Oil has fallen below $60 a barrel for the first time in more than five
years – a fall of 44 per cent since June. That should benefit the
average guy but there will be a fallout that might ensnare him because
nothing in an economy can be isolated. For example, high yield bonds
linked to oil companies are linked to oil prices, so they may be
imperiled. The falling prices could damage the North Sea, marginal
drillers and fledgling fracking industries.
Green energy technologies such as solar and wind had been banking on sharp increases in fossil fuel prices to make them increasingly competitive and help to attract the huge amount of investment required to build renewable power plants.
There are clear advantages to most with oil cheaper. With oil prices low, there will be a great improvement in travel and home energy costs, manufacturing costs and agricultural overhead.
But where will these savings go? Those savings will likely be diverted into the pet projects of the crony capitalists, their government employees and their supportive ideologues. As the gap between the cost of fossil fuel power and renewable power gets bigger, investments in these areas will be less attractive. So extra subsidies will be necessary. Those subsidies will probably come from households in the form of higher energy bills. So the cost of energy will go down but we average guys will not see it.
Green energy technologies such as solar and wind had been banking on sharp increases in fossil fuel prices to make them increasingly competitive and help to attract the huge amount of investment required to build renewable power plants.
There are clear advantages to most with oil cheaper. With oil prices low, there will be a great improvement in travel and home energy costs, manufacturing costs and agricultural overhead.
But where will these savings go? Those savings will likely be diverted into the pet projects of the crony capitalists, their government employees and their supportive ideologues. As the gap between the cost of fossil fuel power and renewable power gets bigger, investments in these areas will be less attractive. So extra subsidies will be necessary. Those subsidies will probably come from households in the form of higher energy bills. So the cost of energy will go down but we average guys will not see it.
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