It often bemuses me when environmentalists speak of ‘peak oil’ as the mythical time when our planetary oil reserves will suddenly vanish.
It does this for two reasons. Firstly, the oil reserves ‘available’ vary wildly depending on the current price of oil. For example, the cost of extracting oil from the Athabasca Oil Sands is between $36-40 dollars per barrel for a new operation. Given the historical price of oil, (as seen here, for example; note this does not show the current rise to almost $100 a barrel) one can see that a new operation was only economically viable in the period between about 1973-1985, and of course now, from about 2003 to present.
As the price of oil continues to increase rapidly in a process that shows no immediate signs of slowing or stopping, the economic viability of recovering hydrocarbons through other methods will increase as well; and more oil will become 'unlocked'.Secondly, consider- what is oil? In its most basic form, oil is a hydrocarbon. A hydrocarbon, of course, is an organic molecule consisting solely of varying amounts of, you guessed it, hydrogen and carbon. Among other things, these two elements are some of the most common in the universe. By mass, the proportion of elements in the galaxy (in parts per million) is 739,000 hydrogen and 4,600 carbon. By mass, approximately 11% of Earth's oceans consist of hydrogen- or about 1.48*10^17 metric tonnes- 148 quadrillion metric tonnes. Carbon appears in a multitude of forms- not only in enormous quantity in the atmosphere as carbon dioxide, but also dissolved in water, in biological entities, and of course in various carbonates (and hydrocarbons) in the Earth's surface.
Consider this- we are concerned about running out of the first and fourth most abundant resources in the universe; a concern that when taken in this light seems somewhat silly.
The difficulty, of course, is that these reserves of hydrogen and carbon are not stored in reserves that are easily converted to hydrocarbons. But note that proviso- easily. As early as the 1920s, Germany, poor in oil, but rich in coal (itself a great source of carbon) had discovered a process (the Fischer-Tropsch process) by which it was possible to create synthetic liquid fuels from other substances.
More importantly, consider global warming- the primary culprit of which, we are told, is carbon dioxide. In fact, many organizations and governments are considering carbon capture as a way to slow or reverse global warming.
It seems inherently obvious, therefore, that the process by which we generate energy, (Fuel+Oxygen -> Heat+Water+Carbon Dioxide, or in other words, Hydrogen+Carbon+Oxygen -> Heat+Hydrogen+Oxygen+Carbon) can be reversed to generate liquid fuels from the byproducts- water and carbon dioxide.
Of course, thermodynamics must take its cut; the energy retrieved from the combustion reaction is extracted primarily in the form of heat, and sufficient energy must be injected into the constituent parts to recreate a feasible liquid fuel. But we have had a free lunch with all the pre-created liquid fuels so far; and power is not, in the grand scheme of things, something the universe lacks for, especially when liquid fuels are used primarily in mobile applications where larger, power-positive generation techniques may be unusable (solar, wind, nuclear; imagine your car covered with solar panels, a nuclear power plant in the trunk, and a large wind turbine on the roof.) However, this is in theory very similar to what proponents of 'hydrogen-powered cars' are trying to accomplish- creation of a new liquid fuel source. In fact, what they really should be doing is figuring out how to make the processes we can use to make more of our current liquid fuel source more efficient.
That is not to say, however, that our current carbon-based economy isn't full of holes- it is. You see, to generate these liquid fuels, power would be required- power that is currently being extracted in great amounts from hydrocarbon fuels, which is obviously a losing prospect when one attempts to use it to create hydrocarbon fuels. For an effective hydrocarbon creation system to come into effect, surface-based power stations would need to convert almost entirely or entirely to a different mechanism- both hydropower and nuclear power are of course key candidates. Fusion, if it ever stops being 'just around the corner' and steps into the main stream (I'm not sure whether to cheer for Bussard or ITER in this respect) will play a key role- both environmentally and technologically.