Alternatives to gasoline.
Automotive manufacturers, environmental activists, governmental organisations
and the consumer are all concerned, in their own way, about the future source
of the fuel we put in our vehicles.
The oil producing nations, both inside and outside OPEC, have become extremely
wealthy because of the fortunate circumstance of having vast amount of crude
oil on their territories. The companies who refine, transport and supply the
finished products to the end user have become global, super-rich money
machines. Governments have used the tax income from the consumer to finance a
large portion of their expenditure. The consumer has become accustomed to the
car and the convenience of owning one or maybe more. Industry has become
dependent, to a large extent, upon motor transport for distribution.
However several factors are now impinging on that happy circle of satisfied
suppliers and consumers and these factors are forcing some serious discussion
into the future direction of transport in general and into fuel for the
motorist in particular.
Supply and cost of Crude Oil.
The traditional oil producing areas such as the Middle East have had it pretty
easy with benign conditions for oil extraction. The same could also be said for
the early days of oil production in the USA. The reserves were enormous and the
conditions under which the wells were drilled and the production and delivery
were established relatively cheaply.
Surveyors and engineers found more huge reserves offshore, for instance in the
Gulf of Mexico and then in the North Sea. This made for a different and more
expensive engineering challenge. The cost of establishing and operating these
fields was that much greater. However as the price of crude oil has increased
it has made it economically viable to extract these more difficult, therefore
more expensive, reserves.
There is an interesting paradox represented by the fact that although we are
extracting oil at a greater and greater rate the actual reserves are actually
increasing as well. It should also be understood that not all of the so-called
reserves are actually recoverable at this point in time.
There are some vast reserves which would be very difficult to extract and as a
consequence very expensive. An example of this would be the oil shale and sands
of Canada. Whilst not denying the size of the reserves, the energy demands of
blasting, transport, crushing, heating etc, together with the safe disposal of
huge quantities of waste material, are large, not to say extremely expensive.
However this sort of expense could be justified by the enhanced price of crude
oil on the world market. In other words these reserves are not economically
recoverable at this time, but may become so if the price increases enough in
the future.
Demand for Oil and oil products.
The ultra-rapid growth of developing countries such as India and China places
huge pressures on the world supply of oil, as these economies suck in enormous
amounts of petroleum products. Their governments are seeking increased
prosperity for their populations. The Indian and Chinese companies are growing
very fast because of their low labour rates are exporting at an ever-increasing
rate to the developed world and they will continue to grow for the medium term
at least. These countries are looking to bring their standard of living up
towards those enjoyed by the USA and Europe and there is no way in which this
will be stopped. These vast countries and populations will be tomorrow's
consumers, and that means energy usage and transportation.
Environmental concerns.
The scientific thesis of global warming and climate change cannot be denied. Or
to be more specific - the evidence is becoming overwhelming such that the
theory cannot be denied. This will have a major impact on everybody's life and
governments and commercial entities are both, to a certain extent, preparing to
make some changes. In particular as regards the level of emissions from
automobiles.
Combination effect
When you add these three elements together you get a damning combination;
whereby oil is getting more expensive to extract and less available, growth of
demand among growing countries will mean the law of supply and demand will fuel
increased prices and finally the environmental concerns of car emissions will
require that we all look at alternatives to petroleum products to power our
cars.
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