All in all, a silent technology revolution is occurring across the world. This is thanks to the high petroleum prices.

History has shown that we do not run out of any commodity. As a commodity appears to get scarce its price rises, it automatically creates incentives for finding substitutes and more efficient ways of using the commodity. Eventually the substitutes may even become more important.

The same will happen to crude. It has become more expensive as it should. The world is looking for ways to find appropriate substitutes as well as use what is available more efficiently. Crude prices might rise more for a while and they might also stay at those levels for a few years more, but they will not continue to go up indefinitely. The more they rise now, the more they will stagnate or go down later.

And so we will never really run out of crude. We will just stop extracting it — for it will not remain an important enough source of energy at those price levels.

This crude oil price increase therefore needs to be welcomed. It will finally free us from our over-dependence on this polluting and unequally distributed energy source. Lowered international economic inequality, fewer wars in the Middle East, lowered greenhouse gases — are only some of the long term benefits. And a few years’ lowered growth or higher inflation are a small price to pay for this.

But all of this fails if governments do not fully pass on the price increases to the consumers, for no such incentives are then created. And in that case, we may actually run out of crude.

... contd.