In a recent interview with Financial Sense’s Jim Puplava, energy expert Robert Rapier explained why he thinks OPEC (the Organization of Petroleum Exporting Countries) is headed for trouble and what the increased popularity of electric vehicles will do to oil markets. It’s only a matter of time before the markets are hit by the wave of newer cleaner energy. Rapier walked us through what this could look like for OPEC and how other countries and companies are tackling the issue.
Rapier doesn’t think OPEC is going to crash and burn today, but he does believe they’ll have to face their fate within the next decade. “If the U.S. continues to increase oil production for the next 10 years it’s going to ruin OPEC” Rapier said. While OPEC aims to cut production, the U.S. has been increasing their oil production. This lack of control over the markets means that OPEC could be out of luck when “electric vehicles really start to hammer the oil markets which is probably about a decade away and [then] OPEC will be ruined…” Rapier explained.
With the rise of electric vehicles as a preferred choice of personal transportation comes the decrease in demand for crude oil across the world. This isn’t to say that every mode of transportation will make the switch to electric power. Rapier thinks we’ll “always rely on fossil fuels or some energy dense liquid fuel to power airplanes” along with other modes of transportation such as marine shipping. However, if and when personal transportation stops relying so heavily on gasoline and diesel it will create a significant impact on crude oil demand around the world. “Crude oil demand will pull back if electric vehicles become the preferred option for consumers to drive around” Rapier said.
Looking ahead, Rapier said he sees far more longevity in natural gas than in oil. He posits that natural gas will continue to play an important role for the next three to four decades, while oil will hold on for about 10 more years. “Natural gas is going to grow I’d say through 2050 and I can’t say that about oil.”
Full article: Robert Rapier on the End of OPEC and Rise of Electric Vehicles (Financial Sense)