By Clint Wilder, Senior Editor, Clean Edge
The recent dramatic plunge in oil and natural gas prices, to their lowest level since the global recession in 2009, has some observers worried about the effect on clean tech. Conventional wisdom has it that renewables have a tougher time competing when fossil fuels are cheap, making grid parity (in the case of natural gas-fired electricity) more elusive for solar and wind power.
But could it be that the current environment – with gasoline at less than $2 a gallon in much of the United States – is actually a good time to double down on policies to move away from fossil fuels to more renewables and efficiency?
That’s the conclusion of a special report on energy in the January 17 issue of The Economist headlined “Seize the Day.” “The fall in the price of oil and gas,” writes the venerable magazine that dates back to 1843, “provides a once-in-a-generation opportunity to fix bad energy policies.” Chief among these policies are fossil fuel subsidies, at least some of which were born out of decades-old governmental fear of oil scarcity and soaring prices (I’ll let others debate how many came from mere lobbying power). The Economist calls fossil fuel subsidies a “rathole” which swallowed an estimated $550 billion from governments across the globe last year. “Falling prices provide an opportunity to rethink this nonsense,” the magazine continues. “Why should American taxpayers pay for Exxon to find hydrocarbons?”