How does alternative energy lead to lower oil prices?

Alternative energy is energy...like electricity.





Oil isn't used for electricity - or is it? I can't think straight right now, I'm so confused.





So if we have more alternative energy, why does that reduce our dependance on oil?





ThanksHow does alternative energy lead to lower oil prices?
Oil is one of our 3 or 4 primary sources of energy.. oil, natural gas, coal and nuclear (there are others sources of energy such as wind, water, wave, hydroelectric (dams) etc but these 4 are our primary sources.)





Alternate energy lessens demand for the 4 primary sources depending upon what use of energy you are replacing..





So alternate fuels, such as bio-diesel and ethanol based fuels, lessen the demand for oil for transportation. Electric cars will lessen the demand for oil but increase the demand for electricity.. so there may be more demand for electrical generation and power plants (i.e. coal or nuclear).





Oil prices are highly dependent on demand.. a relatively small drop in oil demand can cause a a big drop in oil prices.. this is exactly what happened in the last year when the oil prices plunged from $150bbl to $40bbl now.. I think that oil demand dropped by roughly only 5% but the price dropped by over 60%...








BTW Oil and even natural gas are used at times, and in some places, for electricity generation but both are much more expensive than coal..or nuclear power... Therefore, oil and natural gas generators are mostly used to ';top off'; electricity generation in peak demand situations rather than a ';base load'; -- or everyday common use. this is because oil and natural gas generators are easy to turn off while coal and nuclear power plans are hard to turn on and off..





Oil and natural gas are also widely used for home heating and other non-transportation uses so better insulated homes and higher winter temperatures will also affect demand.How does alternative energy lead to lower oil prices?
Oil is not directly used to create electricity.





Electricity is not the only form of energy generated using alternative energy sources. For instance, using corn or sugar cane to generate ethanol is using an alternative energy source to produce a transportation fuel. Another form is conversion of Waste Vegetable Oil (WVO), or oil that is used in fast food restaurants etc. to biodiesel, which is another transportation fuel.





Another way that use of alternative energy lowers oil prices indirectly is that currently a lot of natural gas is being used to generate electricity, in particular during periods when there is high demand for electricity. Use of solar energy and wind energy are used to generate electricity alleviates requirements for natural gas to generate electricity. Therefore natural gas can be used as a transportation fuel, alleviating demand for oil as a transportation fuel and therefore lowering cost.
When the demand is more, prices also go up because the intention of the seller is profit only.In india, sunlight is plenty and so solar energy works out much much cheaper.When the demand for electricity and petrol decreases, naturally the price goes down.When the raw material is free, why go for expensive ones?
You can convert your home from oil heat to electric heating. If you are using solar panels or wind mills to generate electric, you will be saving money because sun and wind is a source of renewable energy. Also solar and wind power energy is safe for the environment.
We are adicted to energy. So turn off.





Nucular power plants pollute CO2 and nucular waste. Just because the french are doing it doesnt mean we do it.





Obama and Jimmy Carter both oppose nucular plants. So should you and I!!!!!
Despite what some other people have said, oil IS used for direct energy generation. The power plant near my home burns bunker C oil.
In a word NO.In four years time oil prices will rise sharply, as no new oil fields are coming on stream or being found.
Less demand for oil so the price goes down.