This Editorial appears in the May 6 print edition of Transport Topics. Click here to subscribe today. Once again, the fuel price snake has turned its head and for nine weeks now has been favoring truckers and motorists with some relief. But we’re all experienced enough — or should we say skeptical enough — to know that the relief is surely short-term. Or is it?
We have all learned not to trust the ups and downs of what we could call the fuel spiral because, in the end, we have to expect that prices will eventually end up rising. Fuel prices don’t really go up and down, they just sometimes follow a circuitous path in their never-ending journey skyward.
At least that’s the way it’s been for the decades since the first oil embargo that shifted the power from the consuming Western nations to the oil-producing states centered in the volatile Middle East.
And now comes the fracking wave, which is apparently going to turn the United States into the Saudi Arabia of natural gas in the not too distant future.
That vast reservoir of fuel is sure to have some wondrous effects on our lives. As long as we can extract, process and transport the rivers of natural gas safely and without seriously harming the environment, the clean-burning, affordable and readily available supply could help reshape our economy.
Several analysts have recently speculated that this ocean of U.S. natural gas is likely to quickly force global oil prices down to around $50 a barrel, about half of what we pay today.
This shift to natural gas is, of course, not without its own costs: Just ask anyone who’s priced a Class 8 truck with a natural-gas engine in it.
But it now appears that just the “threat” of all this natural gas coming to market is likely to lead traditional oil producers to begin slashing prices in fear of the coming competition from the United States and other oil-poor, but potentially gas-rich, nations.
This alone is cause for celebration in the trucking industry and may signal the start of a new paradigm for those who have been at the mercy of the oil-producing cartel for way too long.
Unfortunately, this current — and no doubt temporary — round of falling fuel prices appears to result from falling demand, owing to the slowdown in the global economic recovery and not from the specter of U.S. natural gas. But we may be on the cusp of a new pricing reality for fuel. And this new age can’t come soon enough.
