Oil at $145.45 a Barrel

Scary facts:

  • When I started this blog post (10AM Thursday, July 3) oil was trading at $144.23 (source Oil-price.net).
  • When I came back to finish the post (6:30PM same day) oil was trading at $145.45
  • In total, oil gained $1.72 in 8.5 hours, or an average of 20 cents an hour.

By now the high price of oil is old news – people opine on the role of speculation, high demand in Asia, peak oil and $250 a barrel by this time next year.  No one serious is really saying that we’ll be seeing cheap oil any time soon, if ever again.

So, it seems like as good a time as ever to start talking about renewables.

As a society we won’t be free from oil for a long time.  We’ve built our entire modern civilization on oil – our cities, our food industry, our transportation infrastructure, literally everything in our culture is based on oil.  Even if it hit $500 a barrel, we’d still buy it.  (How scary is that!)

That volatility really crystallizes what makes solar such an amazing value proposition.  You have a fixed set of up front costs, some very predictable and very low maintenance costs, and that’s it – the fuel for the system is free.  You pay to set up the system, and it immediately starts to pay you back.

Now, right now, the best systems on the market pay you back in 10+ years, less with subsidies and incentives, but the trends are in solar’s favour.  Progressive government incentives, a growing movement to charge for carbon emissions, ever higher and more volatile electricity costs and lower and lower cost solar power systems all point to a booming industry.

That and oil hitting $145.45 by the end of this post.

[Edit: This post was originally written on Thursday, July 3, but couldn’t be posted because of web hosting problems.  The price of oil today is $141.42]

Economist cover, May 31, 2008 – When this was published one month ago $135 was shocking enough to be a cover story.  Now it’s the good old days.

Economist cover, May 31, 2008

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