"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.

The share of world energy provided by renewables such as hydro and wind power was 5.5 percent in 2001, only slightly higher than 4.6 percent in 1970, the latest IEA figures show. In the past decade global energy research spending has shown little growth.

"The decreasing share of public funding for energy R&D allocated to renewable energy appears to be inconsistent with presumed political intentions in many IEA countries to increase the share of renewables," the West's energy watchdog said in a recent study.

Growth in renewables has varied widely. In Norway they made up 45 percent of its energy sources by 2001, compared to 4.4 percent in the U.S and 3.1 percent in Japan, according to the IEA. In the Czech Republic they grew rapidly by over 15 percent in the 1990s, though remained just 1.5 percent of its energy sources.

CLIMATE CHANGE DRIVER

Analysts say environmental concerns are likely to act as a bigger driver of energy investment than high fossil fuel costs. European Union countries are increasingly looking at wind and nuclear power, given commitments to reduce greenhouse gas emissions under the United Nations Kyoto Protocol on climate change.

But experts say much government research spending is still focused on nuclear fission and hydrogen fuel cells, which could both provide electricity without harmful emissions but remain years away from commercial viability.

"In terms of R&D, for things that would be really useful, such as marine power, my impression is that very little is government money," said Steve Sawyer, climate policy director of Greenpeace. "A guaranteed power price is the key thing," he said.

"Where most OECD countries get hurt (by high oil) is on liquid transportation fuels, but the most viable technology is on the electricity side," Sawyer said.

Biodiesel made from vegetable oils or ethanol is seen as having the best prospects in economies reliant on imported oil, but green fuels remain some 50 percent more expensive than petrol. Oil companies and vehicle manufacturers are also researching fuel cells, though costs to produce and store liquid hydrogen are high.

Despite record profits from surging crude prices, oil majors with investments in renewables such as BP and Shell are not boosting funds for research or oil exploration, preferring instead to buy back shares or pay dividends.

In any case, analysts say public funding is the key to growth in renewables.

"In all cases, the advancement of renewables has been spurred by strong government policies designed to nurture nascent energy industries and to create demand for these technologies, often in markets dominated by mature, heavily subsidised fossil fuel and nuclear power," said Washington-based research group Worldwatch Institute in a recent report.

GOVERNMENT MIND-SET