Economic crisis may trigger another energy revolution

The era of oil is drawing to its end. Vasily Koltashev, the director of the Center for Economic Research of the Globalization and Social Movement Institute, said that the world was about to experience the energy revolution when a new method to generate energy was going to be discovered to replace hydrocarbons. A similar revolution already occurred in the 20th century, when the world turned down steam engines. The current global economic crisis may eventually result in the rejection of the priority usage of oil, the expert said.

Oil prices reached their maximum level on July 11 when a barrel of black gold cost 147.27 dollars. It was a highly profitable time for oil exporting countries. They believed that the fuel would continue to rise in its prices and hoped that oil would eventually cost $200 per barrel by the end of the year. Russia’s finance ministry officials were certain that the prices on hydrocarbons would go down only in 2011-2012. It was a widely spread point of view and it seemed that it had no alternative.

However, oil started to cheapen very quickly in the summer of the current year. It dropped below $115 by August and fluctuated near $60 per barrel in October. Optimism of oil exporting countries was replaced with serious concerns. Oil began to decline both with stock indexes of the world and the consumer demand.

The world had faith in oil on the threshold of the global crisis. It seemed at the end of 2007 that the global demand in hydrocarbons would never stop. Oil made mankind forget about the power of coal and steam engines. Everyone forgot how the economic crisis of 1899-1904 destroyed the steam future of the world. The share of oil in the general consumption of energy resources was growing during the 20th century, although it made up only three percent in 1900. The index grew up to 41.5 percent in 1972 and to 65 percent in 2000. Analysts say that the consumption of oil would increase to 84 percent in the world by 2030.

The cost of oil was gradually climbing up together with the growth of consumption. The war in Iraq in 2003 pushed the prices up to $30 per barrel. The level of $40 per barrel was left behind in 2004 and $100 in 2008.

The United States and the European Union began to invest billions of dollars in the development of a biological replacement to petrol and diesel fuel. However, all those bio-fuel projects were maintained on huge subsidies and expensive oil. As soon as the prices on hydrocarbons began to decline, the illusions connected with bio-fuels began to disappear. Europe was the first to refuse from the intention to increase the consumption of the consumed bio-fuel. However, crude reserves do not last forever.

Vasily Koltashev believes that there is nothing impossible in a new energy revolution. Mankind successfully extricated from the crisis of 1899-1904, when the revolution became possible owing to electric power, petrol and diesel-powered engines. It is not clear yet, what kind of energy revolution exactly the current crisis may trigger. The expert does not exclude an opportunity for nuclear power at this point. It is not ruled out that scientists will find a way out with the help of atmospheric electricity. “A miracle will happen before our very eyes,” the expert believes.

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Author`s name Dmitry Sudakov