While people worldwide are extremely happy that oil prices have been showing trend of constant decline, half less than they were this summer, this could be very bad news for development of renewable energy sector because these options now, given the current oil price do not look to be economically acceptable. While oil prices were skyrocketing, more and more people were looking for alternative options like ethanol, electric cars, solar power and wind. Current oil prices are again on moderate level, and all alternative solutions will have very hard time competing against oil and that could slow down development of renewable energy sector worldwide. Public interest for those energy sources is already falling.
However, even if oil prices continue to sink alternative energy sector still has one major advantage – rising global warming problem, or to be more precise – awareness of global warming. Fossil fuels such as oil are by most researches responsible for global warming phenomena, and if countries worldwide continue to use those energy sources impact of global warming will continue to climb. Of course answer against this is renewable energy sector, and ecology should still get on top of moderate oil prices and boost investments to renewable energy.
On the other hand market has come to a point where it is impossible to predict anything, including of course oil prices, and there are many people worldwide believing how oil prices will significantly rise on the long run, after all you must still remember summer predictions how oil will soon reach $200 barrel mark. And there is only this perception that oil has now become cheap which is anything but true. Oil may look cheap to us compared to summer oil prices, but oil is still far from the time when for many years crude rarely cost more than $30 per barrel and often cost much less, at some time even below $20 mark. For instance, $60 was considered alarming when oil first cross that threshold three years ago.
Why is oil falling? Because of the same reason as the stock markets worldwide, namely fear of recession. Economy dictates prices and if economy is slowing down so is the demand; less demand means of course lower prices. Because of this there are many people believing how this is the repeat of the 80s when recession caused huge collapse in oil prices. And if the fear of global recession continues don't be surprised if oil prices fall down even to $20 per barrel, because interest in energy will be put to side by recession fear.
It is impossible to predict what oil prices will be next year, heck it is impossible to predict oil prices for the next week, but most experts believe that extremely high or extremely low prices if happen won't stay too long, and that oil prices will be somewhere in range between $50 and $100.
And while fear of global recession continues renewable energy sector won't see any significant improvements, because there will be fewer funds available and because renewable energy sector still looks like too expensive solution where it is much cheaper to burn fossil fuels in order satisfy need for energy. Environmentalists and different renewable energy experts are worried that current situation will mean dropping the alternative energy idea for some better times, when this financial crisis ends. And this could of course be very long time given current proportion of this global financial crisis. Only real hope is fear of global warming and climate change but the question that is being rightly asked from many environmentalists is what does world fear more, global warming or global recession? So far it is economy all the way with constant money injections to financial sector worldwide. How long will renewable energy have to wait to get back on track? A month, year, couple of years? This is the question that still awaits its answer.
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