The Economic Perspective: “Is Oil on the Way Out?”

Mary: I’m Mary Walden with economist MW welcoming you to the economic
perspective. Today’s program asks if oil is on the way out. Mike, there is optimism the
economy will make a major recovery from the Covid-19 recession in 2021. If this
happens, then attention will turn to other issues, such as energy. Does this mean we will
rapidly move to alternative energy sources, like solar power and away from oil?
Mike: Summary Answer
a. Indeed, the International Energy Agency is predicting oil usage will peak in
just a few years, in 2030
b. But this assumes government plans to support alternative energy sources, like
solar, will continue
c. This could be a problem
d. Look at vehicles – although powering a vehicle by solar-based electricity is
roughly half the cost of using gasoline, purchase price of electric vehicles can
be much more
e. Recently, electric vehicles accounted for only two percent of total US vehicle
sales
f. As a result, many experts think transition away from oil-based energy will
take longer

Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension
program from the Department of Agricultural and Resource Economics.