Gas prices are up: that’s bad. Gas prices are down: that’s even worse. You can’t win either way.
After a series of gas price hardship segments over the last year and a half on all of the broadcast network news programs because prices were too high, the Nov. 13 “CBS Evening News” reported lower prices weren’t good either.
“But low gas prices are also bad news, and the lower prices go the worse the news gets,” CBS correspondent Mark Strassmann said. “In other words, OPEC charges what it can get, not much in this bad economy, with unemployment at a 14-year high and consumer confidence at a record low. Even with today’s gas prices, road travel's still down five percent from a year ago.”
Over just the last month and a half, the price of oil has fallen from nearly $100 a barrel to $56 a barrel as of Nov. 13, and it’s considerably less than the record-high $140 a barrel earlier this year. Gas has fallen from a national average of $4.11 in July to $2.15 on Nov. 14.
That kind of price fluctuation has the characteristics of a market bubble. But Strassmann dismissed that as a possibility entirely and chalked it up to a lack of demand due to a bad economy.
However, there was one other downside to lower gas prices – the reluctance to invest in so-called “green” energy, which is more expensive than traditional energy. When gas and oil are cheaper, there is less incentive to use less efficient forms of energy.
“Sinking oil prices could have the same impact on plans to develop alternative sources of energy or fund green developments,” Strassmann added.
The fall in oil and gasoline prices hasn’t sparked elation in the media. Instead, the trend as been to lament the fact that cheap energy will inhibit the will to develop alternative sources of energy. On Nov. 13, New York Times columnist Thomas Friedman ranted on CNBC’s “Squawk on the Street” about low energy prices and politicians’ unwillingness to tax gas.
“I’ll tell you what I’d say back – I’d say, ‘Let’s get one thing straight pal – we’re both for a tax. If you don’t think there’s a tax on oil being imposed on you by OPEC, the world’s biggest cartel, then you’re not paying attention,” Friedman said.