We need an energy revolution in this country, and it doesn’t look like we’ll get it any time soon. Not to mention an energy policy from the government. The world is desperate for clean energy sources, and real solutions seem far off. Yet big oil price spikes are not only possible but likely. Their effects could be shocking, and the auto industry is on the front line.
Above is a summary of what I’ve been reading over the last weeks about oil and renewables, supply and demand.
One of the interesting facts that emerged is that car buyers in Germany and the United States actually rank fuel economy outside the top ten attributes they consider when buying a car. This is from a valuable McKinsey study (subscription but free) on the likelihood of another oil shock in the next few years, one lasting for years.
To ease the shock, the authors suggest:
Governments would need to raise auto fuel efficiency standards further, and consumers would need to place greater emphasis on fuel economy when they bought new cars. Policy makers in several developing countries would need to abolish fuel subsidies so that consumers felt the real price of oil. Around the world, we’d need to see deeper reductions in the use of oil for heating, power generation, and chemical manufacturing. Some transport by ships and heavy trucks would need to start shifting toward more reliance on natural gas as a fuel.
Well, the chance of any or all of this happening soon is simply nil, in my view, unless people get really scared. We’ll follow up in Part 2 of this story with ways to scare them.
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