Falling oil prices endanger alternative sources

The worst economic crisis since the Great Depression has lessened the demand for fossil fuels around the world. Americans are driving fewer miles, while growing economic powers such as China and India have begun to stop gorging on petroleum.

Along with the drop in demand was the removal of investment dollars from the commodity markets. That should limit how much oil and gasoline prices can swing, since hedge funds and banks can no longer borrow money at low rates to speculate on energy.

The consensus among analysts is that oil will stay between $25 and $50 a barrel. Gasoline could hit $1 a gallon, according to Flynn.

Those prices rearrange an entire energy sector, possibly halting a shift toward renewable sources. Profit margins for wind turbines shrink when oil falls below $70, according to German manufacturer Siemens.

And no new biofuel can compete against $1-a-gallon gasoline, according to cellulosic ethanol-maker Coskata in Warrenville.

Chicago Tribune