NewsFlash: Oil and Gas Price Tumbling

NewsFlash: Oil and Gas Prices Dropping

Unless you've been living under a rock for the past year or so, you've probably noticed something happening at the pumps. Every week those numbers lit up on the signs seem to be ticking ever downward. Why is that? What does it mean for you and me? What does it mean for energy in the future?

Tumbling Prices

Since late in 2014 prices of crude oil around the world has been dropping steadily, and at times erratically fast. If you talked to those in the lower-level oil and gas jobs in 2014 you would have heard that "this will go on forever." The belief was supported by the people steering the ships, though the writing was certainly on the wall well before fall 2014. 

Anyone who has worked in oil and gas for many years will be able to tell you one things about the market: Enjoy the boom times, because there will be a bust. Though this seems to many of us too young to remember the 1970's, the oil and gas market is anything but secure when you consider that this is the fourth oil price crash in the last century. This may be based upon our age but also because of the general economic panic that has been present in the lives of those, myself included, who came of age during the 2008 world decline. Today, we see the same emotive sentiments reflected in the massive cost cutting, job cuts, and pullbacks in investment for oil and gas operations nationwide. 

While these trends are certainly frightening for oil and gas employees and welcoming at the pumps, it's also shaping how energy in this country is produced in the future. It's a household idea that when prices for gas go up the average person buys smaller cars, drives less, and generally makes choices with this consideration in mind. Now that prices are falling, one would think that in the converse we would all start guzzling gas and slip back to our general mindset of endless oil. While there may be truth to these trends on the level of the individual consumer, this time around the energy industry itself may not be offering up the same business as usual. 

Make Room For the Alternatives

Despite the drop in prices last year, this country saw a record amount of energy being generated through solar and renewable sources generally. Reports are being published all the time showing a marked decline in the use of older energy sources like coal due to the continual rise of renewables, but the same drivers aren't at work in this context. Aside from the electric vehicle market, renewable source generators are largely separate from the forces that are pushing down oil prices. Still, many within the alternative energies industry are waiting out the weather of the energy price decline as well, but they're banking on increased share of the market when investment starts flowing back in. For the time being though they are happily taking those jumping from traditional oil and gas positions. At this point we can take it as a good sign that renewable sources are still maintaining and increasing in prevalence throughout this time, because when investment does start to tick back up they will be well poised both financially and in the minds of those of us who will be adopting their use.