Daniel Yergin’s typically sunny outlook on oil in his recent Wall Street Journal piece, “There Will Be Oil,” suggested that technology and new energy discoveries would avert any of the economic disasters portended by peak oil. We found Mr. Yergin’s dismissal of these risks premature and repetitive. After all, he has asserted since 2004 that global oil production was nothing to worry about, and that there would be few effects on the economy.

We counter that managers who would see their businesses survive the next few decades of extreme economic volatility will need to develop some literacy about oil and its complex relationships with the economy. They would be wise to consider the long list of peak oil analyses by the world’s militaries, and they would take heed of the sobering outlook offered by veteran analyst Robert Hirsch for the Department of Energy. And we must correct some of Mr. Yergin’s assertions.

Conventional crude ended its 150-year-long growth trajectory in 2004 and flattened out around 74 million barrels per day. Crude supply did not budge when oil prices tripled from 2004 to 2008, but global demand remained firm, shrugging off a recessionary dip in 2009. All the growth in supply since then was not crude but unconventional liquids, including natural gas liquids, biofuels, refinery gains, synthetic oil from tar sands, and other marginal resources. These liquids are by no means equivalent to crude. Yergin’s calming charts include these unconventional liquids and hide the fundamental issue of the depletion of mature fields. They also hide the declining energy density, higher cost, and lower flow rates of these new resources.

As Shell, Chevron, Total, the IEA, and a host of other serious observers have openly declared since 2005, the age of cheap and easy oil has ended. The “oil” that’s left is progressively expensive, difficult, risky, marginal, and fraught with secondary effects like increasing carbon emissions, demand for water, and competition with food.

A wide spectrum of agnostic analysts with decades of distinguished service in the oil industry and its press have addressed this. We like the formulation of petroleum economist Chris Skrebowski, which defines peak oil as the point where “the cost of incremental supply exceeds the price economies can pay without destroying growth at a given point in time.”

The connection between oil shocks and recessions has been understood for decades. We have ample historical evidence that when petroleum expenditures reach 5% of GDP, recession typically follows. Annual energy expenditures rose from 6.2% of U.S. GDP in 2002 to a painful 9.8% in 2008, which was immediately followed by an economic crash. And now oil is sending energy expenditures back above 9% of GDP, just as we see fresh indications that the recession persists. This is not a coincidence.

It’s difficult to tease the oil price signal out of the concurrent financial crisis and opportunistic speculation, but it would be a grave error to think it had no effect on the economy. Indeed, we believe it was, and remains, the most important fundamental of our present recession. On the plateau of oil supply, prices are trapped on a narrow ledge. Economic growth requires more oil, which requires high oil prices, which in turn undermine economic growth. And that ledge is getting narrower. We know that the economy fell on its face at $147 per barrel in 2008, and brought growth to a halt in 2011 at $120. The new pain tolerance limit appears to be $90 in the U.S., but $100-110 in China. At the same time, it costs $80-90 to bring a new barrel of supply online from marginal resources such as deepwater, tar sands, and the Arctic.

Yergin wants to have it both ways: He wants us to believe that the market will bear the high prices required to keep supply increasing against the backdrop of mature fields — which are declining by 5% per year — while at the same time asserting that prices will remain low enough to engender continued economic growth. This, we submit, is impossible.

Peak oil poses a host of systemic risks to the global economy, and will increasingly disrupt supply chains in our globalized world. Contra to Yergin’s view that Ricardian Comparative Advantage will produce abundant oil for export, oil-producing nations will continue to feed their domestic populations, leaving less for sale on world markets. OECD consumers will be increasingly priced out of oil markets as their disposable income adjusts downward to reflect energy costs.