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It has long been known by geologists that the world's oil supply is finite. Oil is not a renewable resource and it is found in relatively limited geological environments around the world. This is the subject of Beyond Oil, The View from Hubbert's Peak, by Kenneth S. Deffeyes, Professor Emeritus at Princeton University published in 2005, (202 pages, hardcover, Hill & Wang).

In general oil is found in a zone called the oil horizon located between 7,500 feet and 15,000 feet below the surface in organic rich sedimentary formations. Deeper than that, the temperature of the rock is too hot for oil molecules to stay together, and above that the hydrocarbons are not heated enough to separate into crude oil. Sandstone, dolomite and limestone form virtually all the host rock for oil production in the world and comprise only about 1% of the world's rock formations. In addition, specific geologic structures are required to trap the oil. According to Professor Deffeyes, seven specific criteria are required for oil to be present in a particular location. Without any one of these criteria, oil is not present, period.

While Saudi Arabia has the largest annual production of oil, the United States and Russia are second and third place according to Deffeyes. Saudi Arabia has 1,560 producing wells, Russia 41,192 wells and the United States has 521,070. The United States is one of the most drilled and explored places in the world.

Between 1901 and 2005, oil use and production consistently increased, first in the United States and then in the world. In 1956, M. King Hubbert, American geologist and geophysicist, predicted the United States oil production would peak and then start to decline by the early 1970s. When his predictions came true, Hubbert became an instant folk hero among energy conservationists. This became known as Peak Oil or the point when annual production of oil reaches a maximum and then starts to decline. It can be diagrammed as a bell shaped curve with a peak at the top.