Lower Gas Prices: Can this be Bad?

http://www.patriotledger.com/business/x1881115149/Gulf-Oil-CEO-says-lower-gas-prices-ahead

According to the linked article, Gulf Oil chairman Joe Petrowski said that it's possible that oil could be trading for around $20 per barrel and that gasoline could sell for around $1.00 a gallon at the pump by "early" 2009.

While I would love to see gas go to a buck a gallon, it actually wouldn't be good for us, for the following reasons:

1) The US automakers (if they survive) are now heavily invested in alternative fuel cars. I believe it is in our best national interest to push these programs forward and offer these alternatives to gasoline or even diesel powered vehicles. Unreasonably low fuel prices will cause us to take our "eye off the ball" just like we did after the 1974 oil crisis. The United States needs to become a leader in economical vehicle construction. I should point out that the fleet MPG for GM is actually lower than the fleet MPG for Toyota. IN FACT, American-made cars made to sell in Europe compare favorably to their European counterparts. The problem is the American car-buyer wants a BIG car. On the non-automotive side, heating oil and gas being cheaper will be a welcome relief to people on fixed income, but at the expense of losing focus on developing alternative energy sources to augment what petroleum-sourced energy can provide. Solar, hydrogen, fuel-cell, wind, biofuel: All these can help reduce our dependence on petro-energy but none of them can replace it.

2) Americans are now seriously looking at alternatives to automobiles for daily transportation to-from work. Cheap gas will only encourage us to get back in our cars.

3) At $1.00 per gallon, we're not collecting enough in taxes. "What!?" you say? Glen is saying we need more taxes? Well, no. But I realize that for certain things, like infrastructure maintenance and growth, we need a certain level of taxation. Even with the taxes that were being collected when gas was $2.50+ per gallon we were unable to keep up with the maintenance needs of our existing infrastructure.

4) With oil generating significantly smaller profits for their producers, there will be less money to put into R&D for the very alternatives that we so desperately require.

So yes, $1.00/gallon gas is not as good for our economy as you might initially think.