I'm reading The Prize by Daniel Yergin at the moment. Pre ICE the oil revolution was almost entirely about distilling out kerosine for lighting. Gasoline was too dangerous and treated as a by product, therefore extremely cheap/paid to take away. Interesting parallels to the potential future you describe though as you say; supply demand dictates that it's very hard to ever leave ICE cars behind if gasoline becomes incrementally cheaper.
Hi Ferg, if gasoline were to become over abundant and therefore cheap, you can count on the government (or at least my government in Canada) to step in and tax it even more than they currently do. Of course, this intervention in economics 101 would result in continuous oversupply of gasoline, of which the government would mandate reinjection into old oil reservoirs. What could possibly go wrong?
We hadn’t considered that the gasoline price could hypothetically plummet. It would act as a throttling mechanism for EV adoption. Good thoughts.
Great insight. This has a ton of food for thought regarding portfolio positioning.
I'm reading The Prize by Daniel Yergin at the moment. Pre ICE the oil revolution was almost entirely about distilling out kerosine for lighting. Gasoline was too dangerous and treated as a by product, therefore extremely cheap/paid to take away. Interesting parallels to the potential future you describe though as you say; supply demand dictates that it's very hard to ever leave ICE cars behind if gasoline becomes incrementally cheaper.
Hi Ferg, if gasoline were to become over abundant and therefore cheap, you can count on the government (or at least my government in Canada) to step in and tax it even more than they currently do. Of course, this intervention in economics 101 would result in continuous oversupply of gasoline, of which the government would mandate reinjection into old oil reservoirs. What could possibly go wrong?