Peak Oil refers to the Hubbert peak theory which holds that for any given geographical area--from an individual oil field to the planet as a whole--the rate of petroleum production tends to follow a bell-shaped curve. Peak Oil means that world production of oil will increase up to the point where it will reach an all-time maximum when production reaches the top of the bell curve, and then it will decline rapidly over a long period of time. In other words, even when there are large reserves of oil remaining it will not be possible to increase the rate of production. Severe shortages are therefore inevitable in the face of increasing demand, from the moment the peak is reached.
The timing of the Peak Oil phenomenon is uncertain, by its very nature, but expert opinion indicates that it will occur within the next ten to fifteen years, and perhaps much sooner. Some think it is imminent. Not the least dangerous aspect of the phenomenon might be its suddenness. There is no reason to believe that the scarcity will grow gradually, giving enough time for adjustment. It is perhaps more likely that it will arrive suddenly.
The most basic rule in economics is supply and demand. High demand and low supply must lead to higher prices. At the start of the 21st century oil prices fluctuated between $20 and $30 a barrel. In 2005 oil prices hit $70 a barrel before stabilising between $60 and $70. The price can fluctuate wildly in the short term depending on the weather in the northern hemisphere, regional conflicts, etc. The market is so sensitive that attacks by bandits/terrorists on a Nigerian oil platform are enough to send ripples through the world oil market.
The role of increasing demand deserves close consideration. The burgeoning economies of India and China , alongside many other developing countries, will demand more oil in the coming years. Even leaving aside the possibility of major incidents such as military action against Iran or other upheavals in the Middle East, it is inevitable that the supply of oil will become increasingly inadequate relative to demand within the next ten to fifteen years, if not sooner.
Much the same may be said of natural gas. The occurrence of Peak Gas is thought to be some decades into the future. However, the decreasing supply of oil, and the increasing demand for energy, is likely to lead to much greater usage of gas and to hasten the depletion of reserves within the lifetimes today's children.
In order to achieve energy security at a reasonable cost, it is essential that nuclear power be adopted, and soon.
There is at least one crucial economic aspect that gets little mention in the media; our dependence on oil for vital resources other than energy products. Oil is processed into thousands of essential products such as plastics, fertilisers, pesticides and many thousands of chemicals. According to the UK group Waste Online the annual global production of plastic is around 100 million tonnes per year. When combined with the energy required to extract and process the oil to make raw plastic pellets this is equivalent to about 200 million tonnes of oil; or about 4% of the world's annual oil production. Agriculture is dependent on oil and gas not merely for automotive power for tractors, combine harvesters, etc, but also for pesticides and fertilisers, to dry the crops...
It makes sense that oil and gas reserves should be conserved for such essential uses as recyclable plastic production instead of merely being burnt to produce heat, while nuclear technology is available to take over the burden of electricity generation and heat production.

Links:
www.peakoil.com
www.hubbertpeak.com
www.peakoil.net
www.theoildrum.com
www.lifeaftertheoil crash.net
http://en.wikipedia.org/wiki/Hubbert_peak_theory

Source : BENE 2007 - adapted by EFN - Environmentalists For Nuclear - www.ecolo.org