The process of Rapid Substitution

Rapid Substitution is a strategy to dramatically reduce the cost of oil through accelerated reduction of oil consumption. Based on analysis of historic oil market dynamics, this can be accomplished with a relatively small reduction in oil consumption. Accomplishing this will require private sector investment, smart government policy, and public initiative.

Based on the inelastic nature of oil production and our analysis of historic oil markets and oil supply curves, we estimate that a rapid drop in oil consumption of a few percent can reduce oil prices by over one half, generating hundreds of billions of dollars in savings for consumers.

Rapid Substitution isn’t just good for consumers—by lowering oil prices, Rapid Substitution also discourages future oil production, keeping billions of barrels of oil in the ground. Rapid Substitution also provides the government with an opportunity to generate hundreds of billions of dollars in revenue which can be invested in green energy technologies, thus accelerating the transition to renewable energy.

Step 1

Reduce Oil Demand

A rapid investment in zero emissions solutions (like zero emission cars and trucks) and policies that reduce driving (including public transportation, walking, biking) greatly decreases the global demand for oil.

step 2

Oil Demand Drops & the Price Goes Down

With increased participation in oil replacement solutions, oil production and supply begins to outpace demand. When oil demand drops below supply, oil prices will crash.

Oil demand has dropped below supply before. In the 1980s, new vehicle efficiency standards heavily curbed the demand for oil leading to prices that were depressed for an entire decade.

The same oil economics concept holds true today – and with Rapid Substitution, just a five percent (5%) drop in oil demand would expect to see oil prices drop by a whopping fifty percent (50%).

Step 3

Save & Reinvest

Dropping the price of oil by 50% has two major effects: it helps our environment and saves consumers billions of dollars in energy costs.

Lower energy prices provide an opportunity for our government to capture the savings and to invest in the green energy transition creating jobs, renewing infrastructure, and mitigating climate change.

Decreased oil demand and lower prices for oil mean that new oil exploration and extraction is no longer profitable. This will keep oil in the ground and help to avert some of the more catastrophic climate change scenarios.