The last few weeks have brought better conditions. Covid lockdowns, Omicron variant nervousness, and strategic releases of government oil reserves briefly lowered oil prices by nearly $ 20 a barrel before recovering modestly. As a percentage, the prices of natural gas in the United States have fallen even faster than those of oil.

Two years of crazy price swings have shown one thing: No matter what the price of oil or gas, someone is unhappy. Some like it hot, some don’t.

Low oil prices last year helped anxious consumers save money just when they needed it most. But those same low prices have been devastating for oil and gas companies and for investors who have waited more than a decade for America’s fracking industry to finally generate cash returns.

This year, oil and gas companies benefited from a bumper crop of cash. But high energy prices fueled inflation fears and outrage at the gas pump.

This dynamic has exposed a fundamental conflict in the fossil fuel economy. The interests of consumers and producers are diametrically opposed. Consumers want prices to stay low. Oil and gas companies need prices to stay high.

If there is a happy medium, it is difficult to find. Prices high enough to appeal to oil and gas companies create economic hardship, inflation, and political setback for consumers. But when prices are low enough to satisfy consumers, the bottom line drops for oil companies.

This is true not only in the United States, but also around the world. Just a few weeks ago – a lifetime in the oil markets – Asia’s major oil-importing countries joined with the United States in opening up strategic oil reserves to help bring prices down. But in response, OPEC and its allies threatened to curb production to keep prices high. Many OPEC countries need high prices to balance their national budgets and replenish their coffers. But for countries that import much of their oil, high energy prices are slowing the economy and creating trade balance problems. The interests of importers and exporters are difficult to reconcile.

The United States now produces more oil and gas than any other country, but it also consumes more. Here, the quarrels over energy prices have created new conflicts and strange political concubines.

Take the recent rounds of the Industrial Energy Consumers of America, a trade association of American manufacturers, against the US liquefied natural gas industry. LNG companies in North America are increasingly exporting natural gas to foreign markets. Reasonably enough, manufacturers are blaming rising exports for high natural gas prices and demanding that the Department of Energy suspend new gas export projects.

The manufacturers’ position dovetails perfectly with calls by Senator Elizabeth Warren, D-Mass., To curb LNG exports to alleviate high utility bills, a position that has put her squarely at odds with gas producers. . These conflicts between sellers and buyers have created new dividing lines, pitting major industries against one another and turning the ribbed manufacturing sector into an ally of progressives and consumer advocates.

Despite recent price declines, global oil and gas producers are currently in the driver’s seat. With the full backing of Wall Street, the oil and gas companies are exercising a “discipline of capital” that looks like OPEC quotas to the world. US oil companies are simply taking too much advantage of high prices to revert to their pre-pandemic habit of overproduction.

But in the long run, consumers struggle with high prices. For proof, look no further than the growing global demand for electric vehicles. Global sales of electric vehicles grew 80% this year, reaching 7.2% of the global auto market, from 4.3% last year. In the European Union, where gasoline and diesel prices have risen steadily throughout the year, nearly 1 in 5 cars sold in the third quarter were electric, compared to just 1 in 10 the year before. High prices clearly played a role in the increase. When fuel shortages and price spikes rocked the UK in September, buyer interest in electric vehicles reached unprecedented highs.

Similar trends are emerging in China. Sales of plug-in vehicles, including pure battery cars and plug-in hybrids, crossed the 20% threshold in the Chinese vehicle market this fall. Even in the United States, where relatively low gasoline prices have slowed car buyers to join the electrification movement, third-quarter electric vehicle sales were up 83% year-on-year. Kelley Blue Book reports that sales of electrified vehicles in the United States, including electric vehicles and hybrids, exceeded the million mark last quarter, accounting for 10% of the new vehicle market.

For now, oil and gas prices will remain just as unpredictable as the weather. But this very volatility makes renewables all the more attractive. Utilities, businesses and industries making long-term capital and investments can no longer be sure what fuel prices will look like next week, let alone 10 years from now. This works in favor of predictability and lower costs for wind and solar. Of course, renewable energies are affected by the weather; the sun is not always shining and the wind is not always blowing. But when they do, they’re completely free.

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