“The stone age didn’t end because we ran out of stones, and the oil age won’t end because we run out of oil”
Sheik Yamani once famously said “the stone age didn’t end because we ran out of stones, and the oil age won’t end because we run out of oil”.
Reed Landberg, writing for Bloomberg, describes the key trends that will lead to the end of the oil age, sooner than we thought even a few years ago. Demand growth in the US has disappeared, efficiency of vehicles is up, and new technologies (particularly electric vehicles and fuel cell vehicles) are building momentum quickly. The most important graph from this article is the one I reproduced above, which shows cost reductions in solar photovoltaic modules and lithium ion battery packs. Costs for both technologies are coming down at a furious pace (down more than 20% for each doubling of cumulative production). If the growth in demand for these technologies proceeds at anywhere near the recent historical pace, those learning rates should allow for significant further cost reductions, a virtuous cycle in which everyone except for the oil companies wins.
