The End of Cheap Oil
The ever increasing demand for energy has pushed the cost of oil, and therefore gasoline, to the highest they have ever been. This is primarily because the booming economies of third world countries, such as China and India, have pushed the demand for oil to the highest ever too. Domestically in the United States, Americans are also using more oil despite the skyrocketing prices of gasoline.
Keep in mind that there is a limited amount of oil throughout the world, and it is not a renewable. Also the amount of oil that can be pumped out of the ground and refined is limited. Unfortunately, the demand for oil is not predicted to go down in the near or even distant future. Therefore, the price of oil is going to remain high.
The world’s current oil wells are predicted to run dry within a few decades at the current increasing rate of utilization. Fortunately, there are several untapped oil fields throughout the world, so mankind is probably not going to run out of oil in our lifetimes. For instance, in Alaska there are several large sources of oil in protected wildlife preserves, off the coast of Florida there are several underwater oil supplies, Russia has claimed ownership of the oil in the Artic Circle, international agreements have sectioned off all the resources in Antarctica, and oil companies are desperately searching for even more sources of oil. However even though there are several untapped oil fields throughout the world, they are limited and not replaceable once mankind has depleted them. And since new sources of oil are not going to be flooding the market soon, the cost of oil will still remain high and probably become much more expensive.
Conversely, the costs of alternative sources of energy are going down. For instance, the cost of wind power is lower than the cost of oil for the first time. Scientist throughout the world are scrabbling to make cheaper and more efficient solar panels, wind turbines, and other exotic sources of power.
However, the oil cartel, called OPEC, is keeping a very close eye on the costs of these alternative sources of energy. Because of greed, OPEC tries to regulate the supply of oil to ensure the highest price of oil while also limiting interest in developing alternative sources of energy. This is a delicate balance, since the costs of other sources of energy are much more chaotic than oil and especially since OPEC does not regulate the large oil reserves of the United States of America or Russia.
In most countries of the world, cartels are illegal, since they use their monopolies to fix the prices of their goods. In other words, cartels artificial control supply and demand of any product to maximum their profits with no regard to actual supply and demand of a free market. Yet OPEC only has a semi-monopoly on the supply, and therefore the price, of oil. However, this is enough of a reason why other countries need to stop being dependent on expensive oil and develop other sources of energy. Preferably, countries should invest only in pollution free power sources.
Therefore, the cost of oil will remain forever high, unless other sources of energy have a sudden price drop so that they are significantly cheaper than oil. Only at that point in time would OPEC flood the world with a large supply of cheap oil in an attempt to bankrupt any competition.
by Phil for Humanity