Will hydrogen soon kill Middle East crude?
The Economist magazine has estimated that "With oil prices at their highest level in two decades, revenues of $600 million a day are gushing into the Gulf, double the volume during the 1990s. The monarchies of the Gulf Cooperation Council are alone likely to earn $35 billion more from oil exports this year than last ..." - and that excludes big producers such as Algeria, Libya and Iraq.
Arabs should beware. The bonanza will not last forever. Instead of frittering away their oil wealth on conspicuous consumption, on real estate extravaganzas and uncertain overseas investments, the Arabs should devote every surplus dollar to preparing their societies for a post-oil economy. As most Arabs are today under 30 years of age, a radical change could occur in their lifetime, and it could be painful. Urgent measures need to be taken to prepare for the day when the world economy will no longer be dependent on Arab oil.
Instead of deregulating their economies, eliminating corruption, privatizing their inefficient state-owned industries and stimulating growth in non-oil sectors, high Arab oil revenues have created a sense of complacency and retarded the introduction of much-needed reforms. Most Arab economies have stagnated over the past two decades with the result that 80 million Arabs out of a total of 290 million still live below the poverty line.
It is almost certain that within three, four or, at the latest, five decades from now, the petrol pump will have been left behind and replaced by some other form of energy-provider. At present, internal-combustion gasoline engines drive the world's 500 million cars. By 2030, the number of cars is forecast to increase to more than 2 billion, largely due to growth in Asia. What new technology will drive them? Might many of them be all-electric vehicles? Or might they be powered by hydrogen fuel cells - hydrogen being, after all, the most abundant element in the universe?
Whatever the answer, tomorrow's cars are most unlikely to be the gas-guzzlers we see on the roads today, pumping carbon dioxide into the atmosphere and contributing fatally to global warming and climate change.