It has often been assumed that, with the constant, exponential growth of the world’s population and increasing modernization and industrialization of highly populous countries such as China, demand for oil and petroleum products would continue to rise, along with their price.
However, the fuel efficiency of new cars in the U.S. has risen dramatically since 2008, according to a report by Citigroup entitled “Energy 2020: The Revolution Will Not Be Televised” and will continue to rise, meaning demand for gasoline in the U.S. will be greatly reduced, rather than increased, by 2020. Countries like China, India and Mexico are legislating even more dramatic curbs in fuel use by their automobiles. With the fracking revolution causing a massive increase in America’s natural gas output and a resulting collapse in the price of natural gas (likely to be followed by the same in other parts of the world), the price of oil will have to converge toward that of natural gas, as the technology used in producing cars, trucks, buses, and even locomotive engines is now aimed toward the utilization of LNG.
What is more, there has been a very formidable shift towards the use of solar power all over the world, diminishing the demand for oil even more. The Citigroup report states that the price of solar power has reached parity with residential electricity prices in Germany, Italy, Spain, Portugal, Australia and the southwestern United States, with Japan, Korea and the U.K. soon due to join the group. Quite amazingly, approximately 29% of additional electricity capacity in the U.S. in 2013 was solar, with the price per watt dropping from $6 to just $2.59 over the past four years. Once the technology used in solar battery storage succeeds in producing cheaper batteries that last long enough to satisfy the needs of nighttime usage, a “mass exodus from the grid” is predicted, and there are more than 220 projects ongoing in the U.S. regarding energy storage. Interestingly, there is a study at Harvard attempting to develop batteries that use quinones from rhubarb rather than rare metals, while at USC they are working to reduce the cost to 90% below that of lithium-ion batteries.
There is no going back when it comes to world energy use and the dominance of the big petroleum companies; as the article states, the political issues which have propped up the price of oil have only spurred on the shift toward other sources of energy. See the full article at the Telegraph.co.uk.