir Richard Branson of Virgin fame.  The Task Force released two possible scenarios: a bumpy plateau in production, or a collapse.  Quoting from the collapse scenario:

There is now clear evidence that the large publicly quoted oil companies – the Megamajors and the Majors – are having increasing difficulty in expanding their oil production. Examining the quarterly and annual production of the 23 largest quoted companies reveals the difficulties the companies are already having expanding production despite the fact that they are free to go to many different countries and locations. The five Megamajors are all now experiencing declining oil production. Collectively their production peaked in 2004. Individually: Chevron peaked in 2002, Royal Dutch Shell in 2003, Total in 2004, BP in 2005 and ExxonMobil in 2006.

Of the 11 largest quoted companies (the Megamajors plus ConocoPhillips, Eni, Petrobras, Petrochina, Repsol-YPF and StatoilHydro) – all with production of over 1mn b/d – the collective peak output was in 2006 with only Petrobras and Petrochina still expanding output in 2007.  (p.12)

Given that we depend on oil for virtually every bit of our modern lives, the impact of steadily rising prices cannot easily be forecast. Clearly though, we should be doing much more planning and preparing than we are now.