A revolution is coming and so far big oil doesn’t seem to see it coming. Producing oil via fracking has largely been credited with the recent downtrend in oil prices enjoyed by today’s motorists. But that’s not the whole story.
While rising supply has definitely been a factor, others are at play as well. Start with the fact that oil demand has remained flat for the last decade. This is largely thanks to federal regulation on engine consumption of gas and improving technology which has resulted in higher miles per gallon figures for a full decade now.
Then take electric vehicle, whose sales are up 4x in the last 4 years – a scary trend for any petroleum producer. Combine this with battery costs that are dropping just as fast as solar panel costs and you’ve got the making of a long term shift in demand away from fossil fuel powered vehicles in favour of electrics.
The icing on the cake is fuel cell vehicles, after years of disappointment, are finally rolling out of the lab and onto the streets to positive reviews.
While an abundance of oil may well be influencing prices the story isn’t just supply – demand is dropping too, at a faster pace than at any point in history. We’re on the verge of a seismic shift in consumption patterns that will forever change the way we think about driving. The gas station as we know it may be a thing of the past within 15 years.