The slow drop in oil prices this year may finally have something to blame - the rise in demand for alternative fuel sources. Electricity may not be the fuel powering millions of vehicles all over the United States yet, but it’s provided a convenient counter to the constant news regarding oil price fluctuations in various parts of the globe.
This is why the Organization of Petroleum Exporting Countries has started to view the problem through a different lens, according to Bloomberg. Shares in companies like Tesla are far outpacing those of traditional oil companies. Demand, or at least perceived demand, has made electricity the go-to power source to the point where there are many people now predicting the demise of oil altogether.
The rise in demand for alternative fuels coincided with new oil finds – thanks in large part to fracking technology - on U.S. soil. While OPEC has not lost the U.S. yet as a buying consumer, it has meant less American reliance on foreign oil.
And initiatives like what is happening in the ports in California are adding to this shift. According to writer Rachel Uranga of The Mercury News, the Ports of Long Beach and Los Angeles have initiative a clean air plan “for the elimination of dirty-burning diesel equipment by 2035.” The 18-year plan is set to cost around $14 billion, about $9 billion of which will be earmarked for truck purchases.
Uranga explained that diesel-powered trucks still hold sway over many and continue to hold an advantage in moving cargo long distances – something electric trucks have not mastered due to battery size issues.
FreightWaves.com has discussed how the recent extension of California’s cap-and-trade deal is also adding to the decline of oil as the state clamps down on emissions.
Bloomberg presented a line graph that showed an increase of crude oil sales, but it may not be enough as OPEC is no longer just fighting the “dirty oil” image and is now also fighting an environmental issue.
There are other pushes on to electrify the transportation industry. Bloomberg has described this as “a political trend towards growing electrification.”
Which will happen first - the depletion of fossil fuel resources or the rise of alternative sources of automobile energy?