I will admit that I've always found the "Peak Oil" debate to be a little bit confusing, especially because both the words "peak" and "oil" turn out to have some ambiguity to them. But recently a couple of my favorite bloggers were debating the implications of the "unconventional oil" boom for the debate, with Karl Smith proclaiming peak oil dead while Noah Smith says it lives on. My approach would be to try to skip past some of these definitional issues and look at prices.
Above you see the nominal prices for Brent Crude Oil and West Texas Intermediate. As you can see, historically the prices are identical because oil is a globally traded commodity. You can also see that in the late 1980s and throughout the 1990s the price was low—around 20 dollars a barrel. These were the happy days in which the oil crises of the 1970s had been put behind us, and everyone got to hail the economic genius of Ronald Reagan and Bill Clinton. You can also see the supply disruption induced by Iraq's invasion of Kuwait and the subsequent geopolitical crisis that left George H.W. Bush without the reputation for economic mastery that Reagan and Clinton enjoy. Then you see a rise, then a fall, then a steady rise. Eventually the rise gets really crazy and people are in freak-out mode. Then comes a global recession and a huge collapse in prices. At this point we look around the wreckage and wonder wtf just happened. Was there an amazing oil bubble comparable to Irish real estate? Or has the recession just pushed prices down artificially?
Now with some subsequent years of data we can see that despite the slow growth in developed countries prices have very certainly not returned to the halcyon days of the Reagan-Clinton years. We can see that the Iraq/Kuwait price spike actually looks like a bit of a joke. We can see the impact of the unconventional oil, which has created this anomalous gap between the WTI price and the Brent price. It's a big gap. This is nothing to sneer at. Not only is it causing an economic boom in North Dakota and select portions of Texas, but it plausibly explains some of why America's overall economic performance has been so much better than Europe's. But even so, America's oil boom hasn't pushed U.S. oil prices back down to mid-aughts levels and it certainly hasn't pushed U.S. oil prices back down to 1990s levels. The good old days of genuinely abundant liquid fuel really do appear to be behind us.