For more than a century, it has been cheaper than coffee and as constant as ocean waves. Getting it is simple. You select the grade, insert the nozzle, squeeze the handle and gasoline comes out. A hundred years and the pump has never let us down. Gasoline is always available. There seems no end to it.

Until now.

On top of the other problems plaguing the world such as global warming and the current financial meltdown, there's a third pressing issue that threatens to bring the good life to an end. It's the fact that the world is fast running out of oil.

Given that crude oil fuels 36.4 per cent of the world's energy consumption, the seriousness of shortages cannot be underplayed. Our reliance on oil is almost total. It fuels 100 per cent of air and sea transport and most of our land transport. Without oil there is no petrochemical industry. Agriculture, manufacturing, building materials, the clothes we wear, the food we eat and the medicines we take depend on oil.

Some experts, like Normand Mousseau, a physics professor at Université de Montréal who has written a book on the end of oil, say the beginning of the end struck last summer.

"This is why the prices jumped to $147 a barrel," said Mousseau, author of At the End of Oil: All You Need to Know about the Energy Crisis. "As soon as the economy comes back, they will be right back up."

Others say the crisis will come in three to 10 years depending on our rate of consumption.

"I hate being an alarmist about it, but our entire lifestyle is dependent on cheap oil and there just isn't very much left in the ground," Andrew Miall, professor of geology at the University of Toronto, said in an interview.

Most petroleum geology experts contend that we have already discovered the world's giant fields and what's left over will not keep the age of oil alive much longer.

"It's safe to say we have pinpricked the Earth thoroughly enough that it is very unlikely we have missed any Middle Easts," Miall said. "There may be another North Sea or two, but nothing that is going to really change the energy scene."

Matt Simmons, chairman and CEO of Simmons and Company International, which is a private energy investment banker based in Texas, said he believes the world's oil reserves have already peaked and we are on the downward slide.

"I think basically we are now in the early days of a very serious pending scarcity of oil and natural gas," he said. "Because we don't know we are, we are not putting any clamps on demand."

Simmons has been studying world oil production and reserves for decades. His company helps finance exploration and production.

He predicted -- accurately as it turned out -- that the North Sea fields would peak between 1998 and 2000. Now he has turned his attention to Mexico, Kuwait and Saudi Arabia, warning that their fields also have hit the downward slide.

"All the major oil fields of the world have peaked and we are going to see soon some precipitous collapses," he said.

Because production flows still can keep pace with demand, the price has remained deceptively low, giving the erroneous impression there's still lots of oil out there. Even at its record high of $147 a barrel, crude oil was still only 22 cents a cup, which is a fraction of the cost of a regular coffee at Tim Hortons.

Simmons called the price of oil absurdly low: "Let's say you and five fat friends run out of gas and you see a guy coming down the street riding a donkey and pulling an old messy cart and you say, 'Hey pull over here. Can you take me and my five fat friends a couple of miles for 22 cents,' which is what that much gas will get you. And the guy's going to flip you the bird. 'Are you stupid?' "

Oil prices, Simmons said, have to skyrocket to have an impact on demand.

"If demand doesn't slow down, we will end up having shortages and we will basically run out of motor gasoline."

Our recent consumption rates are the most voracious in history. By the end of 2007, the world had consumed about 1.1 trillion barrels of oil. Half of this was consumed over the last 25 years alone. So far, we have consumed about 50 per cent of the total recoverable oil, according to the World Energy Council.

Simmons's pessimistic view is shared by oil companies like BP and Shell plus a number of international studies including the World Energy Council's 2007 Survey of Energy Resources. It concluded "the world is rapidly approaching the end of the First Half of the Age of Oil."

It went on to state: "The evidence suggests that the peak of world discovery was in the 1960s, meaning that the corresponding peak of production for 'conventional oil' (oil from oil wells as opposed to synthetic oil from tar sands, shale or coal) is approaching. The world started using more than it found in 1981 and that gap has widened since."

The study warns: "Given the central position of oil in the modern economy, the onset of decline threatens to be a time of great economic and geopolitical tension."

The study suggests production will peak around 2011 when the age of oil will begin its inevitable decline. The International Energy Agency claims peak oil is about 15 years away.

But as the IEA states in its 2007 report, "What matters, and matters greatly, is the vision of the long decline that comes into view on the other side of [the peak]."

Chris Skrebowski, a London-based member of the Energy Institute in Britain and consultant editor of the Petroleum Review, which is considered the oil industry bible, said he believes world oil reserves will peak "no later than 2012."

In other words, as of this writing there are 1,095 days to peak.

He paints a doomsday scenario of a world blithely unaware that in a few years its oil-based lifestyle will begin to end.

What is meant by peak? "Peak oil is when delivery flows can't meet the demand," Skrebowski said. Demand will outstrip production primarily because of a lack of sufficient reserves. Once that happens, we are on an unbroken downward slide.

For Skrebowski, signs of the approaching peak are clear. High oil prices as well as the enormous price fluctuations we're seeing are ultimately the result of emerging bidding wars over oil by oil-deficit countries.

So how much oil is left in the world and how long will it last? The math is simple.

It is generally accepted by energy experts that world crude oil reserves number about 1.2 trillion barrels. The level of certainty in this number is fixed at about 90 per cent.

Our annual consumption is about 30 billion barrels a year. So as long as we don't increase consumption, those reserves will last about 39 more years.

But how accurate are the reserve estimates?

Most experts don't believe the reserve figures published by the Gulf states, which control 62 per cent of world reserves. Experts note that despite years of production increases and no new significant discoveries, Iran, Kuwait, Iraq and Saudi Arabia have left their reserve estimates largely unchanged since the early 1980s. In some cases, they have even increased them without proof or independent auditing.

Consequently, the experts say they believe that at least 25 per cent of world reserves are overstated.

"A lot of these figures that come from the Third World countries and the Mideast you really can't trust them at all because much of the hard data is rarely made public," Miall said.

What's more, exploration drilling has not yielded any new major fields. New wells, which are small and increasingly difficult to find, yield only one barrel for every three we consume, which means that we are using three barrels to every new barrel we find.

Conventional oil discoveries -- the kind we find in wells at the end of a drill bit -- take at least seven years to bring on stream. So even if major new fields were discovered, which experts say is a remote possibility, they could not be brought into production fast enough to meet rising demand.

The most important discoveries have been in ultra-deep water, such as the recently discovered oil fields off the coast of Brazil. But cost estimates for extraction vary from $200 billion to $600 billion US. Whether it is even possible to extract it is questionable. Should drilling prove successful, it will take about a decade to bring on stream. Preliminary estimates indicate the wells contain 15 to 30 billion barrels of high quality oil. That will keep us going only for another year. These reserve estimates, however, are not based on solid evidence since no one has flow-tested these wells, Simmons said.

The high Arctic is said to contain about 90 billion barrels. There is, however, no proof of this. Miall, who has surveyed the Arctic, said decades of drilling has yielded little more than moderate amounts of natural gas.

Hope that unconventional oil, most of which is in Canada's oilsands, will fill the void left by declining conventional stocks remains empty.

Measuring future oil production is not just a question of reserves. It's also a question of flow: how much oil can we produce and get to market in time to meet demand.

Converting oilsands bitumen into synthetic crude oil and getting it to market in sizeable enough quantities to make up for losses in conventional oil production so far has proven too tough a challenge.

Skrebowski notes that even though tar sand reserves are equal to the total reserves of non-OPEC countries, the oilsands constitute barely two per cent of the non-OPEC flow rate. "Non-OPEC reserves flow at nearly 50 million barrels a day," he said. "Canadian tar sands after 30 years of reasonably heavy investment is 1.4 to 1.7 million. And that's the problem. There is a huge volume of stuff within the Canadian tar sands. No one doubts it. But we have so far found it impossible to really flow that at any significant rate without totally destroying the environment, although you are doing quite a good job of that already."

Demand for oil is expected to continue to rise in China, India and other Asia countries. This will only hasten the moment of peak oil. In most of the oil producing countries, production has already peaked. New important discoveries are doubtful.

Canada's conventional oil production peaked in about 1995. U.S. production peaked in the 1970s. North Sea wells peaked in 2000. Mexico peaked in 1997 and Venezuelan production is peaking.

In all, Skrebowski said, about 28 significant producers are in decline. This represents about 35 per cent of global production. Once that figure reaches 51 per cent, "we reach global peak oil," he said.

The only place where production continues to hold up is in the Persian Gulf. But the elephant wells of Saudi Arabia are showing signs of exhaustion.

The idea that the world will run out of oil in this century was first posited in the 1940s by U.S. geologist M. King Hubbert, who created a mathematical formula for calculating reserves versus demand. Initially, he was considered a nut as oil companies insisted that the world was awash in oil. His predictions, however, have come true and no longer do geologists and oil executives blithely dismiss the notion that the age of oil is drawing to a close. Yet politicians have not addressed the issue.

"They are terrified of it," Skrebowski said. "They don't know what to do. There are no pat solutions. The way the world grabbed onto biofuels and then proved that it wasn't a very good idea seems to be an attempt to find an easy way out of the box. If you think about it, since the Second World War, the politics of the western world has been about divvying up the sweeties. Now you have to get up on your hind legs and say, 'Well, we have to start taking the sweeties away. Maybe you can have some sweeties later but you can't have any sweeties now.' That's hardly a recipe for getting yourself elected."

Unless we address the issue now, he said, oil shortages will be ruinous for the economy.

Skrebowski warns: "One of the reasons peak oil could really get out of hand is if a lot of the existing producers suddenly decide that the best return is leaving this oil in the ground, saving it for later generations. Then you could get a sudden dramatic shortfall in supply. It is a perfectly reasonable thing for any nation state to say, 'Of course these are our resources. Surely we should be using them for the benefit of our people.' "

Consider this: Eighty per cent of the world's oil is controlled by governments through their national companies. Most of those countries are run by gangster democracies, oligarchies and highly unstable regimes. Should any one of these countries reduce flow, the impact on the world economies could be catastrophic. That's how tight the situation is.

Imagine Canada cutting off or reducing oil and gas exports to the U.S. The result would be catastrophic for not only the U.S. economy but the world economy and could lead to war.

Skrebowski says: "One thought I would impart ... is that this is a valuable and ultimately scarce resource and therefore there is always an obligation that whenever we use it, we use it as efficiently as possible for the maximum benefit. It's almost a moral imperative, like not wasting food when food is scarce."

VOLUME OF RESERVES OFTEN OVERSTATED

Calculating oil reserves is not an exact science and too often reality disappoints.

It depends not only on the nature of the well but also on the management of its production over time.

Geologists say there are five elements required for a successful oil well: sedimentary reservoir rock, a mature organic source (oil), migration of oil into reservoirs, and a trap and a seal to keep the oil in place.

If all five elements come together, you've got a producing oil well.

Then the question becomes: How much oil is in the reservoir and how much can be extracted?

These figures can change up or down with time.

An oil well is like a giant rigid sponge of porous rock under tremendous pressure.

When the rock is drilled, the pressure is released, pushing the oil up through the bore hole and to the surface.

The trick is to keep the pressure and the flow constant. A good reservoir has pore spaces that are all interconnected.

Seismic photographs, core samples and outcroppings (sedimentary rock that rises above the surface) help define the character of the well.

Primarily, however, geologists rely on history and flow tests to tell them how productive a well might be. It can be a crapshoot that can easily overestimate reserves.

They use the production figures from old wells that display similar geology to help calculate potential oil production of a new well.

"After a few years they will assemble the production data from the wells and see how that data actually matches the predictions and that's called history matching, how the history of the field actually matches what was predicted," said Andrew Miall, a petroleum geology professor at the University of Toronto.

"And it is almost never good. And this is because there are so many uncertainties down there that the actual act of production will lead to anomalies and areas of low porosity that were not predicted."

Furthermore, not all oil is created equal -- a fact that also skewers the reserve figures.

Matt Simmons, chairman and CEO of the private oil investment banker Simmons and Company International in Texas, points out that total world reserve figures rate every barrel of oil in the ground as having the same quality and quantity of usable oil.

In fact, most of the oil reserves are not top quality and therefore will yield less usable oil per barrel.

Then there are what the World Energy Council refers to as "political reserves." In the OPEC countries, the greater the reserves they claim, the more oil they are allowed to produce, according to their quota system.

"There is some evidence to suggest that some of these countries started reporting 'original' not 'remaining reserves' during the 1980s at a time of weak oil price, while others simply aimed to match or outshine the reports of their neighbours," the WEC reported in 2007.