The world will run out of oil around 100 years before replacement energy sources are available if oil use and development of new fuels continue at the current pace, a US study warns.
In the study, researchers at the University of California, Davis (UC-Davis) used the current share prices of oil companies and alternative energy companies to predict when replacement fuels will be ready to fill the gap left when oil runs dry.
And the findings weren't very good for the oil-hungry world.
If the world's oil reserves were the 1.332 trillion barrels they were estimated to be in 2008 and oil consumption was some 85.22 million barrels a day and growing at 1.3 percent a year, oil would be depleted by 2041, says the study published online last week in Environmental Science and Technology.
But by plugging current stock market prices into a complex equation, UC-Davis engineering professor Debbie Niemeier and postdoctoral researcher Nataliya Malyshkina calculated that a viable alternative fuel to oil won't be available before the middle of next century.
The researchers analyzed the share prices of 25 oil companies quoted on US, European and Australian stock exchanges, and of 44 alternative energy companies.
They found that the market capitalization, or total value of all stock shares, of traditional oil companies far outstripped that of the alternative energy companies.
That indicated that investors believe oil is going to do well in the near future and occupy a larger share of the energy market than alternative energy, said Malyshkina.
"To assess the time until a considerable fraction of oil is likely to be replaced by alternatives, we used advanced pricing equations to make sense of the large discrepancy between the market capitalization of traditional oil companies and the market capitalization of alternative-energy companies," Malyshkina told AFP.
The answer they came up with was that there would not be a widely available replacement for oil-based fuels before 2140, which, even if the more optimistic date of 2054 for oil depletion is retained, would mean there could be a nearly 90-year gap when it might be difficult to run a motor vehicle.
Nearly two-thirds of crude oil is used to produce gasoline and diesel to run vehicles, says Malyshkina.
The calculations used by the researchers are based on the theory that long-term investors are good predictors of when new technologies will become commonplace.
Similar calculations have been used to accurately predict the outcome of elections and the results of sports events, Malyshkina said.