I’ve noticed in the past few months that the price of gas at the pump where I live has dropped rather sharply. At one time it was up around $3 per gallon (sometimes higher, sometimes a touch lower). Today I can generally get gas for between $2.10-$2.05…somewhere in that price range. Thats a pretty huge difference.
I was reading an article in Wired that said the best thing for the US is to have high gas prices…the higher the better. Their rational was that the higher the price the more inclined private companies will be to develope alternatives…and the more alternatives will become viable and economically feasible. Their advice…buy more gas, drive more, and be happy when we see those prices soaring. So, for debate I suppose…is the falling price of gas in the US a good thing or a bad thing? Or is it transitory and the current price fairly meaningless?
No data other than what I know about economics in general. Gas is still high enough that I bet total demand is down. However, the difference between $2 and $3 is enough to make a difference in other consumer spending, especially if gas stays fairly low while natural gas and heating oil go up. Depending on how much an average commuter uses it could easily be $50-100 a month or more less now than it was three months ago.
However, I do agree that alternatives will have to come from higher prices to make the alternatives economically viable, unless there is a major breakthrough that makes an alternative an inherently better option that can also be switched over to fairly quickly. So far, nothing is there.
Well, at least locally I’d take issue with your thesis, x. While gas is down from the heavier usage time in summer here its gone from $2.09 to $2.25 in the last week.
I can see the rationale that higher prices will create innovative pressure, all right. But whether that’s a good thing or a bad thing is all part of the market. Higher prices also mean higher energy costs which can lead to inflation and lack of disposable income for the average household, thereby holding back consumer spending and confidence.
It’s the market. There’s good and bad to all things. It’s the balance point that differs for everyone that makes things work.
In the short run higher prices means that the lower clases will suffer the most. Also it will mean more polution as people try to modify their cars, gov’t forgoing certain emmision reducing blends of gas, and burn other things at home for heat.
High gas prices will hurt the economy, which hurts everyone.
I noticed that Bush’s approval rating is up to 42 percent (up from something like 36% IIRC). I wonder how much of a factor the price of gas is in that…
My understanding is that current prices are held down at least in part due to European strategic reserves being released to help support U.S. supply post-Katrina.
If that’s true, then I would expect the current low prices to be transitory. And if the current low prices are transitory, then I don’t think that’s a good thing. A false sense of energy security can’t be any better than any other false sense of security.
Unfortunately, a lot of people don’t see a connection between conservation and keeping gas prices down.
When gas was $3.39, I saw less overall traffic in the morning due to people’s digging their “econobox” cars out of mothballs, leaving the SUVs at home, and carpooling.
Now, the Cavaliers, Civics, etc. with 3-4 passengers each have once more given way to lone drivers in Suburbans, H-2s, Expeditions,etc.
When summer comes and prices hit $4.00, it’ll be solely the fault of the Satanic Oil Business, in most people’s eyes.
I think we need rationing, not of gas overall, but of gas not subject to a special $2/gallon tax earmarked for deficit reduction. Assign each registered vehicle a basic special-tax-free stipend of, say, 50 gallons/month and allow those with unused gas stamps to freely sell them without reporting such sales to the IRS.
People who could ride the bus or train, but won’t, would have incentive to do so once they see that they could make about 50 tax-free extra dollars every month as compensation for their inconvenience.
Science isn’t magic. There is not guarantee that we will suddenly find the perfect “alternative energy” when we need it.
That said, the spate of high gas prices really did change a lot of people’s habits, and that was a good thing. If it had continued, I bet we would have seen improvements to the public transportation systems etc. These are the things that we need to work on developing, not putting our trust in an alternative energy that may never work. Sadly, I don’t think we will start to do this until everything goes to hell. We’d rather sit here and believe the fuel cells will save us than make our cities so that private transportation is not a necessity.
Nope, science isn’t magic. You seem to think it works like magic though if you think we will just bump along hoping we’ll ‘suddenly find the perfect “alternative energy” when we need it’. Here I thought research was ongoing and had been for quite some time. There are several viable alternatives right now…they just aren’t as cheap as oil is. There are also several waiting in the wings perhaps a few years or a decade or so out.
We started doing things decades ago. Millions (billions?) have been spent in alternative energy research. For the very practical reason that whoever comes up with a viable and competetive alternative for personal transport to oil will be nearly as rich as god.
Is your solution to the problem forcing people out of the suburbs at gun point, crowding them in cheek by jowl in our cities and then spending billions (trillions?) creating a huge public transportatoin system just so that ‘private transportion is not a necessity’ anymore? Because if you don’t do that I don’t see how you could make it work…at least not in the US where our population is more dispursed. You can’t build public transportation everywhere in the US…and this may come as a shock to you but not everyone lives in a city.
Besides, how would this help in the long run? If we decided to bite the bullet and put in place such draconian measures, we’d probably cripple our economy…and all to buy us an additional few decades or maybe a century or so (disreguarding that if the US doesn’t buy the oil someone else surely will…and use it). And then when we are at the end of the rope…what then? You’d be back to hoping someone would save us still…and the US would probably be out of the game due to the effects on our economy of doing all the things you’d have to do to stretch out the oil.
Who was talking about guns?! All I am saying is that the science isn’t there, and it may well never be there. It happens. We don’t have an AIDS vaccine. We haven’t got cold fusion. The flying cars are still pretty far off. Doesn’t mean that it will never happen, but you’d be an idiot not to worry about AIDS because you are sure they will come up with a cure before you die.
There are plenty of things we can do right now. We can make sure new developments submit a transit plan just like they submit plans for schools, low-income housing, sewers, traffic, etc. Subdivisions are popping up like mushrooms everywhere. Once we lay these streets, they will be there forever. We can lay them with a future transport plan in mind, or we can stick our fingers in our ears (or, alternatively, freak out) and be screwed should private transport ever become too expensive to be viable.
We can work future transit into the everyday road improvements we make. For example, adding lanes or designating HOV lanes doesn’t relieve traffic in most cities- people just go “Oh, traffic won’t be so bad, I guess I will make that trip after all” and the lanes clog right back up. Much of the work we do on freeways in urban areas doesn’t let people get places faster or better. It’s a losing game. The cities aren’t getting any less crowded. It’s time we start looking for real solutions instead of rushing to keep one step ahead of the game.
Of course there will be rural and semi-rural areas where public transport is not possible. Notice that I said we should make our cities transport friendly. However, 68% of the population lives in “urbanized areas” (suburbs, towns) and 11% live in outright cities. We can come up with a plan to serve most of these people. We can make it so that our everyday business (commuting, shopping, etc.) is easy and convenient to do by public transport.
Somehow I doubt this message will get through to you though. There were people that refused to believe we’d ever be able to function without horses.
And here you have a large part of the issue in a nutshell. Any attempt to manage the development of the transport system, the energy economy or urban planning in such a way as to reduce reliance on non-renewable and strategically unreliable fossil fuels is immediately assumed to part of the evil plan of the Illuminati, which every red-blooded American must fight until death.
Here’s a thought. If oil had been more expensive than it was over the last 25 years (when most of the current US infrastructure was laid down) then either the population would be much more concentrated because people would not want to drive as far, or else people would be driving much smaller and more economical cars. Public transport would be more popular. The energy intensity of the economy would be far lower than it is, making it less vulnerable to oil price shocks. The US would not look the way it does today, and ALL of that could have been achived by a simple carbon tax or flat-rate oil tax, even without any other planning measures.
But thinking ahead seems to be anathema to US political culture, so I guess we’ll just have to wait until the wheels fall off and then panic.
The going up is noticed at every cent. But going down, once it’s gone down at all it’s old news. Seems like the message is that what goes up must come down, but nobody remembers how much less it came down than went up.
Well, I’m certainly not opposed to such measures, if done rationally…I’m just a bit wary when someone starts tossing around implications that we’ll do away with private transport. I start seeing massive dollar signs at that point.
I guess you are also one who doesn’t think that the higher the gas prices get the better?
You (and others) toss around the whole ‘wait until the wheels fall off’ meme as if its a foregone conclusion. Why? When there are alternatives that are here today that could take at least some of the strain should the current oil economy go tits up. Why? I’m curious why you and others think that only magic solutions will ‘save’ us once the oil starts to run out (or more likely once it start to get expensive).
I have again failed to write clearly enough. Sorry.
While I think ‘higher the better’ is putting it a bit strongly, I support more realistic pricing of petroleum products - $3 per gallon for gasoline is still too cheap to encourage people to use it sensibly. However, avoiding shocks to the economy is the key, IMO. If the price of fuel had been ratcheted up by a few cents here and there to, say $4.50 or $5 over a 25-year period, then by now the US would be in a much better position all round. Instead, apart from some token twiddling like the oh-so-feeble CAFE regulation, politicians chose to do absolutely nothing and then shat themselves en masse when the price suddely started rocketing, because sudden shocks like that are bad for the economy and bad for their popularity.
The ‘wheels fall off meme’ is simply based on observation. How long do you think people have known that oil is a non-renewable resource, that refinery capacity in the US was reaching 100% utilisation, or that the Gulf was vulnerable to hurricanes? Look at how the world (and the US in particular) got into the current mess. Look at who is in charge and their so-called ‘solutions’ (lets drill more! let’s force oil companies to make gas cheaper!) and the only conclusion I can draw is that current trends will continue until the crisis point is reached. I agree, there are PLENTY of ways to reduce oil consumption, but they all require inflicting discomfort on the voter, which means they won’t happen.
Like I said, long-term planning seems to be anathema. Expecting Congress, the Senate, the POTUS and the Average American Voter to suddenly embrace a sensible energy policy seems like more of a Magic Solution™ than cold fusion.
As the registered owner of two cars who only buys about 20 gallons of gas a month, total, I am fully in support of this plan. In fact, I might just go buy a few clunkers, set 'em in the yard, and stop working all together.