Oil's dominance may be over

20/02/2009

The pre-eminence of oil as the world's principal energy source may be challenged within ten years, a new report claims.

According to consultancy group Arthur D Little, growing concerns about climate change, extreme price volatility and global energy security issues may facilitate a large-scale transition to new fuel sources within the coming years.

In its report, the consultancy insists that the price fluctuations of the last year, during which crude prices have fallen more than two-thirds from a record price of $147 a barrel, has forced the realisation that the world needs more stable fuel sources.

Heating oil and other distillates prices have also plummeted during this period, although petrol and DERV prices have been slightly more insulated from the plunging cost of crude.

"To varying degrees, governments across the globe are acknowledging publicly, many for the first time, that decreasing reliance on imported oil - and quickly - is becoming an energy policy imperative," insists report author Peter Hughes.