Are low gas prices bad?

AAA Michigan reported today the statewide average price of gasoline in Michigan is now $1.96 a gallon, a low it hasn’t reached since January, 2007.

This steep fall in gas prices comes as a result of economic hard times across the globe that have dampened the demand for oil, according to a report by CNN Money.com last month.

But will gas prices stay low or keep moving up and down? If low gas prices are a sign of a weak global economy, maybe we should hope they’ll go up again.

Another benefit of expensive gas is it forces lawmakers and automakers to push for alternative energy and move closer to eliminating the need for oil.

Remember all the talk during the primaries about the “gas tax holiday”, and during that time the talk of alternative energy sounded appealing to more than just environmentalists who were enthused by Al Gore’s “Inconvenient Truth“.

And when the economy picks back up, if we become comfortable with low-demand gas prices we’ll again be in the same predicament we were in over the summer of 2008. We should have learned a lesson from gas costing almost $5.00. It reminded us how much we depend on oil and how scary that is considering how much it runs our lives.

Recently, the Wall Street Journal reported just how dependent we are on foreign oil:

American transportation is more than 95% dependent upon oil, a proportion virtually unchanged since the 1973 Arab oil embargo. Americans will have spent $700 billion on oil imports in the last two years. That is more than we spend annually on defense. If that money stayed here, it would generate $7 trillion in economic activity. Clearly, lower oil prices are better for Americans and worse for the governments of OPEC countries, such as Saudi Arabia and Venezuela as well as Russia’s military resurgence.

Let’s not let lower gas prices make us forget our alternative energy priorities.