"From an oil company's perspective or an oil state's perspective, they're not going to sit back and price themselves out of the market. A lot of models that look at alternative energy deployment are quite dependent on this continued increase in oil price," said Leach. "If you just put that in your model, you're ignoring the story that says that, if oil is irrelevant in 30 years, then there's going to be a lot of incentive to get it out of the ground today."
No requiem for the electric car, please
Leach suppressed the notion of a worldwide conspiracy that states that oil companies are attempting to keep alternative technologies at bay. The conspiracy would have to be well-planned, he says, if it worked when an alternative technology was less than half the cost of a barrel of oil. He says even now, consumers have the ability to affect market decisions even when prices rise. Boycotting gas stations on Monday only to fill up on Tuesday carries no real message to producers and retailers, he says. However, changing long-term behaviours towards alternatives in the face of a gas hike would be a significant moveand one that would force producers and retailers to adjust behaviours and reduce profit margins.
"Right now they don't have to eat any oil-price increase because they know that whatever price gets posted on the sign, people grumble and complain and pay," says Leach. "If, in Edmonton,
|Contact: Jamie Hanlon|
University of Alberta