In the 19th century, whale oil was the first “electricity” — illuminating homes and businesses. As technological innovations provided alternatives, and whale oil prices became volatile, the bottom dropped out of this once massive energy industry. Whalers were shocked to run out of customers before they ran out of whales.
Does the same fate await Big Oil? Amory Lovins of the Rocky Mountain Institute wrote recently that “the unsubsidized wind and solar average price-per-kWh now beats (subsidized) fossil fuel plants by two to three times, closing many plants as simply uneconomical.” What if the biggest challenge to oil companies wasn’t the falling price of oil, but instead vanishing demand? A cautionary tale for oil-dependent economies, such as Canada’s?
Markets are on the right track, the big question is whether governments (Canada?) will join the party and do their part to accelerate the next big energy sector transformation.
As Mr. Lovins puts it, “Paris may mark the crucial shift of the climate conversation from cost, burden, and sacrifice to wealth creation, jobs, and competitive advantage. That recognition of market realities could so simplify and sweeten the politics that any remaining resistance can melt faster than the glaciers.”
In the Kootenays, where we watch glaciers vanish almost daily, one can only hope.