Every time I fill up my car at the gas pump these days, I think of my former colleague, Jack Z. Smith, an editorial writer, columnist and a business journalist with special expertise on the oil and gas industry.
You see, whenever there was what I called an “artificial” or a “manipulated” rise in the price of oil per barrel — and, thus, an almost immediate hike in the price of gasoline — Jack and I would go at it.
I’d blame Big Oil for being greedy and he would try to teach me the economic principle of supply and demand, usually ending our debate in frustration by telling me, “You just don’t get it.”
And, no, I didn’t get how the big oil companies were raking in record quarterly profits while the cost of gasoline was reaching record highs.
No one could convince me that the American public was not being bilked.
I understood that at the time there was great demand for oil in China and that oil producers from around the world were controlling supply, but so were American producers.
Every time some dictator in an oil-producing country raised an eyebrow, somehow companies found a way to raise prices.
Just about two years ago, I can remember paying close to $4 a gallon for gas, and I got very excited in the spring of 2012 when prices at the pump fell to $3.79 a gallon, then $3.74 and finally down to $3.69.
I think back now and realize how we had been conditioned to accept a new reality that we would be living with high oil and gas prices from now on.
So, you can imagine how I feel today as I write this column, having just paid $2.22 a gallon for gasoline, and that’s not close to the lowest price in North Texas.
There were several stations in Fort Worth Tuesday selling gas for $2.05 a gallon, and at least one with regular grade set at $1.99.
At the same time at one point Tuesday, the price per barrel of oil fell to its lowest level in five years (below $55), almost 50 percent lower than it was just six months ago.
While we consumers may be pleased about the extra dollars we have during the holiday season because of savings at the pump, some are suggesting that we should be worried about the impact that the low oil prices will have on our overall economy.
It is thought that the drop in prices could have a negative effect on what has been a booming shale energy production industry in the United States, could cause a ripple throughout the economy that would mean more unemployment and possibly hurt financial institutions that fund the costly drilling projects.
It has been predicted by some analysts that if oil prices continue to fall, say to $40 a barrel, the smaller oil companies could be forced to cut production or stop altogether because they couldn’t afford to deliver their product.
The American oil companies used to depend on the Organization of Petroleum Exporting Countries to control output in order to keep prices high.
But OPEC has not been cooperating this time around, choosing instead not to cut production.
That has added pressure on the shale producers in the U.S.
I don’t claim to fully understand the oil business, but I’m certainly not one who is ready to start feeling sorry for them.
It is hard for me to believe that they can’t withstand these latest developments in the industry, and I have faith that the American economy can and will withstand whatever pressure falling prices may bring.
After all, the extra money in consumers’ pockets will be fed back into the economy, and that’s got to be a good thing.
In the meantime, let those pump prices continue to fall.
Bob Ray Sanders' column appears Sundays and Wednesdays. 817-390-7775