Energy companies are uncertain about how much oil remains, yet have largely abandoned research into renewables. Photograph: Getty

There is a perverse circular logic to George Osborne using tax revenues from the oil companies to subsidise our national car habit. It may worsen long-term energy security, obstruct the shift to a low-carbon economy and leave us vulnerable to uncontrollable global events, but it makes short-term political sense to the government.

Just how big a gamble Osborne is making becomes clear when you look at how the oil companies themselves see the future.

Looking into its crystal ball of energy scenarios, Shell breaks down where it thinks we’ve got to, and where we might be going in a new report called Signals & Signposts. It warns that we face an upcoming “zone of uncertainty” – a frank admission that, really, it hasn’t a clue what is going to happen. Then it labels a large block of time between now and 2050 as a “zone of extraordinary opportunity or misery” (Shell’s involvement in the Niger delta demonstrates that the two are not necessarily mutually exclusive).

Using optimistic assumptions, the company nevertheless sees a gap emerging by 2050 between “business-as-usual-supply” and “business-as-usual-demand”, a gap so large that it is equal to the size of the whole industry in the year 2000.

The US mission in Saudi Arabia, a country long relied on to increase production when times are hard, recently questioned in a cable made available by WikiLeaks, “whether they any longer have the power to drive [oil] prices down for a prolonged period”. Such revelations make the markets jittery. Events like those in Libya make them jump. And the industry is already embroiled in problems elsewhere.

For example, it can no longer safely rely for slack production on the potential of more marginal fields, such as the Macondo prospect in the Gulf of Mexico, now famous as the scene of BP’s Deepwater Horizon debacle.

US giant Chevron is paying for big display adverts that declare: “Oil companies should support the communities they’re part of.” But it’s unlikely that they’ll do so by complying with the courts in Ecuador who recently fined the company £5bn, half its annual profit, for polluting the communities that “they’re part of”. Unhappy BP sees output falling in key countries like the US, Russia and the UK, and is now caught up with dark machinations in Russia that smack of the old days of the “great game”.

The whole industry is faced with the odd prospect that the more successfully they conduct their core business, of finding and pumping oil, the more quickly they will do themselves out of a job. A comparison of numerous forecasts by Steve Sorrell and colleagues, published in the journal Energy Policy, revealed a list of 56 oil-producing countries already apparently past their point of peak production. They concluded that any forecast putting the global peak and decline of oil production more than a couple of decades away was based on assumptions that were “at best optimistic and at worst implausible”. Some thought it had already happened, more still that it would occur in the next five years. When markets decide that the moment has come, the foundations of the economy could change as fast as a Middle Eastern regime.

But within the industry there remains the same kind of blithe confidence in its ability to continue as before, propping up our economy and lifestyles, that governments just a few years ago placed in the banking system.

The cost of oil imports as a share of GDP for the US, Europe and Japan is back around the level it was in 2008, at between 2-3%, roughly double the average for the past four decades. That doesn’t sound much, but it’s misleading. Because, in effect, 100% of the productive activities that comprise GDP depend on energy.

The Shell report spoke of “volatile transition”, and of economic outlooks that range from “severe-yet-sharp” to “deeper-and-longer” and the marvellously catchy, if dated, “Depression 2.0”.

With so much insight, it is remarkable then, that Shell, like BP, has reversed at speed out of renewable energy. Shell dropped investment in wind, solar and hydrogen energy in 2009, the same year BP closed the London HQ of BP Alternative Energy, along with its solar plants in the US and Spain.

Fatih Birrol, chief economist at the International Energy Agency, says we have moved beyond Shell’s “uncertainty” into the “danger zone” for the global economy.

It’s been tempting to speculate that Britain is returning to the 1970s. We’re teetering around recession, there’s upheaval in the Middle East and concern about the rising price of oil is spilling over from the cost of filling a petrol tank to filling a fridge with food.

But if problems with production, politics and price combine, the danger is that this may be less a repeat of Britain in the 1970s, and more like Cuba in the 1990s when it suddenly lost access to cheap cold war oil.

On the bright side, almost overnight, Cuba took to urban organic farming, walking, cycling, mending, repairing and reusing what it already had. Cubans might not have chosen to be so, but they became the modern age’s first previously addicted explorers of a world beyond oil, and they found themselves much healthier and with some of the best mechanics in the world. The harder we cling to the comfort of oil, the sooner we might not have that choice either.

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