I have a startup in solar, and the thing I don't think people are understanding here is the unbelievable amount of growth that is starting to happen in solar. We're talking 400x growth in the next 40 years[1].
So far, the solar industry has reached grid parity (i.e. unsubsidized costs <= retail cost from the grid) in a few U.S. states and several countries[2]. When it has reached grid parity in these locations, you see a huge inflow of investment capital since there's little regulatory risk[3].
This trend will not change. Solar will only get cheaper, and fossil fuels will only get more expensive. So what happens in 10-20 years when solar is at or below grid parity in most of the world? Mix that financial advantage with a huge political movement to fight climate change (e.g. stop Colorado from burning down every other year), and you have the formula for another whale oil-style shift in energy.
I'm originally a chemical engineer from Texas, and I have a standing $100 bet with two of my friends who work in the petroleum industry that they will not retire in an oil job. Anyone else want to take that bet?
I'd like to know your thoughts on today's cheap oil prices-- assuming oil stays around $70-80 a barrel for the next few years, do you see that slowing down solar development/investment? In other words, do people keep their "eyes on the prize" so to speak, or are they dissuaded by temporarily cheap oil prices?
It's actually kind of interesting. I think it might be helpful globally for clean energy. Cheap oil means people won't feel as much pain if a carbon tax is put in place to compensate for the externalities of using fossil fuels. So this is an opportunity for political movements in countries to push through a carbon tax now. Then when the price of oil goes back up (i.e. after OPEC has driven out the frackers and hurt Russia sufficiently), the carbon tax will make clean energy more competitive. I personally think that OPEC is shooting themselves in the foot over the long term with this move.
For many of the smaller scale oil extraction companies (in the US), they've actually suspended production because of the cheap prices. Hydraulic Fracturing is a very expensive procedure right now and the low prices are hitting the point where the costs of extraction don't pull enough revenue to get the profits the companies need to survive.
Oil has a sweet spot. Too expensive it can't compete with solar and other green energies. Too cheap and it can't be extracted at a profit.
As green energies push down that ceiling closer to the floor, oil is in for a rough time.
Finally, oil is subject to extreme geopolitical pressures. Two of the current pressures on oil prices are ISIS's selling of captured oil fields at discounts to fund operations and the United States and others encouraging prices to stay low so that funding is as menial as possible. Other countries' geopolitical power comes from control of oil (Russia), or transport (Turkey), or contributes the majority of their wealth (Norway) and so these countries have strong motivations to keep oil dominant.
If you define the terms of the bet I might be interested. Perhaps you friends won't retire in oil-extraction jobs, I can see that potentially happening, probably not in my lifetime (I'm 33). But the petroleum industry as a whole: liquid fuels; lubricants; plastics -- I can't see that going anywhere.
If you currently work at a company that produces fossil fuel products that are used to produce energy, I will bet you $100 that when you retire after 2050, your last job will not have been in that industry.
So far, the solar industry has reached grid parity (i.e. unsubsidized costs <= retail cost from the grid) in a few U.S. states and several countries[2]. When it has reached grid parity in these locations, you see a huge inflow of investment capital since there's little regulatory risk[3].
This trend will not change. Solar will only get cheaper, and fossil fuels will only get more expensive. So what happens in 10-20 years when solar is at or below grid parity in most of the world? Mix that financial advantage with a huge political movement to fight climate change (e.g. stop Colorado from burning down every other year), and you have the formula for another whale oil-style shift in energy.
I'm originally a chemical engineer from Texas, and I have a standing $100 bet with two of my friends who work in the petroleum industry that they will not retire in an oil job. Anyone else want to take that bet?
Finally, we're hiring[4].
[1]: http://www.pvsolarreport.com/the-next-internet/
[2]: https://en.wikipedia.org/wiki/Grid_parity#Rapid_uptake
[3]: http://www.reuters.com/article/2014/01/16/solar-yield-idUSL4...
[4]: https://angel.co/utilityapi/jobs/44943-software-engineer