“I rely on oil too much every day!” confesses a commuter in Mumbai, resigned to her dependence on her motorcycle. And what if oil ran out tomorrow? “I’d have to go walking everywhere. I have no other choice!”

"There is no alternative to gasoline and diesel. These are the main transport fuels for everyone,” says S S Sunderajan, Chief Technology Manager at the Mahul oil refinery in Mumbai. “So until we find an alternative means of energy, this will continue to be the main energy giver for the whole of society.”

At the Mahul refinery, crude oil from India’s oil fields, as well as from the Middle East, West Africa and South America is converted into dozens of by-products like gasoline, kerosene and gases that are then turned into thousands of products - from fertilisers to cosmetics, plastics to paints.

Oil is the world’s most important source of energy. It underpins the global economy. Billions of tonnes are used every year in manufacturing and transport and our demand for the black gold just keeps rising.

“Today we eat oil, drink oil, wear oil, furnish our houses with oil and drive vehicles which run on oil,” Dr DM Kale, Executive Director of India’s state-owned oil company ONGC tells The Big Question .

“India consumes 10 million tonnes of fertilizers a year, which helps us produce more than 200 million tonnes of food. If we withdraw the fertilizers, production will go down. Plus all the water and irrigation used in India depend heavily on external sources of energy.”

But this dependence on oil is relatively recent. The history of petroleum stretches back just over a hundred years. Coal was the fossil fuel that drove the industrial revolution - first in Britain and then around the world. Steam power followed. But by the end of the 19th century, oil was king; a position the coming of automobile mass-production would secure.

Across 2004, oil prices have gone up rapidly since January - sparked by uncertainty in the oil market. In the past, oil prices have fluctuated - during the Iran-Iraq war prices reached $35 a barrel (the equivalent of about $70 today). Since then oil prices have been relatively stable and only two years ago it cost $18 a barrel.

But oil consumption is set to keep rising, as China's demand for oil increases. China is now the world’s second largest consumer of oil as the country steps up its drive to industrialise. And India has now overtaken the UK in the size of its oil imports.

“The world is now on edge as far as oil production and demand is concerned,” says Dr Kale. “We are not running out of oil, we will never run out of oil, but slowly and certainly the demand will outstrip supply. As a result the people who are not rich will stop getting oil.”

The biggest consumer of oil is the United States – it uses 840 million gallons of petroleum products a day. Put another way, 5% of the world’s population consumes over a quarter of the world’s daily oil requirement. The US is one of the largest producers of oil, but that domestic oil accounts for less than half its needs. For the rest, the US relies on imports. That is why for American governments, guaranteeing the supply of oil is seen as a ‘security’ issue.

Americans are “hooked” on oil, says Bob Ebel, Director of the Energy Programme at the Centre for Strategic and International Studies in Washington. “The American consumer’s only concern is price and availability. He doesn’t care whether it’s produced domestically or imported from abroad, that’s not his concern. It’s up to politicians to make sure we have this steady reliable flow of oil.”

And so reliant is America on oil from the Middle East that in 1980 President Jimmy Carter declared that, "Any attempt by an outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." The ‘Carter Doctrine’ was applied in the first Gulf War in 1991, following Iraq’s invasion of Kuwait.

“There was really a concern that Saddam Hussein would not allow a free flow of oil,” says Dr Valerie Marcel, from the Royal Institute of International Affairs in London. “It was too much oil for one country to control. They (America) wanted to break the monopoly”

So how much oil is left? The question that has experts divided. Most believe there are enough untapped reserves to last up to 80 years. But that will involve refining extremely dense oil deposits such as pitch lakes. At the moment, it would cost too much to refine these very thick forms of hydrocarbons into the lighter fractions we need for our cars.

OPEC places the world's proven crude oil reserves at around 1,100 billion barrels or enough to meet the global demand for about 45 years, at current production rates. Many experts believe we have already located all the oil there is in the world and it is widely accepted that many major oil reserves, like those of the North Sea, are on the decline.

It is not going to take people by surprise, says Robert Mabro, Director of the Oxford Institute for Energy Studies. “I am not seeing a catastrophe happening overnight. It will be slow, there will be a transition and hopefully with reliance on technology there will be a solution in 30 or 40 years time.”

Some see the future in other forms of hydrocarbons, like gas hydrates, others in hydrogen, a substance that occurs in water and air. We’ll look into these alternatives more closely in the next Big Question: “Can we live without oil?”

This edition of The Big Question was first broadcast on 13th November 2004

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