Oil and innovation

There have been numerous articles and books discussing the fact that the Oil is running out, with many dooms day prophesies about the destruction of our economies and way of life coinciding with this decline.

This is partly true, yet I feel the future is going to look a lot brighter than some have anticipated.

Whilst according to BP there is only enough oil to last approximately the next half century, and the world is currently highly dependent on this oil as the foundation of it’s economy, it is worth considering these words spoken by the veteran Saudi oil minister in 2000.

Thirty years from now there will be a huge amount of oil – and no buyers. Oil will be left in the ground. The Stone Age came to an end, not because we had a lack of stones, and the oil age will come to an end not because we have a lack of oil.

The pace of innovation taking place in renewable energy is fast paced and extremely exciting. It’s beginning to look oil will become redundant before the oil runs out.

Take the Photovoltaic energy sector.

For UK Households, the cost of Solar Panel Roofing has declined dramatically since 2011 from £15,000 for installation, to approximately £5,500 in 2015, making them an increasingly attractive form of energy supply.

It has been widely reported that the costs of Solar Energy will have further to fall as innovation is gathering pace in this sector.

Over the next 10 to 20 years, we are likely to see huge improvements in the reliability, costs and energy capacity of renewable energies, to such an extent that our children and grandchildren will no doubt find it baffling that we used to fuel the entire world on oil.

I expect this will be similar to this generation finding it bizarre that people used to go out and purchase 12” records just to listen to one song!

Robert Bryce, in his book Smaller, Faster, Lighter, Denser, Cheaper, explains how technological innovation has been remarkable and it’s a trend that is likely to continue. As an example of how technology has been dramatically improving, he mentioned the following about the iPhone.

The iPhone has 250,000 times more storage capacity than the computer that went to the moon.

It’s worth bearing that in mind when we consider how we’ll fuel our lives in the future. I expect bright innovations will continue to surprise us lesser minds and the future is most certainly very exciting.

By Mark Underdown

Financial Coach, Small Acorn Money

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