With oil at $65 will renewables lose steam?
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.
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