Overheard recently at a Houston coffee shop: "I'm worried that these hydrogen-fueled vehicles will put oil out of business." Many in oil seem to have thought at least once about this, and some have had their concerns put at ease. The thinking goes as follows. Instead of putting oil out of business, transportation that is increasingly based on hydrogen-rich fuels may be its salvation, for myriad reasons. Eventually, too many people will compete for too few gallons of gasoline. That will make the price absurdly expensive. Demand will decline. We'll all go back to the dark ages. Only Saudi Aramco will still be in the oil business. PDVSA, Pemex, BP and ExxonMobil would be the last to fold-they couldn't afford to keep the lights on at the production platforms. But what's supposed to prevent this is global transportation's decreased dependence on petroleum-based products-gasoline and diesel. Enter hydrogen-rich fuels. These are expected to be based on natural gas, which is rich in hydrogen while petroleum is rich in carbon. The oil companies that are also in the natural gas business should fare just fine. The oil companies that are still just in the oil business should do fine, too-their product wouldn't be priced too out-of-reach for those who still use it. And, everyone will keep on motoring. (See "Meet the Fuel Cell," January 2001, Oil and Gas Investor.) The doom-and-gloom supply forecasts have been around for a century. But odds are demand could eventually outstrip economical supply at current rates of consumption. To put the world's increased oil demand in perspective, here are some figures from Cambridge Energy Research Associates, Cambridge, Massachusetts, and its partner in the "Global Oil Trends 2002" report, Sun Microsystems, Palo Alto, California. Global oil consumption in 1970 was 46.48 million barrels per day. Last year, it was 76.1 million per day-64% hungrier. At this rate of growth, demand would be 124.8 million per day in 2031. Maybe the rate of growth won't increase equivalently in the next few decades as in the past few, but the odds are it will grow to some degree, if the world's economies improve at all and if transportation-the greatest consumer of petroleum products-is still wholly based on carbon-rich fuels. Since it's in most everyone's interest that the world's economies grow, then from where will the oil come? Of course Saudi Arabia can easily increase its production, but to how many barrels per day? It currently produces 8 million barrels per day, supplying about 10.5% of world demand. Russia produces 6.7 million. The No. 3 producer is the U.S. at 5.81 million. Behind it are Iran, 3.68 million; China, 3.23 million; Mexico, 3.0 million; and Norway, 3.13 million. Following these are Venezuela, Iraq, the U.K, the UAE, Nigeria and Kuwait. Of these 13 countries, all but two-the U.S. and China-are net exporters of oil. Do we really want Russia, Iran or Iraq to stand between an American and his regular Krispy Kreme- or Starbucks run? Yet the U.S. has failed to reverse its oil consumption and production trends for several decades; instead, the gap has only widened. In 1970, U.S. consumption was about 14.96 million barrels per day and production was 9.64 million, for a 36% shortfall; last year, consumption was 20.01 million barrels per day and production was 5.81 million, for a 71% shortfall. Vexing is Americans' lack of concern with U.S. dependence on nondomestic oil supply. Instead, it's all the rage to complain when gasoline prices begin to creep higher than $1 a gallon again. (According to author Nathaniel Philbrick in his recent National Book Award-winner In the Heart of the Sea: The Tragedy of the Whaleship Essex, a barrel of sperm-whale oil was worth $22.08 in the early 1800s. Not much has changed in 200 years.) Americans should worry, instead, that gasoline is still so cheap; the hole just gets deeper each time prices abate. And, this hole is bigger than meets the eye: like a street-debt, it may be $1,000 today, but it's bigger than life itself after it's been sold five times and each new owner is seedier and greedier. Who will our friends be in 2020? Today, our most cherished hydrocarbon suppliers are Saudi Arabia, Mexico and Venezuela. (Of course we love them all dearly, as they all contribute to keeping prices affordable.) What will each be able to supply us in the future, and will they still be friendly to the U.S.? No matter if our hydrocarbon-rich allies change in name or nature in the future, becoming a nation whose method of transportation is based more on natural gas than gasoline will certainly bring us new friends and leverage in the energy-supply game. -Nissa Darbonne, Managing Editor