It’s Smart to Buy Hybrid Cars Even When Gas Prices are Low

I’m sure you’ve all read or heard people on TV saying that hybrid and electric cars won’t really catch on because oil prices are so low right now. Most of the time the comment goes unchallenged — which is really irritating for a number of reasons.

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If you’re in a polite or reasonably polite conversation on the subject, and someone tries to get away with saying that, remember this little tidbit on OPECs dissatisfaction with current oil prices, brought to us by Bloomberg:

OPEC, supplier of more than 40 percent of the world’s oil, may cut production at a meeting next month if prices and markets are unstable, Iraqi Oil Minister Hussain al-Shahristani said.

“If demand is going to stay down as it has done, then obviously we will need to cut production,” he said at a conference in Doha, Qatar today.

Forbes (via the Associated press) has a little more of al-Shahrisani’s quote:

“At $40 per barrel, very few investors will be willing to invest in developing oil fields,” Hussain al-Shahristani told reporters on the sidelines of a conference Doha, Qatar. “And that’s going to create a big shortage in the world supply, which is not healthy.”

So when someone says something vapid, like “Oil prices are at record lows and there’s no way people will buy hybrid cars,” try not to hyperventilate. Be calm, remember the above and “gently” remind the person that in January, Arabian Business.com quoted OPEC’s target per barrel price at $70. That’s about $2.50-$2.80 for a gallon of regular gas, looking at GasBuddy.com’s historical price charts.

Find a way to work the following into the conversation. Demand and prices drop during a recession. OPEC and the rest of the oil producers are worried about it. They’re also worried about how industrialized countries are moving away from a dependence on foreign energy sources. They’re not panicking, because they’ve seen this before. The Oil Crisis of the 70’s hurt them politically, but they’ve done quite well financially ever since. They’ve seen and heard all the rigmarole about saving energy come and go.

Then say there’s something about this recession cycle that has to be unsettling to oil producers. They have little to guide them when the world economy starts to pick up again. The technology is already in place to cut demand permanently by a few percentage points. Low prices are putting pressure on Arabian governments that use oil money as transfer payments. They see an American President intent on creating jobs in alternative energy, and by extension reducing more demand. Global warming is not fiction (unless you write a conservative column for the Washington Post), and the rest of the world is worried and willing to do something about it. And if Iran’s Ahmadinejad isn’t a reason to go green, then nothing is.

And with that, you should be fully equipped to tangle with those who think cheap oil is an excuse to do nothing. Cheers!

Image Credit: Indigoprime’s Flickr Photostream under a Creative Commons License

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