The drop in fuel prices has penetrated the nation’s overall economy, sinking below $2 a gallon for the first time since March 25, 2009, according to Money Morning, an online investment research publication. Money Morning’s AAA report showed the “average price at the pump has dropped a record 117 consecutive days.” John Brown University students and faculty have varying opinions concerning the benefits of lower gas prices.
JBU student and car owner Anna Maclachlan said lower gas prices enabled her to go to Georgia and Florida for Christmas break— something she could not have done otherwise.
“I was able to see more family,” she said. If prices stay low, Maclachlan anticipates affording another road trip.
Not all students see the low gas prices as a positive trend. Renewable energy engineering major Gabriel Luciani
De Pas said the low gas prices make people less interested in investing in renewable energy. When prices are cheap, the public loses drive to continue developing the technology needed to create biodiesel fuels, he said.
Randall Waldron, professor of international business and economics at John Brown University said that overall, lower gas prices are healthy for the nation’s economy. He said that on the other hand, high gas prices have had a strong negative effect, resulting in the economic downturn in the 70s and 80s.
“Therefore we know what very high gas prices can do,” he said.
However, Waldron said there are important drawbacks to the lower prices.
Waldron said that the suffering of suppliers will specifically hurt the economy in states that are big energy producers. Lower salaries and layoffs could easily result from the falling prices, he said.
The New York Times reported that contract rig company Helmerich & Payne recently announced a plan to idle up to 50 U.S. rigs over the next weeks.
Helmerich &Payne is not the only company to suffer.
Reuters Business and Financial News reported that “more than $150 billion in oil exploration projects have been shelved for 2015.”
Another drawback, according to Waldron, is that the market does not respond well to uncertainty.
Waldron stated that the economy cannot depend on these prices. “They will return to their long- term average,” he said.