Williston, North Dakota, is a bleak little city in the vast American prairie. It's dusty in the summer and frigid in the winter. Elk hunting is one of the few sources of entertainment. But despite its drawbacks, Williston has seen its population more than double within a short period of time.
The city is so overcrowded that new arrivals often have no place to stay but in their motor homes, which, at monthly parking fees of $1,200 (€880), isn't exactly inexpensive. And more people continue to arrive in this nondescript little town.
The reason for the influx is simple: Geologists have discovered a layer of shale saturated with natural gas and oil deep beneath the city. The Bakken formation, spanning thousands of square kilometers, has become synonymous with an American economic miracle that the country hasn't experienced since the oil rush almost 100 years ago.
North Dakota now has virtual full employment, and the state budget showed an estimated surplus of $1.6 billion in 2012. Truck drivers in the state make $100,000 a year, while the strippers being brought in from Las Vegas rake in more than $1,000 a night. President Barack Obama calls the discovery of Bakken and similar shale gas formations in Texas, Colorado, Pennsylvania, Louisiana and Utah a "stroke of luck," saying: "We have a hundred years' worth of energy right beneath our feet."

The future of the American energy supply was looking grim until recently. With its own resources waning, the United States was dependent on Arab oil sheiks and erratic dictators. Rising energy costs were hitting a vital nerve in the country's industrial sector.

But the situation has fundamentally changed since American drilling experts began using a method called "fracking," with which oil and gas molecules can be extracted from dense shale rock formations. The International Energy Agency (IEA) estimates that the United States will replace Russia as the world's largest producer of natural gas in only two years. The Americans could also become the world's top petroleum producers by 2017.

Peak oil, an event based on M. King Hubbert's theory, is the point in time when the maximum rate of extraction of petroleum is reached, after which the rate of production is expected to enter terminal decline.[1] Peak oil theory is based on the observed rise, peak, (sometimes rapid) fall, and depletion of aggregate production rate in oil fields over time. Mostly due to the development of new production techniques and the exploitation of unconventional supplies, Hubbert's original predictions for world production proved premature.[2] Peak oil is often confused with oil depletion; peak oil is the point of maximum production, while depletion refers to a period of falling reserves and supply.
Some observers, such as petroleum industry experts Kenneth S. Deffeyes and Matthew Simmons, predict negative global economy implications following a post-peak production decline and oil price increase because of the high dependence of most modern industrial transport, agricultural, and industrial systems on the low cost and high availability of oil. Predictions vary greatly as to what exactly these negative effects would be.
Optimistic[2] estimations of peak production forecast the global decline will begin after 2020, and assume major investments in alternatives will occur before a crisis, without requiring major changes in the lifestyle of heavily oil-consuming nations. These models show the price of oil at first escalating and then retreating as other types of fuel and energy sources are used.[3] Pessimistic predictions of future oil production made after 2007 stated either that the peak had already occurred,[4][5][6][7] that oil production was on the cusp of the peak, or that it would occur shortly

Crowie said:
It seems to me that the current collapse in oil prices is just a blip which will soon right itself.

Yes, it is expected that the price will start rising near the end of
this year. It will be caused by the fall in the number of new fracked tight oil wells.
The first thing to note is that it will never run out !
Eventually it will be too expensive to burn in a car so you can go
to the shop to buy a couple of litres of milk. You WILL walk.

The important point to note on the fracked tight oil wells is they are
a temporary extra supply that should have enabled us to adapt to the
new energy situation.
Unfortunately our politicians refused to believe that the peaking
of conventional oil in 2005 was anything more significant than a
statistical blip.

579:
It is the rising cost of tight oil wells that will limit production.
The cost is rising because the first wells were in the best locations.
As the wells only last about three years with decline rates around
40 to 60 % a year, the next wells are drilled in adjacent areas but
gradually they have had to move into less productive areas.
They improved the economics a bit by use of multi well pads but it is
only a temporary help.
Permanent decline is certain around 2020, but the other limitation is
the poor profitability of the tight frackted wells and the drying up
of finance.
There is a lot of information on the economic problems of tight shale oil.