One of the biggest problems in the world we face today is energy conservation and finding alternate sources of energy or renewable energy sources to ease our dependence on foreign sources and non renewable energy sources. The world is consuming oil at an alarming rate and the price of oil keeps sky rocketing and it doesn’t seem like there is a plan to use an alternate source of energy once the oil is gone. Oil and electricity are just part of the problem. If we do not find an alternate source of energy how are we going to power our cars, air conditioners, heaters, busses, planes, trains, and anything that transports us from place to place every single day.
“The term "peak oil" has come to be synonymous with a host of concerns about future energy supplies. (1) A vast non-economic literature addresses whether global oil production has peaked or will soon peak; what consequences that could have for fossil fuel dependent societies; and what should be done about it. (2) Unfortunately, most of this literature fails to recognize the role that prices could play in allocating scarce oil. For example, Hirsch et al. (2005) notes a wedge between projections of oil production, which peaks, and oil consumption, which does not. (3) The authors analyze a variety of mitigation policies and conclude that prompt action is required to prevent future shortfalls and economic disruptions. However, they do not mention the effects of these policies on prices or the effects of prices on these policies. Similarly, Lovins et al. (2005) proposes a variety of demand reduction policies for "getting the United States completely, attractively, and profitably off oil." However, the analysis ignores the fact that these policies would decrease demand for oil, presumably decreasing the price of oil and the profitability of the policies.” (Holland, Steven P)
Very high prices for gas and oil are an effect of the increase in demand for oil and the more scarce that oil becomes the higher and...