The core concept of peak oil was that the rate at which crude oil is extracted from the ground at a global scale would reach a peak (commonly measured in terms of how many million barrels-worth per day), after which point it would begin to decline and continue to fall (not just with a short-term disruption, but as a long-term trend).

The concept seemed sound at the time, even around 12 to 15 years ago when it was still getting lots of media attention. However, it hasn't come to pass (yet) because the concept had some flawed assumptions.

One of those assumptions was the potential for a profit margin per barrel of crude would remain fairly low, possibly because they believed consumers just wouldn't pay whatever price they were charged, but boy have we proven them wrong about that.

Another assumption was that the ability to extract some of the more difficult sources of crude wouldn't really improve much, at least not in terms of their cost.

Some oil fields are under deep oceans, or extremely deep underground, some are in shale fields, some are under ice or permafrost or just a long way from anywhere (as is the case for Russia's), and they can exist in the form of oil sands, tar sands or bitumen sands (as they do in Canada).

Extracting, or processing, or transporting (or all three of) these is more difficult and therefore the investment in the infrastructure needed - whether that's pipelines, deep-sea wells, or the specialised methods for shale and for oil sands - is more expensive, requiring a long-term commitment to make that infrastructure worthwhile.

But as the demand for oil hasn't really been affected by the price of crude (not nearly as much as the peak oil concept anticipated), and the willingness to find and develop effective ways to make use of the so-called unconventional oil sources (which meant that the industry found and spent money on achieving that goal), the viability has remained and so production capacity increased.

As I mentioned in a previous story, at some point the renewable fuels must surely become viable (through market forces or through policy, or both), and in the case of Europe who currently lead the world in the production and use of biodiesel, they have been for some time.

Another factor propping up fossil fuels, of all types, are other government policies of various kinds. There are subsidies for refining oil for instance (as we have here), or in some countries those policies attempt to lower the price for consumers (although a consequence of that can be increased consumption, or at least no incentive to decrease consumption).

Brazil's government, who are majority shareholder of Petrobras, have been trying to force the company to keep the price of diesel at the pump low, but without helping them to pay for it. This has caused several issues because the directors are still responsible to the other shareholders on the New York stock exchange, and because not increasing the price may cause them to run out of diesel.

And so, Petrobras has been passing on that increased cost, prompting President Jair Bolsonaro to sack each new boss of Petrobras when they don't give him close enough to what he wants (and frankly they can't without an end to the war in Ukraine, or Bolsonaro learning what subsidies or biofuel are).

However, as Brazil's example highlights, it's worth remembering that the system of government we have (like theirs) is still popularist, and so unless Australia's new government misjudges the outcome of a policy, they won't want to implement something that increases the cost of living too much because that would very quickly make them unpopular (especially when the cost of living was a key federal election issue in 2022).

Meanwhile the UK, of all governments, have introduced a temporary 25 per cent levy (basically a windfall tax) on gas and oil companies to help pay for measures designed to alleviate the cost of living pressures on their citizens. However, those come with strong local investment incentives to let them avoid paying much of the levy, in an effort to increase job opportunities in the UK.