Oil and renewables don't overlap perfectly competitively. Renewables are pure electricity, oil is a portable power source. Some oil is burned for power, but onl

Oil and renewables don't overlap perfectly competitively. Renewables are pure electricity, oil is a portable power source. Some oil is burned for power, but only when other energy sources (Coal, renewables, natural gas) are unavailable. You might have a gas generator to back up a solar panel, but you are never going to replace a solar panel with a generator. The cost to extract shale oil is roughly $40/ barrel. Oil sands are similarly expensive to extract. If oil were to stay at a low enough price for a prolonged period, shale oil and tar sands operations would cease production entirely, limiting supply and increasing the prices. At $40 per barrel, oil is not economical to produce electricity, but remains viable as a vehicle fuel. It's almost entirely reversed. As more and more vehicles become electric (and less expensive to operate), demand for oil declines.