This is what is happening and will continue to occur for a while. Governments are resigning themselves to a high inflation condition for a while, most analysts are lowering their economic growth expectations, and we are all thinking of action points for this new high inflation-high energy cost-economy.

Countries across the world are dealing with the price rise in different ways. Some such as the US are diverting crops from one use towards energy and ethanol from corn. Many others are increasing research and investments in other non-conventional energy sources. Still others are putting in efforts to scout for more petroleum sources. And almost all are trying to put in place mechanisms that will enable greater efficiency in energy usage.

The net result is that what decades of international agreements, Nobel Prize winning documentary makers and NGO leaders could not achieve, is being achieved. Most of the newer technologies appear to be more environmentally friendly and many more technology advances are expected in the next few years as greater R&D occurs.

In other words, the rise in petroleum prices is forcing individuals, companies and governments to either use petroleum more efficiently or use something else for their energy requirements. At high enough price levels, many technologies that were otherwise non-economical have become viable. And the risk-return parameters also now favour greater experimentation with new sources of energy.

High petroleum prices are leading to greater experimentation on all three fronts — generation, transmission and storage of energy. Sources such as biomass, nuclear, geo-thermal, solar, and wind are increasingly looking more and more attractive. Transmission technologies are improving in many different ways with much lower transmission losses and some movement is also being seen on research in wireless transmission of energy (imagine putting all of power generation in outer space and merely transmitting the energy generated). Batteries are getting lighter and cheaper and are expected to also become less environmentally damaging in the near future.

... contd.