Rocky Mountain Institute Says The Tide Is Turning Against Oil

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Oil prices seem to fluctuate as often as stock market ticker on Wall Street. Prices at the pump can go up or down a few dollars because the price for a barrel of oil has gone up or down a few hundred dollars. But according to the Rocky Mountain Institute (RMI), the recent drop in crude prices could be signaling a shift towards other, more renewable energy sources.

 As vital to the economy as oil has become (it's used in everything from the cars we drive, to the clothes we wear, to the non-stick pans we cook with), Amory Lovins of the RMI says that history has shown demand can vanish in an instant; even for what appear to be the most vital resources.

"In the 1850s, whalers—America’s fifth-largest industry—were astounded to run out of customers before they ran out of whales," Lovins states in his paper As Oil Prices Gyrate, Underlying Trends Are Shifting To Oil's Disadvantage. The reason for this sudden shift was because people had begun to use oil and gas as fuel sources, rather than whale blubber.

And so it seems that the same thing is happening again today. Gas is cheap because there is a surplus of crude oil from drilling and fracking, and there isn't as much demand for it. Supply and Demand is definitely Economics 101 material. 

But while hybrid sales are down because gas is under $2 per gallon, there is still a growing market for alternative fuels, solar, and wind power. If we listen to the RMI and Lovins, we might just be seeing his whaling scenario playing out in front of us. People believe that they have found something better and more efficient, so the conventional source of fuel is starting to go to the wayside.

Only time will tell if this is truly the case.

 

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