Low gas prices could have negative impact on Utah’s economy

This is an archived article and the information in the article may be outdated. Please look at the time stamp on the story to see when it was last updated.

VERNAL, Utah -- For the first time in a long time, gas is cheap--selling for less than $2 per gallon at gas stations along the Wasatch Front.

And, though drivers are saving significantly, the low gas prices could hurt Utah’s economy.

Of course drivers want to pay less at the pump, but the conflict is that lower gas prices comes at a cost to the economy, and that's something folks in Uintah County are starting to worry about.

Seventy percent of the state’s oil and natural gas is produced in the eastern part of the state, which has bolstered the economy and created jobs.

But lower gas prices means less investment in oil and gas activity, which ultimately could lead to cutbacks or layoffs.

The Uintah County Commissioner said there is some nervousness among industry leaders, but any change has yet to be seen—and changes will really depend on how long lower prices stay in place.

Prices are low largely because the supply of oil is larger than the demand for it, and even a slight change in supply or demand can have a significant impact on gas prices.

“It’s kind of good news, bad news,” said Mike McKee, Uintah County Commissioner. “For us in the Uintah Basin, higher prices are good because that's 60 percent of our economy, about 50 percent of our jobs. So when prices are high, that’s good. But what's happening is America is becoming more energy independent.”

The Uintah County Commissioner said nobody in the oil and gas industry saw these lower gas prices coming, and though they are paying attention to the forecast, they don't know if or when the prices will go back up.

13 comments

  • Ram Rod 58

    How did the economy run when the gas prices were low 8,10,15 ,20 years ago The rich are suffering because there not getting richer I can’t believe gas prices go up commodity stays up in prices.

    • Trace

      It slows the Fracking and Drilling. But the rest of the Industries get a burden ease for shipping and petroleum product goods. So it helps MUCH MORE than it hurts. Plus people have much more money to buy other thing rather than the fuel.

    • bob

      Pump prices in the late 1990s were the lowest in history. You can’t look at prices in the 1950s and say, “Oh, it was cheaper then”, because you’re ignoring inflation. You need to look at the price of a gallon of gas compared to the average wage. 25 cents a gallon was certainly NOT cheap, at that time. But in 1999 it was about 98 cents a gallon in Utah. THAT was unbelievably cheap. People made more money then than they do today.

      $1.98 a gallon is certainly pretty cheap, factoring in inflation.

    • bob

      Commodities trading can introduce volatility in retail pump prices, but in the long run it all averages out. He who lives by the “bet” dies by the “bet.” You can lose EVERYTHING trading commodities.

      Just enjoy it while it lasts.

  • Rick

    Oh yes..of course, anything that helps the consumer has to have a negative effect on the economy. Give me a freakin break. Its all BS.

    • bob

      Oil and gas production is a major part of the economy in some places, and if the prices crash those consumers will certainly be hurt.

      It’s not a big enough part of Utah’s economy to affect the Wasatch Front, but it will certainly affect TAX REVENUES, if it happens. That’s the real issue.

  • star1050

    I don’t know where he is getting his information regarding, ‘changes are yet to be seen’, large numbers of employees have been layed off for a couple months now and it is just getting worse.

  • Utah Red

    For every boom there is a bust. Uinta Basin has been through it before but most people forget that a bust will be coming until it gets there. This boom will end. The west is full of ghost towns.

  • Cindy Coker

    Ok let me get this straight… If prices go down and I can afford to buy more, say to visit family out of state or even take a drive around Utah, its bad for the economy and people are going to get laid off. But if gas prices are so high I can’t even afford to get myself back and for for work, demand goes down and people are going to get laid off because of supply and demand. This isn’t about the gas, this is about a few people and the government putting more money in their pockets. When I graduated from high school we had the gas wars and gas dropped to .18 a gallon. Within a couple years after I graduated, they claimed there was a gas shortage and the prices started going up, and up. We said there is no way in h@ll I’m paying over a dollar a gallon for gas!! And now look! There was no shortage, and there was no reason for gas to go up to $5 a gallon since then either.

  • Ram Rod 58

    In the late 60s and early 70s I remember a gas shortage didn’t go up all they did was ration the gas , it seems like in the Bush era and Cheney and every time the wind blew hard they raise the gas prices

Comments are closed.