A Robust Strategy for Sustainable Energy

ONCE AGAIN THE debate has intensified over whether energy as a com-modity is running out. Just six or seven years ago the world seemed awash in oil, yet today many pundits predict the end of oil and indeed the end of the fossil-fuel era.1 With its recent merger with the California-based oil company Unocal, Chevron has placed a bet on ever-increasing oil prices.2 Two other oil giants, BP and ExxonMobil, on the other hand, have pub-licly stated that resources appear plentiful.3 Even if the world’s oil resources are indeed plentiful, world energy supply remains very much constrained. As a world population headed toward 9 billion strives for a standard of living that the industrialized nations take for granted, energy demand will increase rapidly, straining the entire supply chain from exploration to refining. To complicate mat-ters further, oil and gas resources are concentrated in a small region of the world, leading to a more fragile and more volatile trading system that shows strong monopolistic tendencies. In addition to all of this, environ-mental concerns pose perhaps the toughest constraint of all.