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Right, but I think the point was that oil prices will plummet in the presence of cheap fusion power because fossil fuels will no longer be competitive for elect
by apendleton 14y ago
Right, but I think the point was that oil prices will plummet in the presence of cheap fusion power because fossil fuels will no longer be competitive for electricity generation, drastically reducing demand and freeing up capacity for the remaining markets where hydrocarbons still make sense (not that all fossil fuels are fungible, but reallocating natural gas resources to power cars isn't a completely ridiculous idea).
- adventured 14y agoOil prices won't plummet with a lot less demand, they'll go higher. There's no real ability for the oil industry to compete on price much below $50 to $60 / barrel energy equivalent. Even Saudi Arabia needs $85 to $100 oil just to pay for its budget these days. Since they can't actually afford to chase energy costs down, the industry would simply fold for the most part. The volume benefit that oil derives is a critical part of its formula. If you remove the volume, you lose the efficiencies of the oil ecosystem as well. That means losing the pipelines, tankers, and global supply counters to the OPEC cartel (as many nations would give up on oil). Most likely oil would move to being an expensive niche product, only supplied by those who can drill & ship it the absolute cheapest.