Will oil industry be squeezed from all sides?
Recently, Lloyd posted about a Bloomberg report suggesting electric cars may cause an oil crash much sooner than we think. What's interesting to me, however, is that this scenario was based purely on the amount of electric car sales it would take to displace oil demand and send prices plummeting.
But electric cars are by no means the only way that oil demand is being squeezed.
In London, driving is down by half while cycling has tripled. In Oslo, they're banning cars and building cycling superhighways. And in Louisville, Kentucky they're embracing the electric bus. Every city I visit anywhere appears to be building downtown lofts and nice, walkable neighborhoods. Cargo bike deliveries are "taking over" UK cities. And there are countless other ways that our relationship to the gas-burning car is at very least changing, if not breaking up entirely.
True, many of these trends are currently nascent. And yes, oil demand may well rise in cities and countries that have not yet become dependent on the car. But with cities from Beijing to Delhi grappling with the health impacts of excess car use, it seems likely that here too we'll begin to see efforts to chart a different path. As oil prices languish, even oil-producing nations are getting in on the fun: cutting subsidies and curbing consumption so they can save more of their production for export. In doing so, they are hastening the inevitable transition to a low carbon economy.
I suspect that sooner than any of us may imagine, the future of never-ending growth in oil demand will look like a strangely antiquated concept.