posted from comments

pollux said...
I think people overreact to the impending shortage in oil. There is lots of oil to be found, e.g. in the tar sands of Canada, or the icy waters south of New Zealand for example. This oil is however more expensive to recover. The sole motive of big oil companies or any corporation for that matter, is to maximize profit. They will refrain from the huge capital expenditure usually required to explore and drill for expensive oil unless the price of the oil is high enough. So more oil will be found as and when required.

The easiest substitute for oil (not gasoline) is nuclear power. Countries like China and India are increasingly turning towards nuclear power. Notice the increase in the price of uranium over the last couple of years. Ofcourse there are safety issues, but they can be improved. If oil reaches $200 a barrel, nuclear power will seem a mighty good option.

I would like to know how much of the energy usage that is currently met oil based can be switched to nuclear power. One that cannot be done as of now is the gasoline requirement of automobile engines and hence I guess the NYT article.

As far as combustion engines go, the race to find substitute for gasoline is on. Ethanol seems like a good subsitute. But as the Motley Fool writes - "ever since President Bush mentioned ethanol in his 2005 State of the Union speech, corn prices have been on a meteoric rise. A 56-pound bushel of corn has risen 115% from $1.86 at the end of 2005 to $4 a bushel today. The president's call for a fourfold increase in the use of alternative fuels has the markets in a frenzy over prices, but it's more than just ethanol; pork and poultry producers are also fighting for corn to feed their livestock." So there you go, setting aside more corn for ethanol affects a lot of other prices. For example, if corn prices keep rising, why would a farmer want to grow wheat? Hence wheat prices will rise. So as oil prices rise and no alternative cheap engine fuels can be found, people will stop driving 30 miles for dinner, more cities will build mass transit systems, even city design and layout might change so as to make them more friendly to mass transit systems.

It is all about prices, how much you are willing to pay.