Several studies predict the world will reach peak oil production by 2035. For India, a viable alternative is hydel power, but this has been repeatedly stymied by environmentalists in spite of India being home to many suitable locations for hydel plants
Bruce Nusabaum, in his book World after Oil published in the early 1980s, dealt with the oil crisis of 1970s, when oil prices had risen from $5 to $30 per barrel, and showed how the world dealt with the crisis by investing more in exploration, especially on the high seas, and severely reduced energy consumption of power-guzzler processes and machines via many computerised process controls (for example, the energy consumption for steel-making was reduced from 18 to 6 Gwh per tonne).
With reduced consumption in processes and machines and rising crude production, oil prices remained stable for many years, and starting rising again in the 2000s once the new finds started getting reduced. I recall Swaminathan Aiyar’s ‘Challenge of Hubbert’s Peak’ dated May 21, 2005, stating that oil prices will rise fast, and the world production will not be able to meet the rising demand of China and India. Hubert had predicted in the 1950s that US oil production would peak (Hubert’s peak after which production declines) in 1970, and it did.
Various studies show that the world would reach its Hubert’s peak in 2035, and we are moving towards a huge crisis. There are some other energy sources identified—such as shale gas—but they have huge environmental problems. Gas prices too seem to be peaking along with crude prices, particularly in India, in addition to transportation, processing costs, etc. We have been buying gas at more than $15/MMTU, at the exchange point.
Stephen Leeb first attracted world opinion in his book The Oil Factor, published in 2004. The book was controversial as it predicted an outlandish price of $100/barrel for crude by the end of the decade. When prices started rising fast, he wrote another best-seller in 2006, The Coming Economic Collapse: How You Can Thrive When Oil Costs $200 a Barrel. Fortunately, the economic crisis of 2008 prevented this from happening, but as we come out of the economic crisis, we are inching towards this price.
In India, we face multiple jeopardies. The exchange rate is fast deteriorating, leading to a much higher import price, and the indigenous production percentage is continuously going down. Also, with huge fiscal deficits, the government’s