You might like inexpensive gas but oil companies are suffering and it could come back and hurt our economy. 140 billion dollars last year is what Americans kept in their pockets. However lower production, less investment, and less infrastructure is the result of the lower prices leading to a 140 billion dollar loss in the energy sector.
The low gas prices have also lead to lower investments in green energy leaving some budding companies to shut their doors and they are not alone, many oil companies are going bankrupt and can’t afford upkeep costs. This trend will eventually lead to a lack in supply and a strong increase in demand. When the demand rises for oil we will have a lack of suppliers to fill that need and purchases of foreign oil will go up to satisfy that, thus leading to billions of dollars lost to a foreign competitor.
If you support green energy you should want to pay more for gas. There is no incentive to find renewable alternatives when it is cost ineffective. Without the investments of large companies and capital investors green energy can hardly afford their research and development costs let alone make experimental prototypes. Sure some green companies are doing fine but many startups with innovative ideas are lost in a crowd of cries for funding. Companies like Tesla, Choose Energy, and Solarkiosk would not exist if energy was inexpensive.
Not only is it horrible for us, the rest of the world economy suffers. Oil is so low that countries like Iran and Russia which require over $100 a barrel to be profitable have fallen in economic recession. Venezuela sits on the world’s largest oil reserves which has used oil to pay for pensions, healthcare, and social benefits is now seeing a collapse similar to a depression. Inflation soared over 200% and the government is unable to pay for food and basic supplies. Iraq who uses finances from oil to combat ISIS is facing a financial deficit in which they are unable to pay for more military when it is desperately needed.
Even here in North Dakota we are facing a recession and cities like Williston and Watford City are being hit hard. Empty apartments to businesses shutting down. Rigs are going cold all over the state leading to hardship for many who are now unemployed and are unable to get another high paying job. Even a political upset may have been influenced by the decline of oil. Doug Burgum won the GOP ticket for governor with his promises of change, one of which was diversifying our economy.
When we fill up for gas we are actually filling up our economy and we need to start looking at it that way.