Our economy was built on the assumption of ongoing cheap, fossil-fuel based energy. Oil accounts for about 43% of the world's total fuel consumption, and 95% of global energy used for transportation.
This model is now clearly broken.
Since the mid-1980s, oil companies have been finding & producing less oil each year, despite significant advances in oil exploration & production technology. This effect is called "peak oil." The EIA has now endorsed this finding.
Source: peakoil.ie
Of the 65 largest oil producing countries in the world, up to 54 have passed their peak of production and are now in decline, including the USA (declining since 1971) and the North Sea (declining since 2001).
Notable scientists & economists have produced many independent studies, starting with Dr. Hubbert in 1956 and more recently, Colin Campbell and the Association for the Study of Peak Oil and Gas (ASPO). The EIA has now signed on.
Source: peakoil.ie Gboe = Billions of barrels of oil equivalents
ASPO's model suggests that production is expected to peak around 2010. Other researchers predict earlier peaks including Kenneth Deffeyes and A. M. Samsam Bakhtiari, UK Petroleum Review editor Chris Skrebowski's Oilfields Megaproject, and energy banker Matthew Simmons' analysis of Saudi Arabian oil fields. Precise predictions are difficult as state secrecy shrouds much real oil and gas data.
A Dept. of Energy risk mitigation study on Peak Oil was released in 2006 titled “Peaking of World Oil Production: Impacts, Mitigation and Risk Management”. It is known commonly as the Hirsch Report after its primary author Robert L. Hirsch. Hirsch assumes the U.S. must double its vehicular fuel efficiency in 8 years.