Petroleum will be replaced by biodiesel (vegetable oil) or ethanol. Right now biodiesel is winning, but both technologies are improving fast.

Look at Wikipedia for peak oil, and you'll see projections that the rate of increase of petroleum demand already exceeds the rate of increase of petroleum production. In about 5 years (2010), the rate of petroleum production will start to decrease, and in about 10 years(2015), it will decrease rapidly. If you buy a car that runs on only gasoline, you're going to be paying $20/gallon ten years from now, rising fast.

So what's the alternative?

1. The easiest alternative for a gasoline engine is ethanol, usually made today from sugarcane. It's just a matter of engine tuning, plus a tiny gasoline tank for starting the car on cold days (alcohol can't handle winter cold starts). Ethanol burns much cleaner than gasoline. Brazil already has a large portion of cars that can switch from gasoline to ethanol with the dashboard control ("flex fuel"), and unsubsidized ethanol is half the price of gasoline. Unfortunately, they've achieved that by chopping down huge swathes of rain forest and planting it with sugarcane. Producing ethanol takes a lot of land (at least it does today).
2. If you start from a diesel engine, biodiesel (vegetable oil) is obvious. No engine modifications needed at all. Diesel (from petroleum) currently costs half as much per mile as ethanol or gasoline, and packs more miles per gallon to boot. Unfortunately, because diesel engines burn hotter than gasoline engines, they produce more smog (NOx). We've already got quick-growing oil-producing algae that could easily supply all our needs, if only we could feed it enough CO2 and grow it in bulk without weeds taking over the gardens.
3. Solar energy. I bet within ten years we'll use solar cell sidings for our houses, and eventually our roads and sidewalks too. Getting hot water via the sun on black pipes works really well. Biodiesel and ethanol are indirectly capturing solar energy too.
4. Methanol? Hydrogen? Batteries? Too bulky and/or explosive. It's gonna be biodiesel or alcohol, or some mix of the two. Although hybrid cars (battery for regenerative braking and short trips, plus fuel for highway driving) seem to be a winner.

The tech for both ethanol and biodiesel is improving quickly. I don't know which will be cheapest and friendliest in the long run. In the short run biodiesel is winning. The thing for consumers to do now is buy either a flex-fuel car or a diesel.

Bob Predicts the Future

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