Is Cheaper Oil A Good Thing?

[karmakop]

It has plummeted nearly 40% in just three months, from about $147 a barrel in July to below $83 on Friday, with no obvious bottom in sight. If that sounds good, you are probably a driver who winces these days at filling your gas tank. But the downward spiral could mean trouble for oil-rich countries and for the environment.

Is Cheaper Oil A Good Thing? - TIME

[wolranes]

"But the downward spiral could mean trouble for oil-rich countries"

Screw them!

As far as the disincentive to save fuel the price is still high enough to encourage conservation efforts. The fact no one is buying new cars right now is a bigger factor killing future conservation efforts.

[Karl]

One potential issue, based on past trends in the 1970/80's, is that the investment in renewable energy tends to be directly proportional to oil price. Regardless of all the talk about environment, climate, carbon footprinting and sustainability -- the interest in alternative energy usually becomes most intense when fuel prices (and therefore everything else) are higher.

There can also be impacts on the "value" of investments in this sector ...> Sustainable Energy After the Correction - Seeking Alpha

[LMagic007]

I doubt oil will stay low for too long. Once the credit crisis blows over, I expect oil along with other stocks will rise as will the oil price, as it continues its longer term upward trend. Also OPEC can tighten supply to keep the oil price from falling too far. Similarly renewables should not be too effected by this crisis, any more than other industries and in some ways they may benefit over the next few years as they increasingly become more competitive with fossils.

[August]

Weeklong rollercoaster ride between fear and denial finally ends - Paula Gardner - Michigan Business Review - MLive.com

In what seems like a series of cruel jokes, oil prices are sinking to such levels that SUVs may look appealing soon, Ford Motor Co.'s stock price is cheaper than the last iced coffee I bought at McDonald's and Cramer is pushing investors toward Wal-Mart.

[mikep]

I worry that the fall in prices will make renewable energy look expensive. Then, when we crawl out of a global recession, the price will shoot back higher than ever as demand rises, but we won't have built much new energy infrastructure and we'll be past the peak of production.

[windgen]

Cheap oil means more addiction and lethargy when it comes to getting off oil. When oil prices are high, people are motivated for alternatives. Perhaps the best cause scenario is for oil to bounce between high and low prices for while. When prices are high, people are motivate for change. When prices are low, consumers get a break.

[fireandrain]

Interesting piece here comparing now to the 80's when the post-70's oil price rise subsided and investment in renewables dropped.

Today’s slumping oil prices may undermine viability of alt-fuel programs – again....“When oil prices dropped, it killed that push to ethanol – and you could have that happen again,” ...will GM stay with the Volt if oil prices drop further? Will consumers pay $40,000 for it if gas is $2.50 per gallon?

Are alternative fuels reliving the 1980s? | csmonitor.com