The price of gasoline, which hovered above $3 per gallon not long ago, has dipped beneath $2 a gallon at an Exxon gas station in Gainesville, the Washington Post has reported. The relief from high prices is certainly welcome. But no one should be deceived that the era of cheap gasoline is returning for any length of time.
One of the reasons that gas prices soared so high is that uncertainty over petroleum supplies prompted businesses up and down the global supply chain to hold higher inventories. As fears of supply disruptions subsided, businesses have lowered their inventories, creating a temporary glut on the market. By all means, let’s enjoy the respite while it lasts. And let us hope that it takes a year or two before prices return to $3 per barrel.
But the fundamentals remain intact: Global petroleum consumption, led by China, India and the United States, continues to climb. Global petroleum supplies have peaked. Old, cheap oil is being depleted, and it’s being replaced by new, expensive oil. The recent discovery of a new oil basin in the Gulf of Mexico won’t change anything. The oil find will take years to exploit and, because the oil resides in very deep water, it also will be very expensive to extract.
Virginia still needs to prepare for an expensive-energy future. That means embracing new forms of energy, and it means conservation. To be meaningful, conservation must entail more than installing energy-efficient light bulbs. We need to evolve towards a more energy-efficient transportation system and human settlement patterns.