What Are Clean Energy & Energy Efficiency Doing To Oil Prices?
At Abu Dhabi Sustainability Week this year, there was a lot of talk about low oil prices and how they may (or may not) be threatening cleantech investments.
One thing that I think was not emphasized enough was how the shaky investment footing of oil might be leading investors to move their money to cleaner forms of energy, which are seeming more and more like safer investments. I keep seeing how cleantech portfolios have been outperforming those that include fossil fuels, and I think that will only increase — I can’t be the only one, and I even wonder if I’m in the minority any more.
Another interesting aspect of the oil price drop is related to the increasing fuel efficiency of transport. In the US in particular, during a panel discussion at a Financial Times—IRENA event, Michael Liebreich highlighted the point that US oil imports have dropped by about 7–8 million barrels a day while its production has only increased by about 3–4 million barrels a day. Efficiency, baby!
He closed with a nice line, “Ask not only what the oil price will do to renewables, but ask also what renewables will do to oil prices.” Nice one.
Here’s the video:
Of course, it’s also worth noting that oil doesn’t typically compete with renewable energy.
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