Reuters reports that early Friday trading has pushed the price of oil above $78 per barrel. Needless to say, this is yet another record high price for oil after a string of record highs that have repeatedly been surpassed in the last few years. Given the enormous geopolitical instability in the Middle East, along with shaky situations in other major oil producing nations like Venezuela and Nigeria, the ever-increasing demand for oil, along with the ever-dwindling global supplies of oil, a string of similar headlines announcing record high oil prices is more than likely to ensue in the following months, if not years.
Paul Marriot reports in the article,
“Oil in New York is up around 28 percent in 2006, rallying from below $20 in January 2002 amid rising demand led by the United States and the second-largest oil consumer China, together with a series of real or potential supply disruptions.”
So oil has nearly quadrupled in less than five years. For decades, environmentalists have been urging the world to find alternative energy solutions to minimize pollution and the harmful effects of drilling and possible oil spills. Avoiding complicated global petro-politics has been another incentive to steer away from oil. In recent years, thanks to soaring oil commodity prices, there is now a business incentive to develop non-oil energy sources.
Nevertheless, reducing our dependence on oil does not necessarily lead to environmentally-friendly alternatives. In the USA, interest does exist in making further use of coal reserves and increasing our reliance on natural gas. The road to solar, and wind is unfortunately not guaranteed to be a smooth, direct sail for the near future.
In most recent energy developments, the BBC reports that a 1,100 mile-long oil pipeline has opened. This “Caspian pipeline” will pump a peak capacity of 1 million barrels of oil per day from reserves in the Caspian Sea through Azerbaijan and Georgia to a Turkish port. The BBC reports that the USA has strongly supported the development of this pipeline, “The US is keen to challenge Russia’s dominance of energy supply routes and to promote the Caspian as a secure additional source of fuel channelled via America’s regional allies.”