Carl Campbell, editor of Carl’s Climate Letters, tells Don Corrigan that gas prices will continue to nosedive. He says the era of fracking is over due to the collapse of oil prices.
By Don Corrigan
All gassed up, and nowhere to go. That’s a common refrain right now. Gasoline is cheap, but concert sites, sports stadiums, and amusement parks across the country are shuttered, thanks to the worst pandemic in America in over 100 years.
Gasoline prices in the Webster-Kirkwood area are hovering between $1.60 and $1.70 per gallon. Some stations in the St. Louis area are offering gas at $1.50, a far cry from the $4 gasoline that was familiar in the Bush years of the 1990s.
With gas prices this low, many residents might be expected to make plans to hit the open road as the weekend approaches. But now Americans can’t take advantage of cheaper fuel. The majority of the country is staying home in an effort to slow the spread of the coronavirus.
The national average for a gallon of gas was a $1.883 last weekend, according to the data from the American Automobile Association (AAA). That average will slide down farther in the weekends to come.
“Given where oil prices are now, I would not be surprised if we are looking at gas at a $1.25 per gallon by summer,” said Carl Campbell of Webster Groves. “It’s interesting to watch and it’s unprecedented.”
Campbell is a retired investment analyst focusing on petroleum and other fuels. He said the industry, which he spent a lifetime studying, is in for a rough ride as consumers are staying put with their concerns over highly contagious coronavirus.
“Most of my life, I did investment research in petroleum industries,” said Campbell. “My specialties were in recommending investment opportunities in oil and gas and I even authored a newsletter for that. Back then, I was working for a brokerage firm and was required to read a lot of science and economics in the energy sector.”
Campbell said the only disruption in the energy sector in his lifetime, that approaches the trauma of these past few weeks, is the oil embargo by Middle East countries in the 1970s. He said that was a frightening period.
“But this is completely different,” said Campbell. “This is not an embargo sending gas prices through the roof. This is a glut. There’s no demand. The bottom is dropping out. And it’s going to be that way longer than anybody can anticipate.
“We are going to see some oil companies go bankrupt,” said Campbell. “There will be more consolidation and some familiar names in oil and gas will disappear. On the world stage, oil producers like Saudi Arabia and Russia will suffer – especially Russia because it costs a lot of money to extract the oil that it produces.”
Local environmentalists will not have worry about the fracking industry getting closer to the St. Louis area with designs on Ozark areas in southern Illinois or southern Missouri. Campbell said he thinks fracking for oil is dead, even though it is credited for making America energy independent in recent years.
“Fracking is going to get killed by this, because we are not in a temporary situation. Low demand for oil is here to stay for a while,” said Campbell. “Fracking has never been ideal. It is capitally intensive and its sources for oil run out too quickly.”
In spite of the anxiety brought on by the current health scare and the turmoil in markets such as oil, Campbell said he thinks local residents are taking some comfort in eyeing the prices posted at the pumps at local mini-marts, the Shell or the Clark station.