With the price of oil plummeting nearly $100 a barrel since July, people have something to feel good about during this difficult economic time period; however, it may lead to the dismissal of the peak oil theory. For those not familiar with peak oil, it is the point in time when the maximum rate of global petroleum extraction is reached. After this point in time, the rate of production begins to steadily decline.
With the relatively cheap oil prices, the cost of bringing new oil into production is too expensive. As the International Energy Agency (IEA) has repeatedly warned for more than a year, excessively low prices will discourage investment in production, especially with the steadily rising costs of extracting and processing oil from increasingly difficult places. This lack of sufficient investment has serious consequences for the future supply once the global economy recovers from its current descent; especially considering that it will take $26 trillion over the next 20 years to keep energy flowing at its current pace, according to the IEA.
So what does this mean for oil prices? It means they will go up because supply will not be able to keep up with demand. While prices are cheap, we as a nation need to utilize the ‘saved’ costs for alternative energy development and petroleum-free transportation. President-elect Barack Obama recognizes the need for this change and will be dedicating massive government resources towards renewable energy.
Hybrid Technologies is one company that has been ahead of the curve and is making a difference already. The company is committed to using its resources for the development and marketing of lithium-powered vehicles and products, as well as commercial and residential properties. As an emerging leader in the development and marketing of lithium-powered products, Hybrid Technologies is positioned to benefit from the rising demand for electric powered transportation.
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