Oil prices keep falling
The price of oil has dropped almost $18 since mid-July. Good news for the consumer in the short-term, but some worry it'll undermine the growing swell of support for alternative energies. Hillary Wicai reports.
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KAI RYSSDAL: $78.40 minus $60.46 works out to almost 18 bucks. $17.94 to be exact. Or, to look at it another way, a drop of 22 percent in the price of a barrel of oil. Since July. The steepest drop in 15 years. And one the everyday consumer might be celebrating. But be careful what you wish for. Because a price that used to be considered high. Remember the days before $61 a barrel? Might now be called a price collapse. Marketplace’s Hillary Wicai fills us in.
HILLARY WICAI: High prices helped spur the call to expand domestic refining. In the last eight months the industry has announced projects that would increase the country’s refining capacity at the end of the decade by 7 to 9 million barrels per day. But National Petrochemical and Refiners Association’s Charlie Drevna says now those projects might take longer to do.
CHARLIE DREVNA:“I’m not saying all these projects aren’t going to be started, but there’s going to be a look-see at some of them, unquestionably.”
Record high oil prices also spurred the call for alternative energy sources. Daniel Yergin is with Cambridge Energy. He says one of the biggest problems with falling prices is that alternatives start to look less cost effective.
DANIEL YERGIN:“What this price does worry is people who are making investments in high-priced alternatives and who were depending upon high prices to make their investments in alternatives in one kind or another economic.
Still, even greens like John DeCicco with Environmental Defense are happy to see prices come down. He recognizes a high tag at the pump hurts consumers. But, there was another value in high prices.
JOHN DECICCO:“The gas prices have been a teachable moment and it’s really a question now of whether we can maintain the lessons and go forward and make real progress on vehicle efficiency.”
Some perspective. The era of conservation and car pooling came out of the fuel crisis of the 1970s — only to be followed by the go-go gas guzzling 90s — the era of the SUV.
In Washington, I’m Hillary Wicai for Marketplace.