As I write this article (July 2006), the price of gasoline in the Chicago metro area is averaging $3.19 a gallon. It makes the $2 a gallon gas we were all whining about two years ago sound cheap by comparison.So what can we do about it? Drive less? Americans depend on their vehicles for absolutely EVERYTHING: going to work, school, church, shopping, doctor visits, errands, eating out, entertainment, visiting extended family, vacations, you-name-it. Thanks to urban sprawl, subdivisions and strip malls, everything is so spread out that we've become a people who are totally dependent on our vehicles and petroleum for our mobility. Last I heard, we're burning over 9 million barrels of gasoline every day in this country.
To reduce the pain at the pump, we can cut back on driving somewhat, do a better job of planning trips to combine errands, and drive a little slower. But most of us are literally over the barrel when it comes to making a significant reduction in what we have to shell out for fuel.
FUEL EFFICIENT VEHICLES?
The only other alternative is to get a more fuel efficient vehicle. Higher mileage means we can drive the same number of miles on fewer gallons of gas. It sounds great, but there are up-front costs involved in switching to a more fuel efficient vehicle.
Not everybody can afford to buy a new gasoline/electric hybrid vehicle or a diesel-powered car or truck. Only a limited number of vehicles offer these powertrain options and the prices are high. Toyota and Lexus are adding more hybrid models, but the domestic vehicle manufacturers are lagging far behind.
Diesels are another fuel efficient option to consider, but diesel engines are only available in a handful of import passenger cars (VW primarily) as well as Ford, GM and Dodge trucks. Diesels can be up to 30% more fuel efficient than gasoline engines of the same size, but the market for passenger car diesels in this country has been hamstrung by EPA emission regulations regarding soot and oxides of nitrogen (NOX). VW recently announced they are having to discontinue many of the diesel engine options they have been selling because of new EPA regulations that restrict diesel emissions even more. It seems to me we're going in the wrong way with these regulations, right now, but that's another editorial.
There's also the cost of selling or trading your old gas guzzler. New car dealers have never been overly generous with their trade-in allowances, and are even more stingy when the trade-in is a fullsize SUV that gets 10 mpg. Nobody wants those kind of vehicles anymore, so resale and trade-in values have plummeted. Dealers are also reaping maximum profits on the fuel efficient vehicles they are selling, often getting full list price and then some.
ECONOMIC IMPACT OF HIGH FUEL COSTS
The high cost of gasoline is hurting the economy, too. With more money being spent on transportation costs, most people have less money to spend on other things like food (eating out), health care (the cost of which continues to soar), major purchases (appliances, giant screen TVs, etc.), even everyday expenses, auto maintenance and repairs. Unlike the government which spends regardless of its income and raises taxes anytime it wants more, most of us have to live within a fixed budget and survive on a fixed paycheck. When the price of gasoline goes up, the dollars to pay for it have to come from money that would have been spent on something else.
Higher fuel prices are also impacting the cost of virtually EVERYTHING that is transported and delivered by truck. This, in turn, drives inflation and makes everything else more expensive.
FUEL SUPPLY MANIPULATION
The high price of gasoline is NOT being driven by demand or any real shortage of supply. Demand is growing a few percentage points a year, but not enough to justify the doubling or tripling of fuel prices. It is being driven by the oil cartel, big oil companies, oil suppliers and speculators who control and manipulate the market for their own gain.
Consider the following: A program on educational television the other night focused on the booming oil sand industry in the Ft. McMurray area of Alberta, Canada. The amount of oil contained in this region is estimated to be THREE TIMES that of all the known oil reserves in the Middle East! The problem is you can't just drill and hole in the ground and have liquid oil come gushing out. The sand has to be dug up, hauled to a processing plant and cooked to extract the oil. The Canadians say the process is profitable when oil sells above $22 a barrel, so at today's price of $74 a barrel the Canadians have quite a windfall. But are they selling their oil for $22 a barrel? No, like everybody else they are selling at the world spot price of $72 a barrel.
Here's another recent news item that adds more fuel to the fire: BP was charged by federal investigators for cornering the propane market last winter, creating artificial shortages and driving up the price -- Just like the "power shortage" in California a couple of years ago that turned out to be pure baloney. The only reason BP got caught on this one is because their phone conversations were recorded. Last summer, hurricane Katrina was blamed for disrupting oil supplies as the price of gasoline shot up. News reports later revealed that the effects of the hurricane on oil operations and refining were greatly exaggerated to inflate prices.
And so it goes.
Unfortunately, I don't have the cure for gas pains brought on by high gasoline prices. But personally, I'm walking more, driving less, and riding my motorcycle more. Motorcycles are much more fuel efficient than cars or trucks, and mine gets about 65 miles per gallon on the road. A motorcycle is a viable alternative to high gas prices, if you don't mind getting bugs in your teeth and dodging all the idiots who think they can drive and chat on their cell phones at the same time. Motorcycles can even carry two passengers, but it's a little tricky lugging groceries home from the store.
My hope is that the auto makers will continue to move forward with more hybrids, plug-in hybrids and diesels. The best of both worlds, in my opinion, appears to be turbodiesel electric hybrid vehicles running on biodiesel. Diesel fuel can be made from soybeans or other plants, recycled vegetable oil or even garbage!
Who would have thought that gas prices would drop as much and as quickly as they have in the past few months? As I write this, the price for unleaded regular in Chicago is around $2.38 a gallon -- and as low as $2.01 a gallon in rural Iowa.
Why the sudden drop? Could it be there is an election coming November 7th and the current administration is asking their oil buddies for some help? Hmmmmmm. Wonder what the price of gasoline will do immediately AFTER the election?
Pardon me if I'm a bit skeptical but since the price of gasoline is TOTALLY MANIPULATED by those who have the oil, they can charge us whatever they damn well please and we have to pay it -- that, or move to oil-rich Venezuela where the price of gasoline is reportedly 12 to 15 CENTS per gallon! You can fill up your SUV there for less than $5 in gringo dollars. Maybe we should make them a deal: we'll trade them our gas-guzzling SUVs for their cheap gas.
Hmmmmm. Why am I not surprised by this turn of events? Looks like President Bush's oil buddies couldn't help save the incumbent Republicans from losing their seats. Time to start sticking it to us again.
These are not good economic times! The price of crude recently hit $117 a barrel, gasoline is back up over $3.65 a gallon in our area, and has hit $4 a gallon in some parts of the country (California & Florida). The Presidential election is coming this fall, but none of the politicians are saying much of anything about (1) how to end the war, (2) how to restore the value of the dollar, (3) how to bring inflation under control, and (4) how to drive the price of gasoline back down so Americans don't go broke at the gas pump.
We have over 100,000 combat troops in Iraq who have been playing hide-and-seek with a bunch of crazies for over five years now, which is a year longer than it took us to win World War Two!. Why don't we let those people sort out their own problems, and shift our military efforts to "managing" the oil supply in the region for our own best interests. Without cheap energy to fuel our vehicles and economy, America is in deep trouble!
At least on BP station in Chicago is selling regular unleaded for over $4 a gallon ($4.02 to be exact). The average price in the suburbs is still around $3.69 to $3.89 a gallon, but it's headed up.
Congress is finally talking about restricting arms sales to Saudi Arabia in an effort to put pressure on the Saudis to increase production. Some are also asking why President Bush is not releasing any oil from the DOE Strategic Petroleum Reserve to increase oil supplies and drive down prices. Both of the measures might help a bit, but the REAL problem is commodity speculators driving up oil prices and oil companies manipulating supplies and prices for their own profit.
As public anger grows over soaring fuel prices, some are calling for price controls on gasoline and diesel fuel. It might help, but it would probably only create shortages. Others say we should slap the oil companies with windfall profit taxes, or regulate or nationalize these monopolies for the good of the country. Nationalizing is an interesting idea. They've done that in Venezuela and the price of gasoline there is only 12 cents a gallon! The only drawback with this idea is that our government usually screws up every program it tries manage. Imagine bureaucrats like those from FEMA running the oil companies. The price might be a lot cheaper than it is now, but there would likely be shortages all over the country.
The real solution to this mess is to reduce our dependence on fossil fuels. That means switching to smaller, fuel-efficient vehicles like they drive in Europe, using more alternative fuels and biofuels, increasing the production of hybrid and plug-in hybrid vehicles, building new nuclear plants to provide clean, low-cost electricity to power plug-in hybrids and electric vehicles, living closer to where we work so we don't have to burn so much fuel commuting back and forth, and doing something (anything!) to stop urban sprawl. The more our cities continues to spread out, the more gas it takes each and every one of us to travel from A to B.
In response to direct customer feedback citing the prospect of rising gas prices as a top concern, Chrysler LLC today announced its own economic stimulus package: an exclusive gas price protection policy that eliminates the risk of further spikes in fuel prices. With the U.S. purchase of eligible Chrysler, Jeep and Dodge vehicles, customers can enroll in the Let's Refuel America program and receive a gas card that immediately lowers their gas price to $2.99 a gallon, and keeps it there for three years. The offer is available at 3,511 U.S. Chrysler, Jeep and Dodge dealerships through June 2, 2008, and is available on vehicles ranging from popular new compacts, crossovers and minivans to full-size diesel-powered pickup trucks.
"Today we are proud to introduce an unprecedented program to help put customers' minds at ease and do something to help working people who are worried about the volatility of fuel prices and vehicle cost of ownership," said Jim Press, Vice-Chairman and President, Chrysler LLC. "The Let's Refuel America Price Guarantee puts money in your pocket today, and allows our customers to better manage their fuel expenses. And you can't get it anywhere else besides a Chrysler, Jeep or Dodge dealership."
This is the kind of action we need to see from our "leaders" in Washington D.C. So why aren't we getting it???
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