At some point in the future--perhaps in my lifetime--oil will become more like gold. Both are commodities, but the rarity of precious metals makes us treat them differently.
We buy gold at jewelry shops, which have thick glass windows and complex security systems. Gold is decorative, symbolic, and used in tiny amounts to enable certain electronics to function. Gold is a status symbol, and the color of power. People don't spill gold.
Conversely, today we can buy oil at corner gas stations, where anyone can drive up, and with the swipe of a credit card, fill up their car with gas for $30 or so (depending on your vehicle). Oil is lined up in plastic containers on shelves at PepBoys and hardware stores. We mow our lawns, fix our bikes, and even drink from plastic bottles made using petroleum products. Oil is everywhere, and for the masses.
At some point, however, will gas stations have secure pumps protected by armed guards? Instead of tanker trucks, will oil be transported in Brinks-like armored cars? Will there be a day when the price (and therefore the real value) of oil will be comparable to gold? By then we will have an alternative to oil, or will driving your car to the supermarket become the equivalent of wearing an expensive gold watch?
I'm thinking these thoughts as I read Daniel Yergin's The Prize: The Epic Quest for Oil, Money, and Power, which won a Pulitzer Prize in 1991. I'm only two hundred pages into the book, but I've already seen how oil--the result of millions of years of decomposing plant and animal matter--became the global elixir in matter of decades at the end of the 19th century. battleships are party to blame. The Royal Navy's switch to oil-fueled ships in the early 1900s led to the establishment of the Anglo-Persian oil company, and the beginning of the great hydrocarbon race in the Middle East. Britain, of course, had no oil buried in its own soil, just sweet Welsh coal.
And then last Friday in the New York Times I read this article, "Rising Demand for Oil Provokes New Energy Crisis," which described the oil market's flirtation with $100 a barrel as "the world's first demand-led energy shock." My recall of supply and demand graphs from Harvard's Ec10 course is fuzzy, but I do remember that unless supply keeps up with rising demand, the price will continue to rise. Is there enough oil buried in the ground to maintain our lifestyle, or have we built a society that runs on something as precious as gold.