As oil prices keep increasing, many are looking to a future without oil. It is hoped that if oil prices keep rising, alternatives will be developed and this will enable a smooth transition. Already, car manufacturers have cars which run on hydrogen, natural gas, even solar panel. The longer oil prices rises, the more attractive these options will be. It is not unfeasible that in a decade, we will simply not need or want to consume oil any more. However, this transition to a world without oil may not be as smooth as many hope. The transition to a post oil world could be a lot more painful that we would like to admit.
How would an oil free world impact on the world economy?
The Doomsday Scenario. The impact of declining oil availability depends on whether the alternatives to oil materialise. For example, it was hoped nuclear fusion would provide low cost energy, but, technological developments have been disappointing. If we don't find realistic alternatives to oil, the consequences for the global economy could be serious. Rising prices and costs, declining growth and living standards as people struggle to meet their energy needs. The world has become so dependent on oil, the question is could we survive without?
Wealth of Oil exporters would be reduced. At the moment, oil exporting countries are earning billions of dollars in oil revenues; this gives them economic power and to a large extent political power. If oil is no longer in demand, these countries would face a rapid period of readjustment; they are likely to face a fall in wealth, unless they could create growth in other sectors. The problem is that it is currently so easy for them to make money from oil other sectors of the economy are fundamentally underdeveloped, therefore they would struggle in an economy no longer reliant on oil.
Oil Importers Could be Relatively Better off.
The change in the use of oil could lead to a readjustment of global...