Submission + - With Tumbling Oil Prices, Who Wins and Who Loses?
Potential Loser: The environment. As a general rule, the cheaper fossil fuels become, the more challenging it will be for cleaner forms of energy like solar and wind power to be competitive on price. But solar and wind power are sources for electricity, whereas fluctuations in oil prices most directly affect the price of transportation fuels like gasoline and jet fuel. Unless or until more Americans use electric cars, they are largely separate markets, so there’s no reason that cheaper oil should cause a major reduction in investment in renewables. The average pump price of a gallon of regular gasoline in the United States was $3.12 this week, down from $3.80 in October 2012 and down from $3.70 just four months ago. In the past, cheaper gasoline has two environmentally problematic effects: It leads people to drive thirstier cars and trucks and to drive them more miles. This time may be different. The number of miles Americans drive per capita has declined for nine straight years dropping from roughly 10,100 miles in 2004 to about 9,400 miles in 2013. A change that significant suggests a change in lifestyle—one that would be hard to upend. In addition, the average fuel economy of new cars and trucks sold in the United States has increased markedly over the past decade—in contrast to the 1990s, when new-vehicle fuel economy essentially flat-lined. Today, the average new car sold in this country goes 36 miles on a gallon of gasoline, up from 29.5 mpg in 2004. "Times have changed since the dawn of the last era of cheap oil," says Jeffrey Ball. "Even assuming low oil prices are the new normal, a cleaner energy system probably is too."