The Future of Airline Operators amidst the Oil Crisis - Essay Example

Theories abound the origin of oil, and like other forms of fossil fuel, is believed to have come from ancient animal and plant remains that was buried under soil and mud through a very long period of time and settled down into the Earth's crusts. The buried ancient animal and plant matter piled upon the Earth's crust and eventually compressed and heated by the Earth's immense internal pressure and temperature. The oil then seeped through the rock layers forming reservoirs, most of which are found in desserts, ocean bottoms, ice layers and many other external terrain formations (Wikipedia, 2006a).

These oil reservoirs are being harvested right now by countries that were fortunate enough to have an oil reserve in their midsts, particularly in the Middle East where the most abundant oil reserves are found. These countries now form the organisation known as OPEC (Oil Producing and Exporting Countries) which controls most of the world's oil supply and prices. While it seems like the supply of oil is unlimited it is not, the supply of oil is beginning to dwindle. . d was way cheaper back in the period of the World Wars it was at these period that oil was still abundant and conflicts on the price and supply of oil were non-existent.

The OPEC was not founded yet and inflation was not too much prevalent back then. Brandly (2004) the current oil crisis is predicted by Hubbert's Peak (or Hubbert's model or theory as some authors put it) which states and assumes that oil is non-renewable and that even though organic matter is currently added to the Earth's crust and that the rate of decomposition and conversion of this organic matter into crude oil will not catch up with the world's demand for oil. The 'peak' in Hubbert's Peak refers to the highest point of oil production at a certain area which will be soon followed by a sudden drop leading to a crisis.

According to those who believe in Hubbert's theory, the world is now at its peak and is nearing another major oil crisis not because of political conflict but mainly due to a real short in oil supply. In a National Geographic article written by Appenzeller (2004), oil companies are now putting more human and financial resources in finding new oil sources. It only means that the actual crisis is happening not after the 1st drop of oil has been extracted but rather in the present when oil production is at its peak.

The world is predicted to run out of oil in about 5 to 30 years from now. The oil shortage will not only affect transport and power generation, but also other factors as Amos (2004) reported, stating that oil process will affect birth rates, food prices and other commodities. This is especially true with Third World countries where the price of oil on the world market affects the basic commodities. Amos (200) points out that the economic depression will force people