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February 29, 2016

Are Plummeting Oil Prices Killing Clean Energy?


We've watched it for months now: the price of oil is plummeting. CNN Money reports that six states are currently charging a little over $2 a gallon for gas. And according to Tom Kloza, Chief Analyst for the Oil Price Information Service, "About one station in four nationwide is at $1.50 a gallon or less."

Americans haven't seen prices like this in seven years. And no one is complaining.

While cheap gas may be easy on the pocketbook, we rarely stop to think about the impact it's having on replacing carbon-emitting fuels with solar, wind, natural gas, nuclear, and hydroelectric energy. This week on The Costa Report, five-term Senator of New Mexico and former Chairman of the Energy and Natural Resources Committee, Jeff Bingaman, raised concerns about whether alternative energy will remain a priority. "It's hard to get them (consumers) interested in cutting their use of fossil fuels when gas is so cheap," said Bingaman. Gal Luft, Co-Director of the Institute for the Analysis of Global Security echoed Bingaman's sentiment, "With the collapse of oil prices... America's commitment to wean itself from petroleum has gone by the wayside."

That said, in 2008, when oil hit $145 a barrel, politicians and the media couldn't stop talking about energy independence and renewable sources. Once experts started warning that prices could jump high as $200 a barrel, oil became a matter of national security, as well as an environmental emergency. The world's carbon footprint was beginning to produce super-storms, glacier melting, droughts and wild swings in temperatures the likes of which have never been recorded. Overnight, the need for a comprehensive national energy policy shot to the top of the public's concern.

But take note. In the 2016 Presidential race, energy isn't even on the docket. To date, not a single energy question has been posed to Democratic or Republican hopefuls in the primary debates, nor have any of the candidates raised the issue on their own. And rightly so. Americans no longer feel the pain at the pump and the general feeling is that the problem has been solved.

But for how long?

Since 2014 America has doubled it's domestic oil production by freeing federal lands, allowing horizontal drilling and fracking, etc. At the same time, domestic production was ramping up, a glut of cheap oil from the Middle East hit the market. Rebels began dumping oil to fund insurrection and terrorism, and OPEC started losing control of its once firm grip on supply and pricing. And in no time at all, there was plenty of oil to go around. So much that the most powerful commodity banks in the world – banks like Goldman Sachs - began cutting their short and long term forecasts. They now claim oil will continue to "hover" around $40 a barrel.

How will $40 a barrel affect other sources of energy?

Late last year, Richard Branson - known for forward thinking - warned that cheap oil posed a real and hidden danger. "If oil goes down to $30-$40 a barrel, then it will make it much harder for clean energy.... Governments are going to have to think hard how to adapt to low oil prices.". This week, Microsoft founder Bill Gates joined Branson and other leaders who are concerned about the effect crude prices will have on America's commitment to renewable energy. "Time is NOT on our side.... We need a massive amount of research into thousands of new ideas—even ones that might sound a little crazy—if we want to get to zero emissions by the end of this century... It took four decades for oil to go from 5 percent of the world's energy supply to 25 percent. Today, renewable energy sources like wind and solar account for less than 5 percent of the world's energy. We need to get started now!" Bingaman agrees, stating that a comprehensive national energy is the key to preventing future knee-jerk reactions to fluctuating oil prices. "The only antidote is to get agreement on public policies that will continue to move in the direction of less greenhouse gas emissions, and we don't have that consensus in this country yet," observed Bingaman.

While energy may not be front and center of the 2016 political season, Bingaman, Branson and Gates shed light on the danger cheap oil poses when there is no clear energy policy or road map. America is long overdue for a national energy plan – one that immunizes clean energy and the goal of energy independence, from prices at the pump.


Interview with Jeff Bingaman
Week of Feb 22, 2016  Jeff Bingaman

Jesse "Jeff" Bingaman, Jr. is a former United States Senator from New Mexico. As a member of the Democratic Party has served as Chairman of Committee Outreach for the Senate Democratic Caucus. Bingaman was elected Attorney General of New Mexico in 1978, and in 1982 was elected to the United States Senate. Bingaman has held several committee assignments during his tenure including, The Energy and Natural Resources Committee, Finance Committee, the Health, Education, Labor and Pensions Committee, and the Joint Economic Committee.  








 
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