The Downside Of Falling Oil Prices
Today, the price of oil briefly dipped below $100 per barrel for the first time in who knows when, down from a high of $147 per barrel in early July. What’s more, prices are expected to be a bit lower still this time next year. So this is good, right? Gas prices will (hopefully) fall and inflation will (hopefully) subside as one of the main drivers of rising prices disappears. Well yeah, that’s all well and good, but there are downsides as well.
Delayed Adoption Of Alternative Energy
With gas and oil prices through the roof, people and companies have no choice but to innovate, which means either cutting back on energy usage, finding alternative sources of energy, or both. High oil prices gives entrepreneurs and scientists a huge incentive to research and invest in cleaner, renewable energy sources. Clean, renewable energy would be good for everybody. Unfortunately, cheaper oil discourages such investment.
Increased Consumption
For the first time in human history it seems, Americans have actually began cutting back: a full 4% over the past year, in fact. SUV prices have dropped like a rock as people have been opting for smaller, more fuel-efficient vehicles in droves. They might be tempted back into their gas guzzlers if gas prices fall significantly, however, since Americans tend to have very short memories.
More Environmental Damage
Of course, the natural consequence of increased consumption and delayed adoption of alternative forms of energy is more environmental damage. Greenhouse gases will continue to accumulate in our atmosphere and poison our lungs. Lower oil is great for our economy in the short term, but in the long term I’m not so sure. The switch to renewable energy sources may or not be a net long-term gain for our economy, but it’s certainly good for our society. After all, what good is it to be rich if we’re slowly destroying ourselves?
RSS Feed
Email
Trackbacks & Pingbacks