Has our crude awakening begun, at last? It's not just the pelicans of Louisiana that are flapping and flailing in an oil slick – it's all of us. We live permanently doused in petrol. Every time we move further than our feet can carry us, or eat food we didn't grow, or go shopping, we burn more barrels. Petrol pours off each of us like an invisible sweat. The 20th century was propelled into the stratosphere on a great gushing geyser of oil, and nobody wanted to ask where it was coming from, or what it would cost us.

But in this decade, the true costs of oil have begun to finally distract our gaze from the speed-dial. They now silently dominate almost every long-term question we face.

Extracting oil from the ground has always been disastrous for the people who live nearby. The only thing that is unusual about this morphing of 'Drill, Baby, Drill' into 'Spill, Baby, Spill' is that, this time, the world noticed the victims. To pluck one random example, in Ecuador the petrol companies have to pump water into the Amazonian oil fields in order to extract it. This leaves behind a toxic soup of mercury, benzene and chromium 6. For decades, it was simply pumped into the local rivers – causing an epidemic of cancers and severely deformed babies. A US court calculated the liabilities for destroying so many lives could total $27bn. Who has heard of it?

Big Oil is occasionally, fleetingly, honest about how it works. Sadad al-Husseini was vice-president for exploration and production at Saudi Aramco, and in an interview for the book Crude World: The Violent Twilight of Oil by Peter Maass, he said of the industry: "If you have an offshore platform that is beyond the boundaries of a certain country and you can dump chemicals into the sea, you do. If you have to abandon a facility that is a pollutant, you abandon it without cleaning it up. If you've hired people and you can work them in unhealthy environments where you've got sulphur dioxide, you do it. All these are ways in which you say, it's not my problem. It's not my cost."

This will only metastasise from here on in, because we have already burned up all the easy-to-access oil. The sources that remain are in hard-to-reach places: far beneath the oceans, or the Arctic, or beneath conflict zones, where accidents are more likely.

But it is now clear the trashing of local environments was only a taster: when it burns, oil spills so many warming gases into the atmosphere that it radically alters the climate. The Arctic just hit its lowest level of sea ice for this time of year since records began, and Nasa says 2010 could be the hottest year on record.

The people who say we shouldn't worry about global warming because we'll find a way to adapt should look again at the Gulf of Mexico. The most powerful country on earth can't stop a single leaking pipe. How will anyone deal with rapidly rising sea levels, the drying up of agricultural land, and super-charged hurricanes?

Oil fever has been driving the other great stories of this century. The demand for petrol is massively increasing, just as supply gets harder to meet – so we will fight for what remains. The invasion of Iraq, which has caused a million deaths and created a further army of jihadists, was a down payment on this dystopia. It also leads our governments to support some of the world's worst dictators in return for easy access: when we pay the Saudi dictatorship, they in turn use the cash to whip women who dare to sit behind the wheel of a car and to promote vile fundamentalist hatred of us.

As our supply becomes more squeezed, we will become even more like junkies who are prepared to suck up to any dealer or rob anyone to get our next fix. In the film Three Days of the Condor, Robert Redford says free people will never back wars for oil. His CIA boss replies: "Ask 'em when they're running out. Ask 'em when there's no heat in their homes and they're cold. Ask 'em when their engines stop. You wanna know something? They won't want us to ask 'em. They'll just want us to get it for 'em."

But it doesn't have to be this way. We can stop this SUV. It wouldn't even be that hard. The technologies exist to replace oil now. For example, if we lined just 0.3% of the Sahara with solar technology, it would meet all of Europe's energy needs indefinitely. There are companies raring to go. Yes, it's expensive, but we are already spending that money on making the dirtiest fuels cheaper. Oil Change International has shown that $250-$400bn is currently spent every year subsidising the use of fossil fuels, while renewable energy sources get less than $12bn. Switch the money and you're almost there – and you have a massive jobs programme thrown in for free.

We will have to make this switch in the end, because the oil will run out. The only question is – do we do it now, skipping all the wars and all the warming, or do we wait to do it on a trashed and unravelling globe?

Una Mullally is on leave