"The bad news is that by underestimating proven oil reserves we have been lulled into a false sense of security in terms of environmental issues, because it suggests we will have to find alternatives to fossil fuels in a few decades," said Dr Pike. "We should not be surprised if oil dominates well into the twenty-second century. It highlights a major error in energy and environmental planning – we are dramatically underestimating the challenge facing us," he said.

Jeremy Leggett, author of Half Gone, a book on peak oil, is not convinced that Dr Pike is right. "The flow rates from the existing projects are the key. Capacity coming on stream falls fast beyond 2011," Dr Leggett said. "On top of that, if the big old fields begin collapsing, the descent in supply will hit the world very hard."

I guess we'll find out. At $250 a barrel with world demand collapsing, they will either be scrambling over themselves to sell at that price, and bring enough supply online to revive demand.

If they don't, that'll paint a pretty clear picture for me. Good or bad, I don't think we'll have to wait too long to find out. OPEC is producing at record levels, and the system is creaking.