One good (?) thing about the droop in the economy is cheaper gas at the pump. A lot cheaper, it is 80 cents/litre now, was up to $1.40 not that long ago. Crude prices went from a forecast of over $200 a barrel to a reality of less than $70. It is good that it's cheaper to fill my car, but also means that all those SUV's and trucks that were supposedly being sold as gas guzzlers are on the market again. Not that gas prices have a huge effect on driving habits - we might downsize our car, or park the motor home, but I doubt most are willing to change their habits much. If gas bounces back up 50% to $1.20, I'm not about to buy half as much, or take the bus twice as much.
Price is not likely top stay this low for long. I think that the drop was mainly due to lower demand from a weaker economy, and oversupply. Lower energy costs will help stimulate the economy, pushing prices up, and OPEC has dropped production. In September they agreed to cut back by 1.5 million barrels a day, about 5% of the September total target. And of course, as price of crude rises again, our Canadian tar sands projects will be more cost effective.
Another good thing is that the nonsense of corn based ethanol has been exposed. Eric Reguly of the Globe and Mail writes on November 3/08:
Cheer up. The market crunch has produced some good news too. Here's one: The ethanol producers' lush, green fields are turning into Death Valley. An industry that should never have thrived is getting its comeuppance.
The scientific, environmental and fuel-security arguments made by the ethanol industry were always, at best, dubious, at worst, wildly and dangerously exaggerated.
But Big Ethanol had one thing going for it - a torrent of cash from taxpayers and investors that proved irresistible to Bill Gates and other high-profile investors and funds.
Read the full article at globeandmail.com: Ethanol producers' unworthy heyday finally over.