Possible bad side to low gas prices
Gas prices have plummeted in the past few months. Idaho has the 9th lowest average gas prices in the nation right now. The national average is $2.09. Idaho’s average is a $1.92.
Many folks are recalling the good old days when they could fill up their cars with a $20 bill. But is this something that’s too good to last?
The reason gas prices are down is because the cost for a barrel of crude oil is down.
“There’s simply more than can be used,” said Dave Carlson, AAA of Idaho director of public and government affairs. “We’re given to understand that it’s sitting in stockpiles around the country. It’s just expressed itself by being passed on at the pumps.”
But some are concerned about Saudi Arabia and other countries that are part of OPEC, the Organization for Petroleum Exporting Countries. The concern is that the countries are lowering prices so low they could put other forms of oil in jeopardy.
“Your heavier oil, like your shale oil, and from oil sands and things like that which come from Alberta is quite a bit more expensive to refine.” said Dan Cravens, regional economist with the Idaho Department of Labor.
Cravens said he heard of the theory about Saudi Arabia, and said those concerned about the low prices say they could cause oil producers in North America to cut back on jobs.
“We have a lot of Idaho residents who work, at least part of the time, in North Dakota in the oil fields there,” Cravens said. “I would suspect we would find some of those individuals coming back to Idaho to look for work again.”
But Carlson disagrees with the theory, saying OPEC countries are suffering because of these lower prices.
“Saudi Arabia and OPEC countries generally need to be covering a cost of about $70 a barrel or more,” Carlson Said. “Since their budgets are largely built on the cost of oil, they’re the ones that are feeling some extreme pain now.”
While they experts may disagree on what potential problems the gas prices could cause, they do agree on this: the gas prices are going to stay low for a while, so we can all drive around in our cars with our wallets a little fatter.
