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Oil’s advantages over other forms of energy stem from four sources:

It is a concentrated, not diffuse, energy source.
It can easily be made into transportation fuels-mainly gasoline, diesel, and jet, but also barge, ship, and train diesel.
It has a well-developed infrastructure. A known technology, billions of investment dollars and plenty of forward capital momentum make the process of using oil from exploration wells through gasoline pumps easy.
Oil is the source of petrochemicals, from which a myriad of cheap, useful, durable products that run the economy—plastic wrap to rain boots—are made.

Oil is expensive for heat and to generate electricity

Oil is a good source of heat and of energy to make electricity, but in this role, other sources--especially natural gas—are far more cost-effective. For the last thirty to forty years, natural gas has been replacing #2 heating oil and # 6 residual fuel oil (for commercial heating), although they remain as back-ups. #2 heating oil is still critical in the US Northeast, which has a less-developed natural gas pipeline network than the rest of the country.

Solar panels on a home in Colorado.
photo courtesy of: nrel.gov/data/pix/collections

Solar energy, though diffuse and requiring substantial hardware to gather, is becoming more cost-effective for heating. Demand for solar heating continues to increase: it’s seen as a common-sense choice in the US Southwest and China.

Oil and alternatives in the transport fuel market

Although the electrical grid has its own infrastructure limitations, the advantage of using electricity for transportation is that it throws open a much wider and more secure diversity of base fuel sources: nuclear, coal, and natural gas, as well as smaller-scale renewables like hydro, wind, and solar photovoltaic.


Golden Prairie Wind Farm near Lamar, Colorado. photo courtesy of: nrel.gov/data/pix/collections		Solar panels on the roof of the visitor center at Zion National Park, Utah. photo courtesy of: nrel.gov/data/pix/collections

Oil’s marked advantages as a transportation fuel will keep it the spine of the world economy for years to come. Developing transport fuel substitutes such as electricity and ethanol—whether made from corn, switchgrass, or sugar—is key. More stringent US CAFÉ standards will encourage needed conservation.