Depends who you ask.
According to the Saudis, Oil will be the primary source of energy for many years to come (see the interview with Ali Al-Naimi, the Saudi oil minister, in CBS "60 minutes"). In the segment, the reporter shows the new petroleum facilities being developed in Saudi Arabia. They claim they will find DOUBLE the amount of oil they already have in the near future. It makes you wonder weather we are overreacting to the "end of times" for the oil sources.
In addition to the oil conundrum we are facing a challenge in the renewable energy front, and according to the NY Times here in the US we are not doing too good (read "Energy Goals a Moving Target for States").
A mere 10 to 15% goal of renewable sources of energy is an uphill battle for many states to achieve. According to the article: "Nationwide, the hard numbers provide a sobering counterpoint to the green-energy enthusiasm sweeping Washington".
On the other hand
The US will soon have a new president. The general expectation (based on his own words) is that the "Green Economy" will be a priority. This effort towards renewable energy and clean technologies is one of the tools Mr. Obama proposed as a strategy to overcome the current financial crisis (see Obama’s entire plan at Elections and Greentech, are they related?)
Additionally, the same NY Times, did a whole section on the "Business of Green" in September (featured in one of our entries "NY Times Week-in-review"). I believe they were responding to a trend, therefore being optimistic about the growth of the Green Business.
So which one is it? Are we reading too far into the energy and pollution crisis, or are we in the verge of major changes towards the "Green Wave".
Until next week, SHALOM!
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3 comments:
Hi Sami,
The fact that we can find more oil is perhaps the wrong way to look at this.
Using resources such as oil will have a detrimental impact on the world’s climate as will using any of the fossil fuels such as coal.
Carbon storage technology could be deemed as prolonging the problem, and will have additional cost implications, nuclear power is clean, but the waste is difficult to dispose of, and leaves a legacy for future generations to deal with.
There is a huge resistance to sustainable sources of energy from the major utility companies and they are mainly driven to renewables by financial incentives such as the ROC in the UK.
All the oil producing companies have huge resources, but like any other business are keen to promote their own products, many of the processes are very misleading in their claims about clean technology.
With all this in mind, we need leaders with a clear view of what can be achieved and the experts in place to allow the technologies to be successfully developed and deployed.
All this will take time and money, most of this money will come from the man and woman on the street, so they have to be well informed and educated to the pro’s and con’s.
So the simple answer to are we there yet is no. Much more needs to be done, our world leaders need to make real decisions about climate change and practical ways to assist companies involved in the renewable industry.
Hi Sami. Great blog post. I've been studying oil prices ever since my days at grad school at NYU and long before I got into renewable energy. There's not much mystery in them anymore--supply=demand, with lots of outlier pricing because it takes such a long time to reduce or increase demand in response to price signals.
The more perplexing question is this: why do all greentech investments fluctuate according to the price of oil? There is no rational reason why a drop in oil prices should lead to a drop in the fortunes of the solar industry. It makes no sense at all. It sounds like an incongruity that an investor like yourself could make a lot of money off of.--Sam Jaffe
If you listened clearly to the 60 Minutes program, the Saudis are DEVELOPING an oil field that was discovered over 30 years ago. There simply have not been any new major fields DISCOVERED in over 30 years. This inspite of vastly better methodologies (listen to the Chevron ads) and a 10X increase in price.
Even if the Saudis had all the oil we could ever want, who wants to continue shipping what will be close to $1T/ year out of the country??? Oil will rebound when demand returns as it will, and probably very shortly.
As MOST of the oil producers have passed peak production, SA and other Middle-East producers will have an increasing market share. Were we to be the sole customer of SA, with our own oil diminished, they would have to triple production just to support the USA.
The math is simple. The world normally consumes 30 Billion Barrels of oil per year. If the Saudi claim of 250B BBLs is true, that is enough for about 8 years and then DRY.
The USA has between 21 and 40 Billion barrels of total reserve. With an annual use of 8 Billion barrels you can see how far Drill, Baby, Drill will go.
OIL and solar are intimately linked because the future of almost all transportation is electric. We must invest NOW, and BIG not only to not be dependent, but more importantly, so the rest of the world can buy from US for a change.
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