Sky High Oil Is The Business Opportunity Of The Decade

It doesn’t seem that long ago that the papers were talking about the chaos that would follow if oil hit $30 per barrel. A few years on and it’s past $120 per barrel and showing no signs of stopping.

As a result, prices are rising - particularly prices of oil based fuels. Many would argue that this is bad news for motorists, indeed there are many that are encouraging us to boycott BP and ESSO or petition the Government in order to get them to lower prices/taxes of fuel.

The problem is that such boycotts are based on a flawed premise:

Now that the oil companies and the OPEC nations have conditioned us to think that the cost of a litre is CHEAP, we need to take aggressive action to teach them that BUYERS control the market place not sellers.

The reality is however that the price of oil is being set by the buyers - in fact the worldwide demand for oil has shot up, as the New York Times explains:

…prices have been rising steadily as demand for gasoline grows in developed countries, as hundreds of millions of Chinese and Indians climb out of poverty and as other developing economies grow at a sizzling pace.

They go on to note that demand for oil in China and India is expected to double in the next two decades - not surprising as nearly HALF of the worlds population livings in those two countries. Do you really think BP, ESSO or OPEC are going to notice a few million Brits buying less fuel while over two billion Chinese and Indians start buying more? I don’t.

However, I don’t think the high price of oil is a bad thing. For years we’ve been warned that oil is running out and that burning it is a major contributor to greenhouse gasses - but despite acknowledging the facts we’ve not really changed our habits. Experience tells us that when prices increase the incentives to find alternates also increases and that’s got to be good news for the environment. Even if it’s a pain in the butt for most of us now.

It also makes me think that alternatives to oil are going to be the next big boom - if you missed the Internet boom then here’s your advanced warning alternatives to oil is the biggest business opportunity of the next 10-20 years - I predict that there will be many billionaires made in businesses that provide alternative technology to oil.

Don’t think that it’s limited to creating an alternate to oil either. This will be a disruptive change, and businesses as diverse as video/teleconferencing (removing the need to travel to a meeting), solar energy (no need for oil fired power stations), packaging (good bye plastic bags) will be part of it.