Prices at the gas pump have been in free fall for more than three months, and oil industry analysts see no sign of a price reversal anytime soon.
Every time car owners fill our tanks, we save $15 to $30 compared with a year ago. Compared with 2012, consumers nationwide saved $22 billion at the gas pump in 2014.
In metro areas in six states, regular gas now costs less than $2 per gallon. The West Coast still has some of the highest-priced gas in the country. At $2.45 per gallon, Washington was the eighth-highest gas price in the country, but still trending downward.
Gas prices track closely with the price of crude oil, which dipped below $50 per barrel this week for the first time since 2009. Meanwhile, oil production in the United States is booming and OPEC has decided not to cut back oil production, causing a global market glut.
Lower gas prices create a surprising mix of winners and losers all over the globe — and a complex set of both economic and environmental threats and opportunities.
When oil prices fall below $50 a barrel, the economics of fracking fall apart, because it’s an expensive way to produce oil. That’s generally regarded as good news for the environment, but bad news for thousands of people who work in that industry.
At the same time, however, low gas prices might inspire a shortsighted person to rush out and buy a gas-guzzling, luxury SUV or a super-macho pickup truck. Such decisions are both environmentally irresponsible and not very smart.
There’s no guarantee this reprieve from high gas prices will last long enough to rack up 50,000 miles on that new, low-fuel-economy vehicle. And we can’t lose sight of the fact that oil and gas are finite fuels that will run out some day, or that fossil fuels are the major source of greenhouse gases that are causing devastating global climate changes.
Sadly, cheap gas prices already appear to be hurting the sales of hybrid and all-electric vehicles. A recent study by NACS, a convenience store and retail fuel association, estimated that every time gas drops 10 cents per gallon, the number of consumers willing to consider purchase of an alternative-fuel vehicle drops 1 percent.
It is welcome news that U.S. households have more money to spend on things other than gas. But we all ought to make well-reasoned, long-term choices on how we spend that money. There are myriad investments and purchases that make more sense than gas-guzzling vehicles.
And we all ought to recognize that just as suddenly as gas prices fell, they could rise again. The global economy could strengthen and OPEC could decide to tighten oil production, driving prices back up. American fossil fuel production could be undermined by a disastrous oil spill, a deadly oil train derailment, or a destructive hurricane season in the oil-rich Gulf of Mexico. The only certainty in oil prices is uncertainty and continuing volatility.
If we want a safe, stable energy supply and a climate that supports security and prosperity, we need to stay the course toward a transition from fossil fuels to cleaner, greener energy sources.