"A little over a year ago we helped organise an effort among a wide range of groups in the US to draw public attention to the potential for two emerging trends to bring down the global economy. These trends, which affect the price and availability of energy, are the greater-than-expected pace of increased demand for oil in China, India and other emerging markets and the threat of disruption of Persian Gulf supplies by a terrorist attack. They have helped push the price of oil to more than $60 a barrel with forecasters seeing little prospect of it ever going below $50 again."

"The sober awakening to these two trends by governments and the oil industry was underscored by a new round in the debate concerning the 'peak' of oil reserves - the top of the bell-shaped curve that represents the world’s oil reserves and the lower production and higher cost of oil products that lie ahead when the peak is reached. Most experts agree that we will reach the peak within 25-30 years."

"Because the impact of growing demand and dwindling supplies is long-term, it is not surprising that there has been only a cautious response to these factors from governments, with no noticeable action. It is less understandable that political leaders from Tokyo to London and Washington have failed to deal with the threat of a disruption in oil flows from the Gulf."

McFarlane and Woolsey call for four responses: 1. Blend ethanol with gasoline as Brazil does, 2. Use existing technology to enable cars and trucks to burn a variety of fuel mixtures, 3. Improve hybrid-electric vehicles, 4. Develolp lighter, stronger carbon composite materials to reduce vehicle weight.

McFarlane and Woolsey point out that "Predictably there has been resistance towards such technologies within the automobile and energy industries, but their concerns over safety and cost can be answered. Alternative fuels are affordable and the practicality of the vehicle technologies is being shown in Japan by Toyota and other manufacturers. Odds are there will be a plug-in hybrid from Japan within two years and it will take away even more market share from Detroit."

McFarlane and Woolsey conclude their commentary with a warning: "Even if all these measures were adopted it would take 20 years to replace the 150m vehicles on the road in the US. But the cost of not taking action could be catastrophic."

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