Rush

Oil is the problem, Cars are the solution

The last I checked, oil was at $96 a barrel and my Shell 98 was costing me 1.98 per litre. The stone age did not end for lack of stone and our oil age will end long before the world runs out of oil. The reason for this is quite simple, technology. And we are now at a technological milestone, or at least close to it. I think oil will peak at $120-130pbl and when that happens, it will be interesting to see whether the dam will break in favour of renewable fuels or in favour of carbon intense fuels made from tar sands, shale or coal. Both alternatives are the offspring of technological advancement.

I say 'peak' because after this price range, it will not be economically rational to use oil as a staple fuel. Having said that, I do not believe that we will run out of oil in my lifetime, although many oil pessimist claim otherwise. History has shown that such 'Malthusian' predictions are often wrong; the world did not run out of food, or any other resources and it is unlikely that it will run out of oil anytime soon. The flaw back then, as now, is that such forecasts are often just straight extrapolations that do not take into account any positive feedbacks. In the real world, scarcity and crisis breeds substitution and innovation. Development and human progression is dynamic, and straight line trends rarely go on forever in one direction. Technological advancement has helped to prolong the life of existing oil wells and the 1970s crisis has brought about North Sea Oil.

Technology has gotten us this far along in the oil age, the question is will it bring us into a new green age or into another carbon age. It is ironic that at this juncture, the power to buck the oil age and move on to a green age lies in the hands of large developing countries such as India and China, who are also big polluters. And they can do this through the use of the car. Car ownership has grown tremendously in China and India. Everyone wants to own a car, as a symbol of social progression and also as the suburbs develop and there is a greater need to commute. Having the requisite critical population mass bringing forth tremendous economies of scale, these countries can pioneer, develop and implement green cars that will result in a green standard platform; One standardized green fuel, one standardized green engine. And thanks to the lobbying of the oil majors in the developed world, the developing countries do not lack very far behind in terms of green technology R&D. Currently the world is torn between solar, geothermal, electricity and hydrogen fuel cells. If these developing countries were to adopt one single green fuel source as their working platform and sell one such car to every household back home, they would have outsold the number of non-green cars in the world. And there will always be a need or want to have more than one car per household. Imagine the potential market loss if the rest of the car manufacturing countries do not adopt this green platform. It is this free market trend albeit probably state initiated that will dictate the new age of man. The car of the future will determine how long a future our planet has.