Executive Summary

• Worldwide, global energy demand is beginning to shift strongly from oil to electricity
• At the same time, developed countries are psychologically wedded to their oil-dependent infrastructure and mostly developing countries are blindly emulating their developed brethren, condemning them to suffer the same vulnerabilities
• World demand for energy supply is proving much less elastic than demand for oil
• Oil is likely soon going to be left to find its true (much higher) price
• As the realization of the grid's importance dawns on economies, expect massive infrastructure investments to follow

If you have not yet read Part I: The Demise of the Car, available free to all readers, please click here to read it first.

China contains 19% of the world’s population and accounts for 21% of the world’s energy consumption. But India, while containing 18% of the world’s population, only accounts for 4.6% of global energy demand. It is not possible that India can call upon oil to fund the next leg of its industrial growth.

For even after we consider the higher marginal utility of oil in the developing world – higher prices are integrated more easily to the economy as each new consumer uses only a small amount of oil – there is simply not enough economically recoverable oil for India to replicate the Western history of car and highway development.

Furthermore, the prospect that hundreds of millions of India’s citizens, already unserved by the powergrid, would turn first to oil consumption is highly unrealistic. Perhaps the government of India wagered that the Great Quadrilateral was needed as a foundational piece of national infrastructure – not as a bet on a future built for automobiles.

Regardless, we have already seen in the data out of countries like China that the mix of energy demand starting last decade began to shift, strongly, from oil to electricity.

Remember, for over eight years now, the world has played largely a zero-sum game with regard to oil as global production has been fluctuating between 72 and 75 mbpd (million barrels per day).