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by cstavish 4222 days ago
I'd like to know your thoughts on today's cheap oil prices-- assuming oil stays around $70-80 a barrel for the next few years, do you see that slowing down solar development/investment? In other words, do people keep their "eyes on the prize" so to speak, or are they dissuaded by temporarily cheap oil prices?
2 comments
diafygi 4222 days ago
It's actually kind of interesting. I think it might be helpful globally for clean energy. Cheap oil means people won't feel as much pain if a carbon tax is put in place to compensate for the externalities of using fossil fuels. So this is an opportunity for political movements in countries to push through a carbon tax now. Then when the price of oil goes back up (i.e. after OPEC has driven out the frackers and hurt Russia sufficiently), the carbon tax will make clean energy more competitive. I personally think that OPEC is shooting themselves in the foot over the long term with this move.
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xnull2guest 4222 days ago
For many of the smaller scale oil extraction companies (in the US), they've actually suspended production because of the cheap prices. Hydraulic Fracturing is a very expensive procedure right now and the low prices are hitting the point where the costs of extraction don't pull enough revenue to get the profits the companies need to survive.

Oil has a sweet spot. Too expensive it can't compete with solar and other green energies. Too cheap and it can't be extracted at a profit.

As green energies push down that ceiling closer to the floor, oil is in for a rough time.

Finally, oil is subject to extreme geopolitical pressures. Two of the current pressures on oil prices are ISIS's selling of captured oil fields at discounts to fund operations and the United States and others encouraging prices to stay low so that funding is as menial as possible. Other countries' geopolitical power comes from control of oil (Russia), or transport (Turkey), or contributes the majority of their wealth (Norway) and so these countries have strong motivations to keep oil dominant.

It should be interesting times.

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