Oil is priced at $37/barrel today, over $100 less than the high it hit last summer when it flirted with $150. The soaring price gave us $4/gallon gas and generally freaked everyone out.
High-priced oil was a boon for renewable energy though. Investment money poured into solar panel developers, biofuel startups and other green tech businesses. People abandoned SUVs and embraced small fuel-efficient rides and started taking the bus and train in record numbers.
When the global economic depression starting coming on last year, the price of oil bottomed out, falling to as low as $32/barrel around Christmas time.
Here are a few of the winners and losers in the face of cheap oil.
Oil sands are dying
Low oil prices means oil sands are too expensive to process, a win for the world and a loss for energy executives and a handful of bulldozer drivers*. Canada has a vast reserve of oil, said to contain half the energy of Saudi Arabia, but it's made up almost entirely of oil sands, which is exactly what it sounds like. Imagine a box full of sand. Now add tarry oil and mix well. Getting the oil out of the sand is expensive, energy intensive, dirty, and uses and pollutes a ton of water. If you thought mining coal was bad (and it is), you'll flip over coal sands, which is even worse. $30ish/barrel oil means that the costly process of oil sands processing doesn't make economic sense. Projects are being put on hold and cancelled all over Canada.
*I'm being glib. Our path to a green energy system needs to include the transition of displaced fossil fuel workers into green jobs. Losing your jobs sucks no matter what the reason for losing it, and we should make sure everyone wins as we make the jump to clean energy.
Alaska is broke
Sarah Palin is hurting right now. Her first two years in office were spent running a state flush in oil revenue. Up to 90 percent of the state budget is paid for by fees generated by oil money, which was awesome when it was $140/barrel but potentially crippling at sub $40. They are tapping into reserve funds to cover for gaps in the budget and could be forced to make some hard cuts if oil prices stay low.
Hybrid sales are down
You have to give credit to Americans for one thing: We love to play chicken with history. Showing the memory capacity of your average goldfish, Americans started to abandon hybrids for the huge muscle bound embrace of SUVs when the price of gas started slipping past $3 a gallon on its way to sub two. Luckily (said with tongue firmly planted in cheek), the drop in hybrid sales is being offset by the fact that no one has any money to drive around in anything these days.
Green energy investment drying up
Cheap oil is killing profit margins on renewable energy technology and depressing projects all over the world. When you add in the overall market depression and the tightening credit market, you get an atmosphere that's not very conducive to investing in new green energy technology.
My bank account is marginally happier
OK, so I'm an imperfect greenie. I love cheap gas. I know it's bad for me, but it's so much easier on my wallet. Al Gore hates me.