Everything Silicon Valley Needs to Know About the Oil Crash
Big Tech’s wake-up call that despite excitement about renewables, fossil fuels are far from over
Talk to anyone in Silicon Valley or the broader tech world and there is largely one truth: Fossil fuels are dead — all that matter are renewables. After all, Elon Musk is revolutionizing personal transportation, solar power is becoming cheaper by the month, and batteries are storing more and more energy affordably. Clearly, time is up for oil and natural gas.
But, with a hammer blow to global stock markets this week, fossil fuels have sent a stark message to Big Tech: Oil is still very much relevant. Energy companies are just 3.5% of the S&P 500 (down from 25% in 1980), but they tanked tech and nearly every other type of U.S. stock Monday when Saudi Arabia, with Russian connivance, launched a price war against prolific U.S. oil shale drillers over the weekend. At Monday’s close, Google was down 20% from its high last month, Facebook by 22%, and Amazon by 17%.
Oil prices recovered by more than 10% on Tuesday after the previous day’s 24% plummet, and Big Tech bounced back, with Apple shares up more than 7%. But the message from the market is loud and clear: We may be decades into the information age, but oil still remains the essential…
