Marketing Review — Summer 2008 - (Page 36) TREND #30 Despite efforts to develop alternative sources of energy, oil consumption is still rising rapidly. pain should ease once the American economy begins to recover in late 2008. At this point, consumers seem to be largely inured to the idea of paying more for their fuel than they once expected. Americans are cutting back temporarily while the U.S. economy is in decline, but travel will recover quickly once GDP growth returns to positive territory. Elective travel should be one of the most inelastic markets, declining rapidly when prices follow costs higher. In recent years, it has proved to be much more comfortable with rising costs than many observers might have imagined. where natural resources are plentiful. Iceland’s drive to develop geothermal power is one example. ASSESSMENT: This trend will remain in effect for at least 30 years. IMPLICATIONS: Though oil will remain the world’s most important energy resource for years to come, two or three decades forward it should be less of a choke point in the global economy. We should feed our stomachs before we feed our cars. Producing ethanol from switchgrass would cut the cost of corn by 20 percent, according to the Worldwatch Institute. This would significantly ease the global food crisis. Solar, geothermal, wind, and wave energy will ease power problems where these resources are most readily available, though they will supply only a very small fraction of the world’s energy in the foreseeable future. Declining reliance on oil eventually could help to reduce air and water pollution, at least in the developed world. By 2060, a costly but pollution-free hydrogen economy may at last become practical. Fusion power remains a distant hope. Cold fusion also remains a long shot for practical power, but FI believes it can no longer be discounted. If the U.S. Navy’s reports of successful experiments can be corroborated, power plants based on the process could begin to come on line by 2030. IMPLICATIONS FOR HOSPITALITY AND TRAVEL: Save where there is an abundance of alternative energy resources, operators will continue to depend primarily on oil for their power. This will render them vulnerable to oil price shocks until a major alternative fuel source, such as fusion, becomes available. 55 TRENDS FOR TRAVEL & HOSPITALITY • SUMMER 2008 33 36 33) Growing competition from other energy sources also will help to limit the price of oil. Nuclear power is growing rapidly. In Russia, plans call for construction of twenty-six more nuclear plants by 2030, when 25 percent or more of the nation’s electricity will be nuclear. China plans to build thirty reactors by 2020, quadrupling its number and bringing nuclear energy consumption from 16 billion kWh in 2000 to 142 billion kWh. Even the United States is weighing the construction of new reactors. For transportation, ethanol is the most useful alternative to petroleum. Brazil already gets more than 40 percent of its fuel for cars from ethanol made from sugar cane. Renewable sources such as wind and solar power also are growing rapidly, but they are unlikely ever to make up more than a small fraction of the world’s energy supply, save in areas 50799858/JOE RAEDLE/GETTY IMAGES
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