What happened to peak oil?

Alexis Madrigal at The Atlantic asks why are gas prices falling?

The price Americans pay for fuel at the pump has fallen to its lowest in more than then two years. At $3.19 per gallon, you can fill up a 12-gallon tank for less than $40. 

So, what’s going on? And will prices keep going down?

None of the long or short-term factors affecting the price of gasoline seem likely to move quickly. Certainly none that would push the price down rapidly. The safest bet is that gas prices will remain in their new range, somewhere above $3 a gallon but under $4. 

The Energy Information Administration predicts an even tighter range over the next year. “The projected U.S. annual average regular gasoline retail price falls from $3.63 per gallon in 2012 to an average of $3.50 per gallon in 2013 and $3.39 per gallon in 2014,” the EIA forecasts.

But wasn’t peak oil meant to send gas prices ever-rising?

During the big run up in oil and gas prices that you can see in the charts above, some analysts contended that we were up against a geophysical limit on how much oil could be produced. It wasn’t that we were running out of oil, but that we wouldn’t be able to produce more, even if demand went up.

So far, however, that has not proven to be the case, as this International Energy Agency chart shows. 

A funny sort of peak – that keeps growing.