As Amory Lovins has said, the US is the Saudi Arabia of oil demand. We can cut our consumption faster than OPEC can pull oil off the market. The speed of this drop in demand has outpaced OPEC’s ability to respond.
The IEA has already forecast that all oil demand growth between now and 2030 will come from non-OECD countries [slide 4, pdf]. I haven’t seen anything in their report that expected anything like this. When you combine this with the prospects of a serious decline in Chinese economic growth, you have a scenario where oil demand could absolutely crash.
During such a scenario, by the way, would be the best time for a smart entrepreneur to start an alternative energy transport business, building on many of the techniques publicized by theRMI. A key part of the financing would have to include real options analysis to demonstrate the value of the hedging option created by insulating customers from future oil shocks (which are sure to come). Expanding during an oil crash allows one to be prepared to profitably exploit the next oil price spike.
The IEA has already forecast that all oil demand growth between now and 2030 will come from non-OECD countries [slide 4, pdf]. I haven’t seen anything in their report that expected anything like this. When you combine this with the prospects of a serious decline in Chinese economic growth, you have a scenario where oil demand could absolutely crash.
During such a scenario, by the way, would be the best time for a smart entrepreneur to start an alternative energy transport business, building on many of the techniques publicized by theRMI. A key part of the financing would have to include real options analysis to demonstrate the value of the hedging option created by insulating customers from future oil shocks (which are sure to come). Expanding during an oil crash allows one to be prepared to profitably exploit the next oil price spike.
