Dec 03 2014
If you drive, you may have noticed that these days, filling your gas tank has gotten a lot cheaper. This week, the average national price for a gallon of gasoline fell to $2.77 and the cost of a barrel of U.S. crude oil has fallen almost 40 percent compared to its peak in June. The lower oil prices have already had tremendous effects on the US and world economy.
While consumers may be celebrating at the gas pump, other countries despair. In Iran, lower prices will seriously impact the economy which has already had to reduce its oil exports due to US-imposed sanctions. In Venezuela, social programs which are funded by oil exports are likely going to suffer. And, OPEC member countries will see their annual revenues shrink by $590 billion, while the American, Japanese and European economies will experience substantial economic boosts with lower rates of inflation.
For environmentalists, the bad news is that gas guzzling SUV sales are once more on the rise. But, lower oil prices may lessen the urgency of the Keystone XL pipeline project, and possibly help its cancelation.
But why are prices falling in the first place? According to experts, US production of shale oil through controversial practices like fracking, has resulted in greater domestic oil supplies. This, along with decreasing demand for gas among an aging population and more fuel efficient cars may be why oil is so cheap.
GUEST: Michael Klare, Pprofessor of Peace and World Security Studies at Hampshire College and the author of “The Race for What’s Left: The Global Scramble for the World’s Last Resources.”
For more information on our guest, go to www.michaelklare.com
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