This editorial will appear in tomorrow’s print edition.
The recent plunge in gas prices has the feeling of a return to normalcy. It’s anything but.
Prices have actually cracked the $2-a-gallon mark at a few South Sound gas stations; they’re well below that in some parts of the Midwest. Spotting a "1" in first place on the big placards – as in "Regular: $1.99" – feels like a trip down memory road. All’s right with the world again, if only at the pump.
The price drop may be unprecedented. Just a few months ago, a gallon went for well over $4 – roughly twice as much as today’s cost.
It’s having three spectacularly good effects.
Many Americans of modest means had been nearly priced out of the vehicles they needed for work and essential errands. Some who’d lost their jobs couldn’t afford the gas needed to look for new ones. Cheaper gas is a godsend to the poor.
The dramatic fall is also the functional equivalent of a major stimulus package. With the economy faltering, consumers now have more discretionary cash in their pockets. It’s got to help.
Another sweet side effect: The underlying collapse of petroleum prices is hurting the bad guys. For some perverse reason, dictatorships and Middle Eastern monarchies are sitting on top of most of the world’s oil reserves. Their income depends on energy sales.
Several of the dictatorships – Iran, Venezuela, Russia – are chronic troublemakers. It’s nice to see them forced to cut their mischief budgets.
But, as is often the case in economics, the upside has a downside.
For starters, lower petroleum and natural gas costs – combined with tightening credit – have put a kink in what had been aggressive efforts to develop solar power, cellulosic ethanol and other renewable forms of energy. That’s the future, and the sooner we get to it, the better.
Also, painfully expensive gasoline was teaching this country to conserve fuel. Americans had finally started asking themselves, "Is this trip really necessary?" The U.S. Department of Transportation found that motorists drove 15 billion fewer miles in August 2008 than they had in August 2007.
The slackening demand, compounded by the worldwide economic troubles, pushed prices down to where they are today.
The threat now is that Americans will be too quick to forget what they’ve just been through. If they abandon their newfound frugality with gasoline, its price will start shooting right back up again.
The realities that drove gas up to $4 a gallon aren’t going away. Petroleum remains a finite resource. China, India and other "tiger" economies are going to thirst for it again. Americans shouldn’t get too used to $2-a-gallon gasoline, because it’s probably paying us an all-too-brief visit.
If we think of $4 as the norm and conserve accordingly, it’ll take longer before we see that ugly price again.