That was the question posed to me by a smart man yesterday. It is a valid point given the lack of commitment to all the energy independence rhetoric during the early 1970’s. America’s initiatives to reduce its dependency on foreign oil made great sense, yet as the price of oil plunged so went the country’s resolve to develop electric vehicles and alternative fuel sources. Call me overly optimistic, but this time around I feel we might be able to maintain our “eye on the prize” and continue to invest in renewable energy because of environmental and geo-political pressures and despite economic pressure and uncertainty.
With gas prices looming around $5/gallon the United States saw a drop in distances driven. There was renewed pressure to resuscitate the efforts surrounding the electric car; and politicians on both sides of the aisle pushed for alternatives because it made financial, environmental and geopolitical sense. Yet, history may well be destined to repeat itself. The price of oil has fallen hard for a number of reasons, including the general economic uncertainty, and automobile drivers have almost obsequiously demonstrated the elasticity of demand and begun to drive again.
What happens next? Investing in replacement technologies becomes less financially compelling as the price of oil drops. Will the push for next generation biofuels falter? I have some faith that as consumers and voters we can learn from history and maintain the foresight to realize that regardless of the price of oil, we need to develop alternatives due to environmental necessity and economic stability.
It is no secret that the oil markets are heavily manipulated by suppliers whose interests are not always aligned with their consumers. I feel that as consumers and voters we might begin to take some responsibility for the volatility in the price of oil in accordance with the adage “Trick me once, shame on you; trick me twice, shame on me.”
If empirically myopic consumers and legislators cannot be persuaded through history lessons and fear, then perhaps the future of renewables will come from investors and companies that want to ensure their existence long after oil reserves have been squandered.
Energy investment follows prices. $65 oil means producers will delay investments necessary to offset depletion. The rebound in price will be that much more dramatic and we will again see investors scrambling back to alternatives. My fear is that increased investment will come too late with high energy prices further weakening the global economy and increasing our energy debt. With investment capital difficult to come by, the little that is available will likely be put to fossil production before alternatives, doing little to solve the underlying problem. Unfortunately consumers and legislators will not ultimately wake up and face reality until prices have risen to the crisis levels.
Yes, I agree, but everyone always talks about Peak Oil, never mentioning that all of our other “cheap” alternatives have already passed Peak.
I invite readers to examine the skyrocketing cost of extraction, and declining ore quality of coal and uranium. Natural gas should also start to feel the pinch soon.
This energy price decrease scares the heck out of me. First of all, with all the money-creation the Federal Reserve has done lately, the dollar should not be this strong, and won’t be for long.
It’s imminent fall will coincide with reduced fossil fuel capacity (the credit crunch has killed financing for multitudes of future oil platforms). With a weaker dollar, we’ll get back into the weaker dollar causing oil-price rises causing larger balance-of-trade deficits causing weaker dollar spiral again.
An energy price index newsletter I recently read quoted oil extraction costs for various countries as follows:
Saudi Arabia: $ 55
Russia: $ 70
Venezuela: $ 90
Do those figures seem accurate?
If so, we should see some countries ramping down production in order to stop the bleeding.
It shouldn’t be long before we feel that supply impact, but it will be temporarily blunted while our dollar is artificially strong.
Sam, I agree with your last sentence. The problem is that these supply / demand relationships are exponential, so by the time we sense trouble, it’s already too late. We should have continued on the energy independence track we started during the Carter administration. Brazil used that crisis to make changes, but we turned back to our old ways. Now it’s time to pay the piper.
What a mess!
Maybe we should stop waiting for our favorite candidate to divulge their national energy policy proposals and do something about it on the local level. On a VERY local level.
It’s time to prepare your homes and communities to become locally energy independent. Invest now in high efficiency air conditioning and heating equipment, supplement with rooftop solar water heaters (not that expensive, especially after the tax credits), and if you can afford it, roof-integrated solar electric systems. Lease-to-own financing costs less per month than what you will be saving, and yes, financing is still available!
See our website below for ways in which we can help you become personally energy independent in a painless manner.
Maryland Green Power Co.
There is very big differences from the 70’s compared today ,its about sustainability,we are also facing the era of peak oil.
By Barrie Harrop Entrepreneur-Retail Development-Deal Making.
I believe the pain the American public has experienced this month will have a lasting effect on our national dedication to clean energy and sustainable resources. While the price of oil has dropped dramatically in the past few weeks, none of us should become complacent that it will remain at these low levels for any extended period of time.
Lesson learned is that the price of oil is tied, in part, to demand. As a nation, we control that demand and have learned personally the effects of ignoring our consumption. Energy conservation and our interest in renewable resources has become a permanent mindset of our collective culture.
By Larry DeVincenzi Brand Strategist at SmartBrand llc
I agree with your point – and it think that is the crux of it. That is the fundamental difference between the 70’s and now.. That and the devastation caused by continuing to exploit marginally profitable sources that become ‘feasible’ at $95/barrel.
I hope you are right, but as the comments on the blog article show – we are not free and clear, the easy way out at 65 is still good enough for the myopic masses. Would there be a way to economically and politically support a progressive tax that raised a carbon/fossil fuel tax that kept the price of oil artificially high and subsidized Alternatives?
To me, this is all a marketing scheme by big oil…it’s almost humorous to hear friends and colleagues comment on how great it is that we are at $2.30 per gallon now…so we’ve reached our new “low plateau”, so to speak. They raise the price to four dollars, then manipulate the market to be comforable with $2.30. Then it will rise to $6.00, and the industry will make us appreciate “those days when gas was $4.00/gallon”. It’s an ongoing cycle that can only be stopped by the cleantech industry forging forward.
Today, it’s bigger than oil and the price of gas. It’s vital to our economy, to re-igniting the working class, to securing our nation. This position needs to remain on the forefront of the cleantech innovators’ minds…our future depends on it.
I think a shift is required in our thinking and approach.We cant be watching the price of oil in order to decide whether it is financially viable to invest in renewable s. Investment in renewable s is slowly but surely becoming a profitable business apart from all the other obvious advantages.
Sadly the price of oil drives monumental shifts in investment dollars with respect to Alternative Energy R&D. This is a build up of decades of politically misguided decision making strategies. With a new President in office soon and a stated vision of change we should all see the first real effort towards renewable and sustainable energy in the years ahead.
The price of oil is not even driven by true supply to begin with. This is an artificially driven spot pricing based on greed and opportunity by a handful of companies who barely visit the actual oil fields. Those days of manipulation and profits for the few are under much tighter watch. We on the internet side of the coin need to expose and publish our needs and desires often.
Comments are closed.