Oil price slump a challenge to Obama

Alternative energy looking less viable

A slide in oil prices may be good for consumers battered by the U. S. economic slowdown, but it could pose a challenge for President Barack Obama’s ambitious plan to revolutionize America’s energy use.

Obama’s plan — outlined during the campaign last year when oil prices hit a record $147 US a barrel — calls for doubling U. S. alternative energy use within three years while easing reliance on foreign oil.


Oil prices have tumbled to around $40 a barrel, easing the urgency to solve America’s energy crisis. Analysts now say bigger government subsidies will be needed to lure private investment into less economical green fuel projects.

“Low oil prices are a very real danger because they do make alternative energy less commercially viable,” said Peter Beutel, president of Cameron Hanover.

“We need the government to subsidize solar, wind, ethanol, etc. to make them commercially viable enough to survive this price environment.”

The slowing economy has already started to take a toll on alternative energy projects that looked promising in 2008 when oil costs were soaring.

Reuters