Written by Miranda Marquit
Photo:Gonzalo Barrientos, Creative Commons, Flickr
What will we do now?
As the 21st Century moves toward the close of its first decade, we continue to look for signs that the world has reached its peak oil production. And the signs are appearing. Significant new oil finds are coming few and far between and we continue to get excited about oil discoveries like the recent one in Brazil. Indeed, the Brazilian oil discovery is generating a lot of excitement, despite the fact that it is in deep water and will be very hard -- and very expensive -- to get to.
As the Wall Street Journal points out, even with Saudi Arabia getting ready to open a new oil field, there isn't a lot of optimism for cheap, plentiful oil:
Even in Saudi Arabia, home to more than a quarter of the world's known recoverable reserves, the age of cheap and easily pumped oil is over. So what does that mean for Big Oil? And what does that mean for us?
Well, Wednesday morning Exxon (XOM) is down, while its counterparts that are more visible about investing in alternative energy are up. Chevron (CVX), BP (BP) and Statoil (STO) are all up on the stock market. Does this mean that companies that are perceived as doing more in terms of diversifying their energy investments are being rewarded? That probably isn't the real answer, but it does give one food for thought. After all, it does seem that renewable energy investments gain traction as oil prices rise (First Solar -- FSLR -- is nearing $300 a share).
Oil prices aren't coming down any time soon. With China and India threatening to overtake the US in energy consumption in a few short years, and with new, large oil reserves coming fewer and farther between, there is no reason for oil prices to come down. Indeed, at this point the record oil prices may be more a reflection of future expectations than today's supply realities.
So, for us, that means that now is the time to start moving away from oil. We're already seeing that it is no longer the most abundant -- or the cheapest -- source of energy available to us.
Disclosure: I do not own stock in Big Oil companies.
Photo:lorkatj, Creative Commons, Flickr