NEW YORK (Reuters) - A surge in the price of crude is threatening global growth for the first time in decades and spurring a desperate surge in interest in energy alternatives and new technology to keep conventional oil flowing.
How companies and governments navigate the treacherous energy landscape -- which some analysts liken to that of the 1970s and 1980s -- will shape the future of the global economy and potentially tilt the geopolitical balance, experts said.
"What happens ten years down the road will be determined by the decisions made on energy today," said David Kirsch, analyst at PFC Energy in Washington. "Countries need to get serious about the underlying problem of demand for oil."
Oil prices have doubled in a year to around $130 a barrel as rapid increases in consumption in China and other developing countries strain supplies, and some analysts have said crude could top $200 a barrel by 2010 as the market remains tight.
While the boom has helped big oil producer countries, particularly Russia and parts of the Middle East, there are signs the major consumers -- the United States and parts of Europe and Asia -- are starting to crack under the strain.
High prices are hitting motorists at the pumps, hobbling energy-intensive industries like airlines and freight and feeding broader inflation including prices hikes for food that have led to protests and even in extreme cases riots around the world.
"The oil price is unsustainable. I think we've reached the point now where we're starting to see significant responses from consumers," said Jim Hamilton, professor at the University of California in San Diego.
A SILVER LINING?
The silver lining could be in how the world fights back. Whereas in the 70s, governments looked mainly to conservation as a way to ease price woes, this era is looking to increased investment in alternative energies and better oil field technology to reach more resources.
"Our time is very definitely coming," said Jeremy Leggett, chairman of British solar power company Solarcentury and former environmental campaigner. "The world is going to be beating a path to our doors... The oil crunch is coming soon."
In a sign of the shifting mentality, legendary Texas oil man T. Boone Pickens -- who made billions betting on higher oil prices -- has gone green with a plan to spend $10 billion to build the world's biggest wind farm.
Energy analyst and oil historian Daniel Yergin said earlier this month that record U.S. crude oil prices have reached a "break point" that will spur a shift away from an oil-centric transportation sector toward alternatives.
Alternative fuels have already made big inroads into energy markets, with ethanol making up some 7 percent of the U.S. gasoline pool thanks to government mandates and subsidies.
Americans have already tapped the brakes on their notoriously voracious road travel and are also starting buy more fuel efficient cars in a shift away from SUV's.
But the move isn't all green. Continued...
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