An Arm and a Leg... No, Make that 2 Legs
Since when did gas cost $2.15/gallon? I could swear I paid under $2 the last time I filled up. And this was at a CitGo in Manassas--usually one of the cheaper places to buy gas. I checked around at some of the other stations in Manassas (BP, Hess, Exxon, Shell, even Sheetz) and they were all in the $2.10-$2.17 range. I obviously haven't been paying enough attention to oil prices, but it still seems like one of the biggest single spikes we've seen in awhile. Anyone have any insight into what's causing this price increase (or, in other words, WTF)?
posted by ze roberto @ 4/04/2005 08:35:00 PM
5 comments
5 Comments:
The price of a barrel of oil is a large factor of the retail price of gasoline and worldwide (read: non-US) demand for oil has dramatically spiked thanks largely to economic growth in China. This article describes Saudi Arabia's concern over China and India's rapid expansions in oil demand.
To sustain their expanding energy needs, folks in China have been willing to raise the 'floor' above where the price has been - like at an auction, it becomes more valuable when more people want it.
There are a few things we can do about it - but if they were easy we would have done them by now.
Alternate energy sources are possible, but risky. Investors are timid about dumping resources into a new technology when OPEC could literally evaporate their investment overnight by lowering the price of oil and flooding the market with cheap gasoline. Renewable energy technology is only "worth it" when gasoline is somewhere near or above where we are now.
Shell, GM, Ford, DaimlerChrysler and BP have a proven track record of hydrogen research and practical application. The first public retail hydrogen station in the US opened in DC last year.
We could arrest the rise in prices by increasing our refining capacity in the US. The more we make at home, the greater the price advantage we have to purchasing it here as opposed to China paying to ship it halfway around the world. However, no one’s in a hurry to build a refinery in their backyard. The youngest American refinery is older than most of us on this blog.
Another strategy is to seek oil supply closer to home - the Gulf of Mexico, off the Mid-Atlantic Coast, Alaska....expect the same NIMBY rhetoric.
Conservation is a part of any comprehensive strategy, but it is a drop in the bucket compared to market forces. Think: earning 3% in a savings account when your credit card APR is 27%.
I'd be curious to see what the ROI is for improvements to public transportation infrastructure. Case in point: my school is 12 miles from my apartment, straight up Rt. 28 from Manassas to Centreville. It can take me anywhere from 25 to 60 minutes, depending on the weather, accidents, traffic light sequence, phases of the moon, etc. Yesterday (45 minutes), I decided to count how many people were driving alone in their cars; I stopped when I got to 100 (myself included.) I would love to be able to take public transportation to work, but there are no bus routes going my way and the nearest Metro is 20 miles away. I have to think, though, that more regular and reliable bus routes (and maybe some incentives for people to take public transportation) would go a long way to easing some of this congestion and consumption. I wonder too if the rising cost of fuel will finally prompt people to purchase more fuel-efficient cars, instead of the gas-guzzling, huge-engined tanks with which Americans seem enamored. We like to complain about the cost of gas but then we insist on practices that only serve to create an environment that drives up the price.
$2.15?!? I need to move upstate. I've been paying close to $2.30 for a couple of weeks now!
I'm ridin' Metro, y'all. Say it loud! Say it proud! Uh huh, uh huh. Yeahhhh....
I remember listening to a program on NPR a while ago that was discussing alternative fuel sources. One of the experts made a really interesting point: as it stands, we are just in the beginning stages of developing alternate fuels. As Randy pointed out, it's a risky venture for the oil industry to undertake and there's not much incentive to pour a lot of money into it, especially when there is no ready market for alternate fuels (i.e. lack of alternate fuel vehicles.) But, this guy said that if the government decided this was one of its #1 priorities and devoted as much attention and resources as it did to take us to the moon in the 60's, we could make this happen. I guess we just need to decide that it's worth the investment. It may take a while and cost a lot, but, personally, I think it would be worth it.
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