In the last six months, something dramatic has happened in the world of global energy. The price of oil has almost halved. Riding high at $115 a barrel in June, crude prices have been plummeting ever since, recently settling at under $60 a barrel, with no guarantee that they won’t keep sinking.

The ramifications are many and varied – and commentators (including ‘green capitalist’ airline boss Richard Branson) have been quick to warn that this is terrible news for the renewables industry, though this seems to be a bit of an overreaction.

Environmentalists should not despair at the inevitable talk of rock-bottom fuel prices and fossil-fuelled development booms. Cheap oil does not mean that more and more dirty fuel is going be extracted, boosting greenhouse gas emissions right at the moment when we need to be cutting them drastically. In fact, cheap oil could mean the opposite.

As conventional sources of crude have grown more scarce, in recent years the oil majors have put all their future extraction eggs into some very expensive baskets. According to Shell, Exxon, BP and gang, the majority of the next few decades’ oil will come from tar sands, fracked shale oil, ultra-deepwater drilling and the Arctic. That’s where their shareholders’ capital is flowing today. But it’s also where many frontline battles against extreme energy are now being fought – because these new sources of ‘unconventional’ oil are significantly more locally destructive, more carbon-intensive, more accident-prone, and more disastrous when those accidents occur. We need to leave 80 per cent of known fossil fuel reserves in the ground to avoid runaway climate change, starting with these extreme energy projects. But the good news today is that all these no-go sources of oil are also far more expensive to extract than conventional oil.

Tar sands, deepwater drilling and Arctic extraction – none of these are economically feasible at an oil price of $60 a barrel. Nor at $70. So the recent price slump has thrown these projects into crisis, with many investment decisions being put on hold for who knows how long. In fact, Goldman Sachs warned this week that $1 trillion of planned oil projects are now under threat. It doesn’t mention that, coincidentally, these are projects that the world cannot afford to go ahead if we are to avoid a temperature rise of well over 2 degrees.

Here in Britain, Chancellor George Osborne has thrown billions in tax breaks at the North Sea oil industry in the last three years – but it is still collapsing in the face of low oil prices. This only strengthens the argument that the Treasury’s lavish support for the oil industry, despite massive budget cuts for everyone else, is not only unfairly prolonging the fossil-fuel era, it is a massive waste of taxpayers’ money which is failing to prop up an almost-dead industry. If only the public rationale for these tax breaks (jobs) were to be applied to investment in the renewables industry, we would no longer be lagging behind the rest of Europe in clean energy generation.

In Alberta, Canada, oil executives are no doubt losing it behind closed doors, as the multi-billion dollar tar sands industry increasingly looks like the world’s largest, most environmentally destructive boondoggle. When coupled with longer-term concerns about a carbon bubble, perhaps the region’s pollution-soaked promise may not now be fulfilled.

And what about shale? In some ways the US shale oil boom was the trigger for this whole crisis. The sudden global glut of oil created by America’s fracking frenzy prompted OPEC to quietly declare a price war, knowing that many (though not all) of its oil-rich members can withstand the kind of low oil prices that the frackers can’t. Now the high-cost shale industry is also starting to falter – which is not only good news for those of us who want to see a liveable planet in a few decades’ time, but offers potential relief for those living in heavily fracked states who are seeing their water, air and land polluted and their health suffer. Evidence of their horrific experiences led the state of New York to ban fracking this week. A potential slowdown in the industry could provide some much-needed breathing space for other US states to do the same.

So take heart. Oil company execs are entering the festive season with fear in their hearts. This should be another reason to celebrate for the rest of us.

Jess Worth co-edited the recent issue of New Internationalist on Ending the Oil Age.