Peak oil theory, or "Hubbert's Peak," is named after American geophysicist Marion King Hubbert, who created the model. Hubbert argued that as production reaches its zenith, it will begin an unstoppable decline. In 1956, Hubbert predicted that U.S. oil production would peak in 1965-1970. U.S. oil production peaked in 1971. At the time of his mid-century research, Hubbert also predicted that global oil production would peak about a half century later.

At the conference Pickens also reiterated his prediction that oil would rise to $100 per barrel, hitting $100 before falling (temporarily) to $80.

However, despite oil bulls' interpretation of Pickens' bold prediction as a data point supporting their argument that even higher prices are ahead, peak oil theory is not universally accepted. The theory has many critics. Some argue that it is impossible to identify when oil production has peaked. Others say the peak date is many decades (or even longer) away. Still others argue that a more-liberal definition of oil reserves would yield a substantially larger proven oil reserve base.

Analysis: All due respect to Mr. Pickens, with the peak oil issue by no means resolved, focus on oil demand, not supply. Demand is driving today's elevated oil price. If demand moderates or declines, so should the price of oil; if not, oil's march higher continues. Given oil's vital commodity status -- currently there is no readily-available, mass-energy substitute for the industrialized world -- oil's price, and by precondition oil demand, will play a large role in the industrialized world's GDP growth levels in the years ahead.