Future oil crash would be good news for consumers, bad for enviros

It may seem like a stretch given our recent price history and the looming economies of Asia, but what if we see a return to sustained $30 oil?
If you can overcome the geography mistake (this blog knows Henry Hub is in Louisiana, not Oklahoma), Paul Sterne writes over at GroundReport that the shale gas boom, new oil fields in Iraq, Saudi Arabia, Brazil and Ghana, and the renewed interest in nuclear here and overseas will all help push and pull oil prices down:

To get a sense of where the future energy price equilibrium will be, consider that natural gas is selling for $5.09 MMBtu at the Henry Hub in Oklahoma. This compares with a global price for natural gas of about $13.00 MMBtu, according to the Energy Information Administration, Department of Energy. $13.00 per MMBtu only makes sense as an energy equivalent of crude oil which currently sells for $76.00 per barrel (the energy content of a barrel of crude oil is estimated at 5.8 MMBtu; 76 divided by 5.8 = $13.10).
[snip]
In energy markets, there is always a rush to the bottom in terms of price. That means that natural gas is going to start setting the global price of energy. When the Saudi Oil Minister says that crude oil prices are ‘perfect’ and the Mexican Finance Minister is buying a hedge at $57.00 per barrel for the entire 2010 production of Pemex, it is certain that crude oil prices are under downward pressure. Based on the spot price at the Henry Hub, crude oil is headed back toward $30.00 per barrel.

Cheap oil means cheap gasoline and thus makes it much tougher for electric vehicles and biofuels to compete. That’s why it was a couple of green car-related blogs that I first found this item on.

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