LONDON - "Investment in renewables is unlikely to be spurred by this year's record rally on oil futures, as only longer-term high prices and stable revenues for new projects will force an energy shift, experts say.
Oil futures in New York shot to record highs of nearly $50 a barrel this month, creating higher costs for energy-importing nations and leading to fears of global economic damage, before prices slipped to under $42 this week.
"Industry is going to need more bad news on oil prices before switching to renewables," said Andrew Oswald, economics professor at Warwick University. "Spikes won't do it as they don't change people's long-term outlook - you'd need to see prices running at $50-$60 a barrel for over a year."
The oil price shocks of the 1970s spurred governments' research in alternative forms of energy, but the drive to cut dependence on fossil fuels faded in the 1980s as oil became cheap once more. In real terms current prices are only half the level for Arabian crude hit in 1980, when the Iran-Iraq war started. Industrialised nations' spending on energy research and development followed oil's curve, peaking in 1981 at $16 billion but dropping to $9 billion by 1987, according to the International Energy Agency."
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