Let’s not panic about oil prices

Every time the price of oil drops dramatically people get into a tizzy. They think it will hurt the economy. They shouldn’t. Environmentalists think it will threaten the growth of alternative energy. They shouldn’t worry either.

crude price hist 5 yrs 333

First, for my fellow oil-loving Canadians who think they have all kinds of problems; well you do, but the oil price drop isn’t really serious. If you look at this chart you can see that the price of oil has grown steadily over the past 5 years. Sure it’s had its ups and downs -like in 2011- when it went for a big swing. That’s probably all that’s happening right now.

Second for my fellow environmentalists, we worry when the oil price goes up because it makes it more profitable for oil people, who seem to care more about profits than public safety and environmental damage. We also worry when the oil price goes down because we think it threatens the current march to cost parity (see map) that is taking place worldwide for solar.

WORLDWIDEPRICE PARITY 444

Similar maps can be drawn now for wind, geothermal and other clean technologies by the way; so quit worrying. The game is basically ending for oil. It’s like participating in a game of monopoly and knowing you just don’t have a way to win, but it would be rude to stop playing.

So the oil people are quietly investing in wind power in Texas, trying to figure a way out of unprofitable fracking, and hiring fewer lobbyists to try to attack climate science. The USA, UK, Canada and Australia are the only four countries left in the world where the media is gullible enough to take these lobbyists seriously anyway. That will completely end soon.

Environmentalists should look at the big picture. When oil goes way up or way down it demonstrates to homeowners and businesses how volatile and unpredictable oil is and how conservation technologies and clean energy technologies are starting to look pretty good by comparison.

This whole mythology about wind and solar being somehow less reliable because they are a little intermittent is now being reviewed by serious players in less inflamed tones, with new smart grid technologies and new electricity storage solutions now helping to dispel one of the few arguments oil and coal people have left.

Nonetheless, having said all of this about the arguments for clean tech, the transformation challenge is huge. Clean tech investment is easily kicking butt everywhere and growth of solar and other renewables is staggering compared with past growth; but it is not staggering when measured against the world scenario. Non-hydro renewables are well under 10% of the worldwide energy scene. So we have a long way to go. But at least the argument is over.

All that’s left to do is to worry about the volatility of oil and start changing all our systems to clean, reliable renewables.