The difference between the recovery periods following previous oil shocks and the current one is that a significant proportion of today’s oil demand is in permanent decline. This particularly applies to developed countries where demand for oil is past its peak. In other words, this recession has triggered demand destruction, not demand suppression.
It’s possible the day of “peak oil” has arrived – but not in the way everyone expected. Instead of peak oil, we’re looking at a peak in demand for oil. The oil age won’t end tomorrow, but the idea that it will go on for ever – with its attendant catastrophes and tragedies – is seriously in question.
Against this backdrop, the economic case for investing in clean technology becomes as clear as the environmental case. The faster we introduce efficiency in the transport sector, making better cars that use less fuel, adopting cutting-edge hybrid technology and pushing vehicle electrification, the faster the oil industry of the last century will be replaced by the cleaner, safer and economically more sound industries of today.