THE ERA OF "CHEAP" oil is gone for good. The world's oil reserves could be 80% lower than predicted, according to scientific studies. The experts say production levels will peak around the turn of this decade after which time the price of petrol and other fuels will spiral. "The decline of oil and gas will affect the world population more than climate change," according to Swedish expert, Professor Kjell Alekett, who adds, "we are facing a very critical situation globally."

Is the world really running out of oil? After surveying the views of the world's leading experts in the field of monitoring and tabulating

the world's petroleum supplies--the magnitude of the problem and the complexity of the solution (if there is a solution to this dilemma) becomes clear.

For instance, for new sources of oil to be identified and extracted--the price of this important commodity will have to rise--as most of the "cheap oil" that could be taken out of the ground and sold for $20-30 a barrel--is gone. What comes next is a steady increase in the price of oil until the new hikes make it profitable for the producers to extract it from less accessible sources. This is inevitable and no amount of investment in alternative energy development or reduction in current consumption will alter it.

Some of the world's leading experts together with oil industry executives have warned that the era of cheap oil is drawing to a close. Walter Yongquist observed petroleum and alternative energy sources in 70 countries working for the Exxon Corporation and as a consultant to Sun Oil, Shell Oil, and Amoco. He claims the decline in the amount of energy recovered in the US compared to energy expended was 28 to one in 1916. Today it is two to one, and dropping. His research has shown that by 2005, the cost of extracting a barrel of oil in the US will be the price of a barrel of oil, which means domestic oil production will be untenable. David Goodstein, professor of physics and vice provost of the California Institute of Technology, in his book, Out of Gas: The End of the Age of Oil, argues that the worldwide production of oil will peak within this decade. The subsequent decline in availability of fossil fuels could plunge the world into global conflicts as nations struggle to capture their piece of a shrinking pie. Globally, nature left about two trillion barrels beneath the ground, and the peak will occur when we reach the halfway point, he claims. Since we have already consumed close to a trillion barrels, the peak can't be more than a few years away.

Mike Bowlin: Chairman and CEO of ARCO, said in 1999: "We have embarked on the beginning of the last days of the age of oil." Dr. Colin Campbell agrees. In his report The World Oil Supply 1930-2050, he notes: "The major oil companies are merging, downsizing and outsourcing, and not investing in new refineries because they know full well that production is set to decline and that exploration opportunities are getting less and less. We have depleted most of our high-quality resources; the supply obtainable from low-quality deposits is largely limited by the supply of fuel; and the supply of fuel itself is bound by these constraints."

Analysts at Douglas-Westwood, a UK-based energy industry consulting firm state: "The world is drawing down its oil reserves at an unprecedented rate, with supplies likely to be constrained by global production capability by 2010. Oil will permanently cease to be abundant. Supply and demand will be forced to attain a balance--but at a price. The world is facing a future of major oil price increases--which will occur sooner than many people believe."

Geologist, Princeton University professor and author of Hubbert's Peak: The Impending World Oil Shortage, Professor Kenneth Deffeyess, predicts that, after the peak, the world's production of crude oil will fall, never to rise again. "Developing alternative energy sources on a large scale will take at least 10 years. …