The cost of oil has been a rollercoaster ride since the 1970s. Thankfully, we’ve hit a low in this season of recession, foreclosures, and a major Wall Street meltdown. But nobody expects the ride to be over—and the only way to go now is up.
Just ask oil industry insiders. A recent survey of senior oil and gas professionals by (auditing and consulting firm) Deloitte revealed growing concern among the top brass of the fossil fuel industry about the affordability and sustainability of oil and gas in the near future, along with a surprisingly strong belief in the viability of renewable energy.
Most participants in Deloitte’s assessment group expressed a belief that oil and gas will no longer remain the world’s cheapest energy source in the next few decades: 71 percent said that oil and gas is today’s most affordable energy source, but only 23 percent feel it will still be the cheapest source 25 years from now – a 48 percentage point drop.
Three-quarters considered it a good idea for the US to phase out fossil fuels for transportation.
Over half believe that transitioning away from fossil fuels is a reasonable goal for oil and gas companies.
When fuel prices are down, the inclination is to back away from energy policy that would get us off this scary ride. But even as we catch our breath (and our knuckles aren’t white for the moment), the ride remains dangerous and unpredictable—and it’s likely not getting any better. I shudder to think what lies around the corner (a loop-de-loop perhaps?).
If oil execs—of all people (!)—are thinking about bailing off, shouldn’t the rest of us?
As Senator Barbara Boxer head of the Environment and Public Works Committee (D-Calif) puts it: “At the end of the day, gas prices go up and they go down. In the long run, we need to find alternative clean-energy sources to protect our nation from hikes in gas prices and from the ravages of global warming.”
The good news: Unlike past oil crises and their aftermaths, president-elect Obama doubled down instead of backing off his alternative-energy push. He promises to make green projects a cornerstone of the economic stimulus plan.
Methodology: Deloitte conducted the sampling between November 5, 2008 and November 7, 2008, following the presidential election. It worked with the survey firm Penn, Schoen & Berland Associates to complete 52 phone interviews with director- and higher-level professionals at oil and gas companies with annual revenues of $100 million or more—more than half of the interviews, 33, were with C-Suite executives.