I've researched this topic extensively and all my posts on APC have centered around this issue of oil price. While I don't have all the answers on this one, I really think we're seeing peak oil. It's real simple: virtually all oil producing nations have peaked in terms of oil discoveries/production. As a matter of fact, the only nations that have not peaked are in the middle-east...Saudi Arabia, Iraq, maybe Kuwait. This is where speculation comes into play. The Saudis have never allowed an independent audit of their supposed oil reserves. This from a country that produced 17 of the 19 hijackers on 9/11. We're gonna trust the Saudis when they say they have plenty of reserves left? They have not discovered a major oil reserve in Saudi Arabia since the 1960's. Currently they are barely able to produce 12/13 million bbl per day, despite the explosive economic growth in China and India.

The market will not adapt to the price of oil...oil built the modern-day marketplace. I've always thought that all pilots should know about Peak Oil and it's father, M King Hubbert. I believe his ideas are as important as Bernoulli's and Newton's. I've posted some links below, they're the best explanation of what we're seeing and going to see in the future. To say the least, a very interesting time to be an airline pilot.

Alternative energy is not the answer. It's too energy expensive to produce to justify its extensive use. It's a step in the right direction, but nothing in this world will ever match the fossil fuels in terms of their power and efficiency.

http://www.youtube.com/watch?v=ImV1voi41YY
http://www.youtube.com/watch?v=4IwtAQzrfiw