I topped off my CRV at the Exxon up the street, poured a cup of black coffee, and was handed change for my $20. I know I should have been happy, but as the coins clinked in my hand I had to wonder. Cheap gas lowers the cost to transport goods, saves people money getting to work and generally makes us happy. But we can’t forget that there are two sides to every coin. In many ways, cheap gas is bad for America. Cheap gas destabilizes key countries, discourages investment in alternative fuel development, and encourages Americans to live lives that are out of touch with environmental realities.  

In declining economic climates, populism often wins. Two of our world’s key nations are directly destabilized by dramatically lower gas prices. As you know, oil is exported to the US, where it is refined and made into gasoline. So the cost of oil is the source of the cost of gasoline. The fact that oil moved from $147 a barrel in July to the upper $30s in February is due to a complex combination of factors, but primarily it means oil consumption slowed faster than oil exporting countries could cut production. In Iran, 50% of the state budget is derived from oil exports. Unemployment in Iran, which had hovered around 15%, is now expected to go to 30%. Inflation is around 25%. The dramatic drop in oil has created an economic crisis that in turn has created a very tenuous political climate. Fundamentalist Muslims have been held at bay in Iran by national economic opportunity. If we think we have problems in the Middle East now, imagine what would happen if Iran collapsed.