The North Sea oil barrel, which is a benchmark in Europe, costs now 72$. Its price has continued to fall and has reached a new milestone with OPEC's decision to maintain its production at current levels, contrary to past practice where the offer was reduced to halt the fall in prices. This new situation calls for two observations.

First, this situation contradicts some theories about the depletion of hydrocarbon resources. Oil companies have long supported this approach, drawing on the concept of "peak oil", according to which production would peak and then decline after a certain date that the most pessimistic would deem imminent.Thus in 1977, the "experts" had argued that the maximum would be reached in the early 1990s with a production level of 60 million b / d. We will be close to 89 million in 2014. These claims were of course interested. In order to keep prices at a level that generates cost-effectiveness, the ghost of scarcity was needed. Unfortunately, these "theories" were taken over by political movements, environmentalists ahead, and have been used as arguments in a debate of a different kind: the challenge of the “technician” society, the rejection of progress born precisely from the ability of man to go beyond the boundaries imposed by Nature. There is nothing new in this: Gandhi, in 1909, as Roger-Pol Droit recently pointed out, in the last edition of “Le Monde des Livres”, explained that the machine was a bad thing and that "the train could only ever spread evil". German philosophers, Heidegger ahead, followed by his disciple Peter Sloterdijk conducted also the trial of technological society.

The fall in oil prices refutes them scathingly: we have found oil and gas, particularly in Africa, where previous research had failed. Moreover, new technologies, and not just in the case of shale oil development, improved reservoir performance. Contrary to Cassandra’s prophecy, there are more and more oil and gas. But why, in contrast to what was practiced in recent years, producers have not agreed to adjust their production level in order to avoid the fall in prices? This is the consequence of current political tensions. It is essential to understand them if one wants to understand how markets will react in the future. The falling results from the fact that Saudi Arabia and the United States have changed their attitude in terms of prices regulation, seeking by this means to weaken Iran and Russia, which draw from oil revenues a significant portion of their money.

Iran supports regimes that are hostile to Riyadh. And the United States, in agreement with European countries, opposes the Russian ambition to control Ukraine and more generally the countries of the former Soviet Union. The drop in oil prices is added to the economic sanctions imposed by Western countries. Moreover, as Russia also supports Iran, it is not surprising that Saudi Arabia has found there the opportunity to kill two birds with one stone. Economic arguments are irrelevant in this context. The surplus product is structural. These are not the stagnation in Europe and the slowdown (to be confirmed) in China that are likely to disrupt the market so brutally. As for the theory according to which Saudi Arabia would seek to penalize the shale oil development in the US, it does not stand up to analysis: other deposits whose costs are more important are about to be put into operation, notably in Brazil, without any reactions.

An agreement with Iran on its nuclear program will cause a normalization of international relations and Saudi Arabia would not be able to oppose it. A settlement of the Ukrainian conflict will quickly cause a return to higher prices, satisfying thereby large companies as well as new operators. Yet one should not overestimate the impact of the current level of prices on Russia. The country has significant financial reserves and furthermore, a new client that does not skimp on quantity, namely China, which pays cash and which, moreover, is a net importer that benefits from the fall in oil prices. The current situation, beyond the daily fluctuations, is likely to continue, at least until the summer of 2015.

What does this mean for France? Each time oil prices fell, one noticed a strong recovery of activity: 1987 and especially 1998, when the barrel price dropped below $ 20. The industrial sector will recover its margins and the energy bills of households heated by gas or oil will drop, resulting in new business resources and purchasing power. Conversely, the policy in favour of the energy transition will suffer a setback. The insulation investments that are profitable when the barrel costs 100$ and natural gas 12$ are not attractive anymore if prices are halved. For the same reasons, incentives to reduce fossil fuel consumption and CO2 emissions will be seriously affected. The very ambitious goals of the bill on the energy transition adopted in first reading by the French National Assembly will not be credible anymore, in this new context. The main enemy of green growth is of course the fall in fossil fuel prices.

Therefore, this fall being temporary, it would be timely to neutralize it, by increasing temporarily fuel taxation, especially the taxes on diesel that could be easily aligned with that of gasoline. It is not too late to take action because the bill will be presented to the Senate in February. The product of this temporary tax could be used to cover new tax cuts for households or to cancel the scheduled decrease in social benefits or even to offset the decline in profitability of insulation work. The fall in oil and gas prices is good news, since it will reduce our trade deficit. Due to its indexation, it can become very good news if the State knows how to use it in order to promote purchasing power and encourage the reduction of gas emissions.