Gas prices in Texas are looking pretty great these days. The average price per gallon in the lone star state in $1.59. But we’re seeing prices as low as a $1.53 in San Antonio, $1.44 in El Paso and $1.39 in College Station.
Too good to be true? Possibly. But maybe there’s a new economic reality when it comes to oil. Jeffrey Weiss, who covers the energy industry at the Dallas Morning News, has asked the multibillion-dollar question – is this the bust before the next boom? Or are we just busted?
Weiss recently attended the IHS CERAweek Energy Conference. He says professionals there seemed to be hopeful that the current lag in oil prices were part of a larger cycle.
“If you had a drinking game using the word ‘cycle,’ you would need detox. Most of them were certain we were simply in a cycle,” Weiss says. “They were all very sure they knew there was going to be an up. Maybe, maybe not.”
He says that in the long term, it likely is part of a larger cycle – prices wax and wane over time. But Weiss notes that major changes in the way that oil and gas are produced are likely to have a lasting effect on oil prices. Most notably, the process of extracting shale gas.
“The fact that shale is accessible and getting even easier to access, the efficiency of extraction is going up,” Weiss says. “Anything you thought you knew a about shale five years ago, is pretty much as if you’re taking about DOS. Its gotten that much better that fast.”
Another factor is renewable energy. As as the technology continues to improve, renewables will likely cut into oil prices in the long run.
“Renewable sources aren’t stopping,” Weiss says. “As they continue to develop, that will, in the long run, depress the demand for fossil fuels. So even that may mitigate for lower oil and gas prices in the long long term.”
Weiss says it’s hard to know exactly how long prices will continue to stall. Even though some supply has been cut and prices have edged slightly up in the past few months, there isn’t much of a timeline for when the industry will rebound. The good news? Savings for consumers.
“It’s going to cost us less to fill up our gas tank, or frankly, maybe less to buy anything where transportation is needed,” he says, “which is almost everything.”
Listen to the full interview in the audio player above.