With very little time left in the campaign, President Trump is trying to exploit the comments that Vice-President Biden made about the future of energy in Thursday night’s debate.  Vice-President Biden’s statement meet the classical definition of a gaffe — when a candidate actually speaks the truth.

The reality is that whomever wins the election the oil industry is in trouble.  And the major oil companies have known this for years and have made adjustments to compensate.  It’s the folks on the ground relying on the oil industry for their jobs that do not know what the suits in the offices have already come to terms with.

I grew up in the oil belt in the 70s and 80s.  Even then, the U.S. oil industry was in trouble.  The simple reality is that we have a lot of foreign competitors who also have vast oil reserves.  The health of the U.S. oil industry is closely linked to the price of oil.  When oil is over $60 per barrel, the U.S. oil industry is in good shape. When oil gets down to $30 per barrel, it is really not cost-effective to drill for new wells in the U.S.  And, as time goes on, old wells also become less cost-effective as all of the “easy” oil has been removed and it is more expensive to coax the last drops of oil out of the well.

In the last decade, fracking has helped U.S. oil production.  But fracking has its environmental consequences (risking leaking oil and other chemicals into the ground water) and geophysical consequenes (potentially creating fault lines or aggravating existing minor fault lines) that lead many to conclude that the “benefit” of access to more oil reserves is less than the cost.

But the oil industry in the U.S. faces three major challenges that will ultimately lead to its decline — sooner rather than later.  First, there is only so much oil in the ground.  Without going into the full geological science behind oil, it does not develop overnight.  For at least the last 100 years, we have relied on oil as a large component of our energy needs.  In simple terms, we have gotten as much “easy” oil out of the ground as we can.  What is left will be progressively harder and harder to retrieve.

Second, the oil industry depends on the demand for energy.  And consumers benefit from energy efficiency.  If we can heat our homes for half the energy consumption or go twice as far on a tank of gas, that reduces our cost.  But as demand goes down, so does the price of oil to the point that it becomes impossible to make a profit from oil.

Third, there is a trend toward renewable energy.  Even if the U.S. does adopt strict standards to reduce carbon, other countries will.  Like most goods in a global economy, it really does not matter if the oil is being consumed in the U.S. or elsewhere.  If global demand for oil goes down, the price for oil will decline.

Obviously, if the U.S. decides that it’s future depends on moving to renewable energy, the decline of the oil industry will happen sooner.  But nobody is talking about flipping a switch overnight.   Instead, we are looking at a 20-30 year period of decline.  That is more than enough time for states and local governments to grow other industries to replace the oil industry.  You have seen a template for this process in Houston.  Back in the early 80s, the economy in Houston area was very highly dependent on the oil industry.  Since then Houston has diversified, becoming a leader in medical research, finance, and high tech.  Energy is still a major component of the Houston economy, but not as much as it was forty years ago.  And Houston is positioning itself to remain as a leader in the energy sector even if oil is less significant as an energy source.

And we have seen some of this play out in the coal industry.  West Virginia has been devastated by the changes in the coal economy.  It has, for the most part, failed to find an alternative industry.  But, if you head out to the western states, despite the dramatic decline in the coal industry, those states have unemployment numbers that are better than or equal to the national average.

In other words, whether the decline of oil will be damaging to state and local economies will depend on how states plan for the coming future.  States that do not see the writing on the wall will probably suffer.  And it is important to invest in training and retraining workers as certain types of jobs disappear.  Noting that economic changes are ultimately inevitable does not mean that we should be callous about the impact of those changes on real people.

I live in a rural area.  Every year, technological changes allows farmers to farm more acres with fewer people.  The farm jobs that were here twenty years ago are not here today.  Young people are having to move from rural areas to suburban areas if they want to find work.  Certainly more could — and should be done — to get small scale manufacturing into these areas to keep these counties and small towns economically viable.  But, we are not going to change back to a system of farming that was more labor intensive. That genie is out of the bottle.

Likewise, the genie is out of the bottle on changes in the energy industry.  While the difference between a Joe Biden and Donald Trump presidency may have a very marginal impact on the energy industry over the next four years, the writing is on the wall.  The oil industry in 2040 is going to be substantially smaller than the oil industry of 2020 even if Donald Trump wins re-election.  Noting this reality is the first step toward helping people in areas dependent on the oil industry.  Hopefully, voters in those areas will not put their heads in the sand and believe the lies that Donald Trump can save their industry.  The failure of Donald Trump to improve the circumstances of those in coal country should be a warning for those who believe that the future can be stopped.