The forever fuel. Rory Spowers on an energy source that could turn the oil industry into a dinosaur

The Hydrogen Economy: the creation of the worldwide energy web and the redistribution of power on ea

One of the most revealing and topical statistics that Jeremy Rifkin presents in his new book is the reserve-to-production ratio (R/P) for oil reserves around the world. This ratio estimates the number of years that known oil reserves in a particular country will last at current production rates. In the US, the R/P is 10:1. In Kuwait, number two in the list, the figure leaps to 116:1. However, in Iraq, at the top of the list, the ratio leaps by a factor of nearly five, to a staggering 526:1 - that means 526 years of oil at current production rates. Meanwhile, as the G7 nations start carving up the Iraqi oilfields for their domestic markets, the notion that this impending war is driven by a thirst for oil is dismissed as a "conspiracy theory".

In the first part of this somewhat dry but illuminating book, Rifkin challenges the oil industry's assertion that the lifeblood of the global economy is in plentiful supply, quoting several eminent geologists who predict that global oil production will peak as early as 2003 - and no later than 2009. Using the Hubbert bell curve methodology, first devised by a geophysicist working for Shell, Rifkin presents a powerful case for suggesting that we will soon be past the peak and sliding down the curve. With only 5 per cent of the world's population, the US currently uses 26 per cent of the world's oil and generates about 30 per cent of global carbon dioxide emissions. If China were to use the same amount of oil per capita, it would need to consume 81 million barrels a day, ten million more than total global production in 1997. With China's total fossil fuel demands projected to eclipse those of the US within ten years, the scrabble for global fossil fuel reserves is very real indeed. To maintain that the strategic build-up of US military operations in the Middle East and central Asia is purely a war against terrorism, and dismiss the demand for fossil fuel reserves as no more than a "conspiracy theory", is naive.

Using the basic laws of thermodynamics, and the Roman empire as an example, Rifkin highlights the fundamental role that energy sources have played in the rise or fall of great civilisations. Rifkin maintains, contrary to what many believe about the collapse of Rome, that the root cause of its decline was not so much the decadence and corruption of its leaders but the exhaustion of its agricultural base through overgrazing, loss of soil fertility, and diminishing yields.

In addition to the threat posed by the rise of Islamic fundamentalism within most of the Opec countries, Rifkin reminds us of just how dependent on oil we have become in every aspect of our lives. When we think of oil shortages, we usually imagine long queues at the petrol station, ignoring the reality that everything from turning on the kettle to taking an aspirin is inextricably linked to the fossil fuel industry. The pharmaceutical industry is built on by-products from the oil industry; most of our electricity is generated by burning fossil fuels; our food is now made from oil, as well as soil and sunlight, because the petrochemical industry provides the pesticides and fertilisers that industrial farming monocultures are addicted to; and the global food system is entirely dependent on oil for transport - London needs two supertankers a week just to keep going. Various studies have shown that, should these fragile supply lines be disrupted, urban populations could be starving within a matter of days.

Ultimately, Rifkin proposes that the future of the global economy, and civilisation as we know it, will depend on how successfully we make the transition from a fossil fuel economy to one that is driven by the fuel of the future, the most abundant element in the universe - hydrogen. Although he is not guilty of making the classic mistake (he remembers that hydrogen is an "energy carrier" rather than a primary source), it would be easy to misinterpret his words when he refers to it as the "forever fuel". In the same way that the electric car is not necessarily a solution to the emissions problem, as the electricity still has to be generated by some means, hydrogen production still requires electricity at source. If this electricity is generated by renewable technologies with zero emissions, such as wind, solar or the Icelandic option of geothermal power, then we really will enter a new energy era. If however, the primary source continues to be fossil fuels, the problem of pollution will not be overcome. It may be more localised, but it will still be there.

Perhaps the most exciting prospect of the hydrogen economy, and the most challenging for the existing energy corporations, is what Rifkin calls the Worldwide Energy Web, a decentralised and democratised energy industry built on renewable energy technologies and hydrogen fuel cells. Using the explosion of information technology as a parallel, he explores the possibilities that will unfold when energy flows in two directions within networks, rather than from the top down, as in centralised hierarchical structures. When our hydrogen fuel-cell cars can generate energy when parked at home, or at the office, and sell it back to the national grid, an entirely new energy system will have emerged, making the panic for diminishing and polluting fossil fuels irrelevant, thus defusing the potential for conflict. Rifkin calls this process "re-globalisation from the bottom up", and it certainly seems like an attractive idea. Whether or not the oil industry is prepared to co-operate in this process, or follow the evolutionary path of the dinosaurs, remains to be seen.

Rory Spowers is the author of Rising Tides (Canongate)