Peak oil is the point in time when the maximum rate of global petroleum production is reached, after which the rate of production enters terminal decline. If global consumption is not mitigated before the peak, a world energy crisis may develop because the availability of conventional oil will drop and prices will rise, perhaps dramatically. M. King Hubbert first used the theory in 1956 to accurately predict that United States oil production would peak between 1965 and 1970. His logistic model, now called Hubbert peak theory, has since been used to predict the peak petroleum production of many other countries, and has also proved useful in other limited-resource production-domains. According to the Hubbert model, the production rate of a limited resource will follow a roughly symmetrical bell-shaped curve based on the limits of exploitability and market pressures.
The world's oil supply is fixed because it is no longer being naturally produced. Several hundred million years ago, plankton and bacteria thrived in the oceans of the then carbon dioxide rich atmosphere. Also at that time, volcanic sulfur lined the ocean floor, preventing living creatures from inhabiting, and therefore consuming, the plankton and bacteria after their death. Those plankton and bacteria that settled in porous sandstone or limestone and those plankton and bacteria that were then capped by shale or salt were allowed to heat and become pressurized to form oil.
Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, believe the high dependence of most modern industrial transport, agricultural and industrial systems on the relative low cost and high availability of oil will cause the post-peak production decline and possible severe increases in the price of oil to have negative implications for the global economy. Although predictions as to what exactly these negative effects will be vary greatly, "a growing number of oil-industry chieftains are endorsing an idea long deemed fringe: The world is approaching a practical limit to the number of barrels of crude oil that can be pumped every day."
There are some excellent sources, explaining what peak oil is. Some people paint a Doomsday scenario about Peak Oil. While it may be true, that the planet is addicted to endless supply of cheap energy for survival and growth, human ingenuity & innovation cannot be under-estimated.
Some believe that Peak Oil is nothing but a myth. Chief among those opposing Peak Oil theory are Pastor Lindsay Williams, Alex Jones and some other commentators. These people believe that governments, in collusion with large organizations, are using oil as a weapon to control people, by artificially reducing output of oil, in an attempt to control the world and form a One World Government.
Here is a list of some interesting blogs and sites in support of Peak Oil Theory...
http://oilbeseeingyou.blogspot.com/
http://www.lifeaftertheoilcrash.net/
http://peakoil.blogspot.com/
http://www.oilcrash.com/
Some sites against Peak Oil Theory
http://peakoildebunked.blogspot.com/
http://www.informationpile.com/peak-oil-shock/
http://www.prisonplanet.com/archives/peak_oil/index.htm