The price of oil has tumbled in recent months as US fracking greatly increases the soaring supply at the same time as the global economic slowdown is reducing demand. The end result is lower prices at the pump.
Everyone is happy with the falling prices at the fuel pump. However there is a down side. As the gap between the cost of green energy and the cost of fossil fuels widens, California energy prices will have to rise.
The VC funded green energy companies and CARB were banking on sharp increases in fossil fuel prices to make wind and solar energy more competitive. High fossil fuel prices are needed to attract the huge amount of investment required to build more renewable power plants. These plants are essential to California reaching the green energy goals set by Governor Brown and enabled by CARB.
As the economic case for green energy collapses with the fall of fossil fuel prices, California’s environmentalist are going to demand more subsides to for green energy, so it stays competitive. Who is going to pay these subsides? You the energy consumer.
So, as the price of gas and diesel falls at the pump, remember your electric natural gas bills are going to take hit. That is the down side of falling oil prices.