Oil is through the roof, even the IEA is puzzled, and the peak oil theory is back in the headlines.

But we still say this is a bubble  see yesterday’s article  besides, only bubbles can explain sudden spikes like the ones we are seeing at present.

Mind you, we should be learning our lesson now, and turning our attention to the real ray of hope the sun.

Now the Paris-based International Energy Agency (IEA) has really set the alarms ringing.

Yesterday, Fatih Birol, the chief economist there, said, “But what has happened in the last few years has not been in line with economic theory. The price of oil went up sharply between 2004 and 2006 and demand actually increased. That may seem bizarre but it is the result of new buyers coming in, such as China and the Middle Eastern economies where fuel is subsidised by government and rises are not reflected on the consumer side.”

So, it is all down to too much demand then?

Mind you, this morning, the Independent led with an article asking whether we are running out of black gold.

Yet there is supposedly more oil lurking in the tar sands of Alberta Canada than has ever been found, anywhere in the world to date.

We will run out of oil one day, but it seems that since investment into exploration has been so low over recent years it is far too hasty to say that time is imminent.

Mind you, the longer oil stays up, the more likely it is we will develop alternatives that really will be cheaper in the long run.

Recently, Scientific American magazine ran an article suggesting that by 2050 solar energy will provide sufficient power so that the US will be completely free of foreign oil.

The Scientific American article said that the energy in sunlight striking the earth for 40 minutes is the equivalent of global energy consumption for a year.

The real scandal though is that it is taking so long to exploit this resource.

But these days, technology is changing so fast, all technological industries seem to obey rules just like Moore’s Law.

The potential not only to tap into this vast solar resource, but to do so quickly, is there.The greater the investment, the faster will be the rate of technological progress, and the sooner will come the time when the resource can be exploited rapidly and cheaply.

Trouble is, governments must be willing to think 10 or more years ahead.

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