Beer is really the answer my brother... or more precisely, Ethanol. It can be made from almost anything, and if we insist on keeping combustion type engines then Eth. is the only option I know of.
I have also been following Fuel cell, and hydro magnetic engines for some time, and the bottom line is they are hands down the winner. Problem is the BIG OIL barons have that Tech wrapped up. They will never release these engines or the patents. why? Because as you pointed out... $5,000.00 a barrel.
There is one more problem no-one seems to be aware of. Oil in the ground has a purpose. It "acts" like Tire Balance Fluid inside the earth. Our very existence depends on it.
Oil also has a specific weight, and viscosity. The actions it performs is dependent on these attributes. For decades now the BIG OIL companies have been aware of this so they are pumping water into depleting wells. Not so much for the fluid dynamic aspect but to "float" the remaining oil out of it's deepest hiding places.
Once again I am greatly simplifying the whole scenario but the fact is the planet is not going to survive this attack for much longer. The proof of this comes in the form of more frequent/severe earth quakes, faster movements of tectonic plates, and more active volcanoes then any other point in history. Oil is/was the natural buffer that kept order as it were, and GREED has determined the real fate of our planet. People need jets/big villas/200 foot yachts/pounds of cocaine more than our children need a home.
f***ing people make me sick!
Oil comes from the uppermost layers of the earth.
The earth is about 12.700 km in diameter and we've only drilled about 15 kilometers deep. About 0,11 %.
Removing oil has no impact on the stability of the earth. Only a little bit of the stability of the piece of land right above the oil, since removing oil will create a cavity and this is solved to an acceptable level by injecting water, as you said.
Anyway, you are totally right when it comes down to ethanol being the future. It is CO2 neutral, burns quicker, has higher octane ratio and requires more injected to give a stoich relationship. This allows for a cooler air/fuel mixture that can be compressed more and requires less ignition advance. This means more power without damaging the enviroment!
The latest thing i heard is that a danish company has found a way to make bioethanol, biogas, electricity and heat 25% more efficient than before, using wate products from grain production. The bioethanol will have a price about 1$ per liter. Half what normal gasoline is here now.
They need 450.000.000 dollars and they just got 45.500.000 dollars from EU to make this. About a third of what they needed in support, so if they can find the rest 90.000.000 dollars, they can have the first facility up and running in two years. If it proves to be a good way to do it and noone has come up with an even more efficient way before that, it might spread to other countries too.
The proposed facility uses 300.000 tons of straw to make 73.000.000 liters of bioethanol, 99 million cubicmeters biogas and loads of electricity and heat to be used by surrounding citizens.