Darn Those Low Fuel Prices!

I think I heard a global sigh of relief when fuel prices decided to drop recently! All of our lives depend on fuel, and obviously the higher fuel prices were cutting into our budgets – especially affecting those with lower incomes who are having to commute to their jobs every day.

Now that fuel is cheaper, we can relax again! We can drive whenever we choose, to wherever we choose, we can buy that big SUV and forget about that inconvenient bus! Which leads me to my topic for this article: are lower fuel prices bad for our environment? My hunch is that yes, they most likely are.

When fuel prices were high, there was much more incentive for people to be environmentally friendly – riding a bike or carpooling to work provided some rather significant savings. For example, my neighbour said it was costing him at least five dollars per day to commute a relatively short distance to his office every day. He has since started carpooling with another neighbour, ultimately saving each of them around fifty dollars per month without losing any significant comfort or convenience. In the bigger picture, they both also cut their greenhouse gas emissions in half!

Imagine if our whole world could cut pollution in half that quickly and easily! Judging by the long lineups of vehicles with mostly just a single person in each vehicle, we obviously still have a lot of potential for reducing pollution. Perhaps fuel prices were not yet high enough last summer to encourage people to make that change.

This also makes me wonder how the cheaper fuel will affect my own personal favourite – the electric car. Recently I was reading an article quoting a Chevy spokesperson stating that battery costs are much too high. The overall impression I got from the article was that Chevy may be changing their mind about the Volt. Hopefully they won’t drop it altogether as they did with the EV1 a decade ago. As it is, the Volt could be produced with a smaller, cheaper battery and still get much better fuel economy than the average car, so the battery cost sounds like nothing more than an excuse to me. However, with lower gas prices, they may just decide it’s not worth it. Let’s hope the other electric car companies are more optimistic!

The other consideration of the lower energy prices is how alternative fuel companies are being affected. Obviously the lower prices will affect the immediate returns for companies already in production, and immediate return-on-investment numbers may not look as rosy, but hopefully investors will see past the short term and the projects will continue so that they will be ready when our next fuel price crunch hits – which I’m sure is at most a few years away.

One other downside of lower oil prices goes back to my previous article – if we are really getting closer to running out of oil, these lower prices will just encourage OPEC to pump it faster to keep their revenues up, while encouraging us to use it up faster.On the bright side, it’s possible that the current fuel prices and shaky economy could provide some better prices for those of us looking to install some energy saving devices and alternative energy sources in our homes.

As for me, I know that fuel prices, like the stock market, will continue to rise even though there are the occasional dips. I’m still holding out for my electric car!

Hugs and happiness,
-Nico, The West Coast Hippie