Experts differ strongly: how long will the world's oil supplies last? Have we reached peak-production or is it another two decades away? Although we feel there is strong evidence that we are indeed very near peak-production, there is a more important question to ask. The real question is not 'Will we run out of oil?'. The real question is 'Will oil remain affordable?'. It will not.

Oil prices are influenced by many more factors than just supply. Equally important are the parties that control these supplies: governments, cartels, dictators, oil-companies etc. And then there are forces that are even beyond their control: wars, political instability, natural disasters and even shortages in oil tanker capacity.

During 2004 we saw such a combination of 'incidents': war in Irak (obstructing oil production), three hurricanes in the Gulf of Mexico in one month (seriously damaging drilling platforms), bankruptcy for one of Russia's largest oil companies Yukos (causing uncertainty in the market), Shell announcing it had overstated its oil reserves for years by almost 20% (raising more questions about the world oil supply) and finally an enormous increase in oil demand from China and India.

During 2004, the price of one barrel of oil rose more than 50%.
In just 10 months...

None of the factors mentioned above will cause a rise in the price of oil by itself. However, any combination of them can and will result in abrupt spikes or even sustained higher levels. Then, when supply eventually will no longer be able to keep up with demand, prices will never come down again.

Expensive oil then becomes unaffordable oil. First just for the poorer but as prices rise even further, oil will become unavailable to the majority. It is important to realize that almost all energy consumption is fed by oil and gas. Whether it's driving your car, heating your home or turning on a light, you are burning up fossil fuels. Imagine life without it.

Whether oil prices will jump next year or somewhere in the next two decades is irrelevant. The fact that it is inevitable, is fundamental.
In order for households and businesses to have predictable energy costs and maintain their standard of living, they will need to become less dependent on oil and natural gas. Electrical energy and heat will thus have to be produced from other than fossil fuels.

Hydrogen will slowly but shortly replace fossil fuels as energy source or carrier. Of course this also results in great environmental benefits as the renewable hydrogen economy can be CO2-free. Ironically however, hydrogen will first still be produced from fossil fuels as an intermediate solution. Then, renewable sources will start to produce hydrogen at a larger scale. The first step away from oil, the first step towards a truly sustainable energy system.

:: Food for thought

:: Relevant links
InfoPlease - Oil reserves
Oil Depletion Analysis Centre
Oil Market Report
The coming oil crisis

IEA Energy Information
Wikipedia CO2
CDIAC top 20 countries
Man's impact on the rise in CO2 concentration
CDIAC Trends data on global change

US EPA Global warming site
Global warming.org
Wikipedia Global Warming