"History of Crude Oil" cited the MSNBC on-line report that oil trading was well above $70/barrel through summer 2009. The West Texas Intermediate (WTI) crude oil prices/barrel actually shows this number to be lower in the their summary below.
2007 - $72.32/barrel
2008 - $99.57/barrel, a 37.7% hike
2009 - $60.35/barrel
Incidentally, the 2010 price is expected to hover around $70.00, which would imply a climb of about 20 percent. Broken down, what this means for most of us is that we paid around $3.26/gallon at the pump in 2008, are paying around $2.36 now, and can expect to pay around $2.69 in 2010.
Oil Supply and Demand
What is troubling about all of this is that no matter what the cost, consumption has not fallen off in any meaningful or sustained way. According to the Energy Information Administration, total consumption of oil products is projected to decrease 650,000 bbl/d by the end of this year but will rise again 310,000 bbl/d in 2010 due to "anticipated modest economic recovery." While this may at first seem a net gain against fuel consumption by the numbers alone it also shows a continued dependence on supplies that are all too quickly disappearing.
In a 1997 article by USA Today, Craig B. Hatfield, a University of Toledo (Ohio) geologist, issued this warning: "In 2011, we will have consumed half of all the producible oil we have ever had if the oil consumption rate stops growing and holds constant at its current level. If the consumption rate continues to grow, as it does every year, we will reach the midpoint of production during the first decade of the coming century."
Oil and Politics, and Production
Of course geologists are notoriously gloomy when it comes to the future of oil supply, and it is often hard to tell what the real facts are. It does seem to be generally agreed upon, however, that the resource is most assuredly coming to an end; it is just that nobody knows exactly when that end will be. According to the journal Science in an article written by Dr. Leonardo Maugeri in 2004, "... although hydrocarbon resources are irrefutably finite, no one knows just how finite. Oil is... difficult to estimate... Substitution is simply a matter of cost and public needs, not of scarcity... [and has] invariably led to bad political decisions."
Lack of political foresight is a sentiment simultaneously echoed by relevant discourse on-line. Sites such as the one put up by the Cato Institute stress that oil companies alone do not set the price of crude. There are other quite larger variables that come into play like volatile geopolitical situations in oil-producing countries, the increased demand of fast-growing and industrializing nations like India and China, and the pervasive fear of traders that the supply will not remain stable for long (and by all accounts it will not, which is why we will never again see $1.50 at the pump).
The prescription for all of this is, as with so many things, education. In the 2005 Hirsch Report, funded by the Department of Energy, Robert Hirsch asserts a clear and irrevokable peaking of the world's oil production, consequences for continued dependency on the fossil fuel, and appropriate solutions for moving away from it, including large-scale research, development, and implementation of programs for alternative sources of energy.
Alternatives to Crude Oil?
According to a report written by Lee Dye and published by ABC News on-line, one of the present alternatives is ethanol, but David Pimentel of Cornell University's College of Agriculture and Life Sciences says it takes a whopping 11 acres to produce enough ethanol for one year for one car. This same land can feed seven people for the same amount of time. Further, about half the cost of every gallon of synthetic oil produced in this country goes to federal and local taxes, thereby making the process of manufacturing ethanol unprofitable without government subsidies (now around 50 cents/gallon).
Meanwhile, tar sands (which are exactly what they sounds like), hydrogen, wind, solar, and other new technologies like making oil from garbage all loom distantly as potential future solutions. The trouble is that no one can tell which will be "net energy losers," meaning it takes more energy to produce than to use, and which will not.
Currently, biodiesel stands as one of the most emergent domestically produced alternatives, and in 1998 a jointly sponsored study by the US Departments of Energy and Agriculture concluded "biodiesel reduces net carbon dioxide emissions by 78 percent" compared to its petroleum counterpart. But it too has its pluses and pitfalls, and it will most likely take a combination of alternative energy sources to produce on a hulking scale what is needed to feed this fuel-ravenous nation.
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