Multiple Trends Turning Slowly Against Oil, Says Rocky Mountain Institute

The cost of a barrel of oil is now just a fraction of what it was several years ago, and fuel prices have mostly fallen across the globe as a result.

Oil prices rise and fall, but most industry analysts suggest that the emergence of North American production has loosened OPEC's ability to set prices unilaterally.

Still, we hear less about the supposed phenomenon of "Peak Oil" than we did a few years ago.

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And while energy investors have severely punished coal-company stocks, on widespread worries that much of their in-ground assets will never be mined, oil today remains a vital and necessary part of the global economy.

But a provocative new article by Amory Lovins, who heads the futurist Rocky Mountain Institute, suggests that economic forces may slowly be turning against the long-term prospects for oil's role as the dominant fuel for vehicles--and those of natural gas as the preferred fuel for electric generation.

The argument is that with new renewable sources continuing to fall in price even as installations of many kinds soar globally, natural gas is becoming uncompetitive--even with a price on its carbon emissions.

The article is worth reading in full, and can be found here. We urge a full reading, so we're not going to recapitulate its points in this piece.

And it requires readers to consider a longer time horizon than the short-term, quarterly-driven analyses favored by financial commentary.

It's not about gas prices for your next holiday road trip, but the arc of energy production over your lifetime (and perhaps beyond).

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We ran the piece past our occasional source in the oil and gas industry, who's worked in the field for 30 years now--and usually provides some realpolitik to our often optimistic futurism.

The responses to the article included the following points, among others: