With oil prices sliding to $60/bbl, emotions are probably mixed around the U.S. No doubt, consumers are enjoying the relief from this summer’s record gasoline prices. At $2.66 nationally, average retail gasoline prices are now significantly cheaper than they were at this time last year. And while experts were warning only weeks ago that consumers of home heating oil faced an extremely costly and difficult winter, the outlook has now improved considerably. Retail prices for home heating oil are currently on par with last year’s prices, and we may not yet have seen the floor.

But not everyone is feeling relief. Low oil prices are already causing great consternation among oil and gas producers, especially in North America. Amid a wave of record profits for the third quarter of 2008, companies like Exxon aren’t likely to find many sympathetic listeners. But consumers should be wary of the long-term impact of low oil and gas prices. On Wednesday, the Wall Street Journal ran this interesting piece (subscription required) on the impact of low prices on investment. As the article points out, low prices tend to deter investment in marginally expensive projects, weakening the medium-term outlook for supply growth.

Today, the most important costly oil and gas projects are almost exclusively outside of OPEC—in the U.S. and Canada in particular. As accessible, conventional sources of oil and natural gas have become increasingly difficult to find, technology-intensive projects like deep water drilling in the Gulf of Mexico and oil shale extraction in North Dakota have come to play an important role in the U.S. production profile. In Canada, unconventional sources of petroleum like oil sands have been forecast to rapidly account for an increasing share of overall non-OPEC output growth. As a whole, non-OPEC unconventional oil projects are expected to account for at least 20 percent of the incremental growth in world oil supplies between 2008 and 2030.

The challenge is that these projects—technology-intensive and unconventional development—are relatively expensive and require long-term investment commitments. The Department of Energy has estimated that the marginal cost of production in the U.S. offshore could be as much as $70/bbl. Oil sands, oil shale, and coal-to-liquids range in cost from $60/bbl to $100/bbl. And the International Energy Agency (IEA) estimates that with corn prices at their current $4/bushel, U.S. ethanol producers can’t compete with oil below $60/bbl.

So what will $60 oil mean? If this report from today’s Financial Times is a bellwether, $60 oil means that when the global economy shakes off the hangover from today’s financial crisis, and oil demand starts to pick up again, we will be right back where we were in July of 2008: weak supply growth due to poor investment, low spare capacity, a strong OPEC cartel, and high prices.

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