Cheap oil bad for renewable energy
TEXT OF STORY
Bill Radke: Oil dependent countries are quaking as the price of a barrel of crude drops and drops. This morning, OPEC oil ministers meeting in Vienna agreed on a big production cut — 1.5 million barrels a day starting next month. But oil is still trading below $63 a barrel this morning compared to $147 this summer. That might sound great as you watch the price of gas fall below three bucks, but as Sarah Gardner reports from the Marketplace Sustainability Desk, as oil goes, so goes renewable energy.
Sarah Gardner: The global credit crunch has already stalled some renewable energy projects. And the falling price of oil and gas undercuts the incentive to start these projects in the first place.
Kevin Book at FBR Capital Markets says take natural gas prices. They have to get pretty high for say, wind power, to look affordable.
Kevin Book: You have to get up into the $9 to $10 range, just to make a wind project with the federal subsidy work.
This week, natural gas prices ran below $7 per thousand cubic feet. Falling energy prices can also dull the public’s sense of urgency about cutting their own energy consumption.
But Ethan Zindler at New Energy Finance foresees a new frugality:
Ethan Zindler: I’m dubious that a drop in the gasoline price, even by a dollar, is going to convince Americans to truly return to carefree spending ways.
Long-term, analysts predict, oil prices will head back higher anyway, making renewables more attractive again.
I’m Sarah Gardner for Marketplace.
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