http://www.ft.com/cms/s/0/6c815670-cf97-11dd-abf9-000077b07658.html

“The plunging oil price is like a dangerously addictive painkiller: short-term relief is being provided at a cost of serious long-term harm.”

Cheap oil “throws into doubt the economics of forms of generation that compete with gas, including nuclear, renewables such as wind and solar, and coal. Cheaper oil and other forms of energy also weaken the incentive for businesses and consumers to use fuel more carefully. Jesse Toprak of Edmunds.com, a US motoring website, says petrol at $4 a gallon meant a hybrid petrol-electric car would pay for itself in two or three years. Below $2 a gallon, the payback is typically seven to eight years. Having hit a peak of $4.10 in the summer, petrol now sells for $1.66.”

“If the investments in energy supply are not made, then supplies will be tight, and prices will soar again – quite possibly even higher than they went last summer. Al Romig of Sandia National Laboratories, a US government national security research centre, argues that price volatility is one of the most serious obstacles to developing alternatives. Suppliers, he says, may have an interest in keeping the price high ‘and then [dropping] it to $10 per barrel, because when the oil price falls like that, the economics of any of these alternatives … turn against you, and you walk away from it’.”

Only Chuck Schumer can be happy about this. I’ll be he’s looking forward to another Sunday Nighter on oil company “gouging” three years from now, while laughing at the schmucks who ride the subway.