Will Gas Prices Go Down? And Will it Affect American Lifestyles?

A few weeks ago, I was lamenting the fact that the media seems to be under a false impression that just because gas prices were historically low during the 90's, that the current price level must some how magically drop to the mid $1 range in the near future. This obviously flawed logic was leading the "journalists" to conclude that now is the best time to start a long commute/ buy a gas guzzling SUV, since the prices of far out houses and Hummers have taken a nose dive. Because who wants 10 miles to a gallon when a gallon is going to cost over $3?

Well, I finally saw some acknowledgement of the fact that "high" gas prices are here to stay in this article..
But while the article admits that the oil prices will stick for a while, it ignores and notes that most Americans are ignoring the long term implications:

Get used to it, the U.S. Energy Information Administration said Wednesday as national average prices reached the $3 mark.

Citing pinched supplies, an oil market worried about Mideast politics and recent Atlantic weather, the agency said there was little prospect for price relief before Labor Day and the end of the summer travel season.

So no relief until Labor Day? But if you look at their reasons for the higher prices and the actual long term trends, none of them will slacken post-labor day, or at all in the further future.

To note their reasons first: Anyone think that the Mideast situation is going to be solved after Labor Day? Anyone? Of course not, the region has been in turmoil for decades or centuries or since 3000 BC, depending on how you want to count; and the fundamental underlying conflict in the region is not going to be resolved even if Israel agrees to a cease fire. As for the current storm season, I could go into excruciating detail on how we need to get used to more turbulent weather, or you can just go watch an Inconvenient Truth.

But the underlying reasons for the "increase" in gas prices (the reason I keep quoting words like "increase" is that I think that it is quite clear that these are more natural price levels for gasoline and past prices were artificially low) are even more frightening for the future. The main two driving factors are that we are not discovering any more oil reserves, the ones we have are being depleted as quickly as possible, and the demand is rapidly increasing due in part to growth of developing nations, who contain well over half the world's population. Obviously, these are all things that are going to magically disappear come Labor Day.

But the article is interesting in another way also: the article points out that these prices have not decreased the American demand for gas, just that we cannot pay for it now:

Americans already seem used to high prices. Demand is running 2 percent higher than last summer, the energy agency said, when motorists paid about 70 cents less per gallon. Customers haven't stopped pumping gas, but some have stopped paying for it with cash.

Ah, the magic of credit cards. Instead of realizing the costs of their lifestyle, Americans are shifting the burden to the future (maybe there is a reason Bush won?).

This failure to realize the costs of unquestioning loyalty to lifestyles based around the automobile ties in with Anglico's post on planning yesterday. We seem to be in a state of denial. No need to consider the long-term impacts of our lifestyles or growth decisions. We can just charge the gas and make some nonsensical argument about how everyone will telecommute in the future or how gas prices will come down after Labor Day (or when they do not, how they will come down after Flag Day or Arbor day or some random day). America and North Carolina needs to wake up now before our future is mortgaged even further.


Great tie-in, TG.

I never cease to be amazed at the idiocy of the free-market types who either think that prices will eventually fall ... or that no one need to really worry about it if they don't. They think that the markets will magically take care of things.

Well that's true to some extent. I you stretch the time frame far enough, markets may eventually stabilize on some kind of model that enables society to prosper and foster the common good. But eventually could be two, three, four or more generations. And in the meantime, untold damage and strife is resulting from corporate stupidity.

Selectively Ignoring the Market

Part of the wingers problem on this is ignoring the obvious calls of the market on this one: that we cannot sustain gas prices at the artificial levels of the past.

Do you remember this West Wing episode

from the early years (first year maybe). Where they say the only way to get energy independence is to slap a $3 a gallon tax on gasoline? Now, of course, we are at that price practically with no alternative energy.

Oh, BTW, everytime I talk about energy I have to provide this link.

WTF? Every car should be electric.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

NO, It won't change most American lifestyles

Because, and I hate to say this, but Americans are stupid. The majority of Americans think it's their god-given right to drive a big obnoxious SUV and, by golly, we'll drive them until the end of days (which, according to some is soon...).

Support America. Buy a Prius. I did and let me tell you, it's done wonders for my kharma and blood pressure. :)

Thomas S. Brock



What have YOU done today to make the world a better place?

You're almost totally correct, Thomas.

I totally agree. We're danged thickheaded.

BUT ... as spoiled and selfish and ignorant as we American's can be, we're still real REAL sensitive to that which hits us hard in the pocketbook. I predict that we Americans will begin to demand alternative energy movement from our lawmakers when the guy who makes $80k a year starts to feel a pinch (i.e. can't play golf this Sunday because he can't afford both the greens fees AND the next tank of gas before the next pay day) from filling up his Excursion twice a week just to get to work.

Of course, by that time, us median-income schmucks will be unemployed because we can no longer afford to drive to work five days a week, but we're expendable anyway, so who the hell cares. :(

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

Proof is in the pudding.

Earning reports are just out:

The Detroit-based car manufacturer, the world’s largest ahead of Toyota, reported on Wednesday that it had lost $3.2 billion in the last three months.

Honda Motor reported a sharply higher quarterly profit on Wednesday, raised by the popularity of fuel-efficient vehicles like its Civic and Fit compact cars. Honda...posted a net profit of 143.4 billion yen, or $1.2 billion, in the quarter that ended June 30, up 29.6 percent from the year-earlier quarter.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

Ah, yes ... the pudding!

But why should car manufacturers care about pudding? :) Or the writing on the wall, for that matter.

How many of y'all remember the "energy crisis" and "oil embargo" back in the 70's? Did any of y'all go to the gas station with Mom in the family station wagon back in the day? Did your Mom hand the nice attendant $2 every time she went, and ask for "Two dollars worth, please?" Pretty soon, that twenty five cent a gallon went to 75cent a gallon REAL quick, AND my brothers and I had to learn to pump gas. :) That was just weird. Not to mention the fact that you couldn't get gas a lot of days.

In our little town in Rutherford county there was a Honda motorcycle dealer. They also sold a few of those funky little ittybitty 1000cc cars. You remember them. They looked like toys or fully enclosed gocarts. Around about 1976 those little things go so popular they couldn't keep them on the lot. Where only a year before everybody laughed at them, now everybody wanted one.

What ever happened to learning from your mistakes?

Has anyone in the US auto industry ever heard the saying, "Those who do not learn and remember history are doomed to repeat it." How about, "Not to know what happened before one was born is to remain forever a child." They still don't get it, though, do they? Where the HELL is my American made electric car, damn it? Heck, give me an American made hybrid, an American made diesel that runs on veggie oil ... anything.

Those little 1000cc honda's were kinda funny, though. Did you know anyone who had one? One of our math teachers had a yellow one. At the end of every year for as long as she had that thing, a bunch of wisecracker boys would pick the thing up and put it on cinder blocks at school. :)

"They took all the trees and put them in a tree museum Then they charged the people a dollar 'n a half just to see 'em. Don't it always seem to go that you don't know what you've got till it's gone? They paved paradise and put up a parking lot."

I had a Chevy sprint in 1985

that got 50 miles to the gallon. In college my fellow football players would often pick it up and sit it sideways in my parking spot.


Now, there isn't a Chevy product that gets over 30 miles to the gallon.

Jesus Swept ticked me off. Too short. I loved the characters and then POOF it was over.

I'm sorry...I know I shouldn't have laughed

but I did. That really is funny. My highlander isn't doing that great on mileage. It's better than some, but I really will pay attention to new technology.

The price of gas has already made a difference in our lives. Both of our girls dance and have since they were three. They've been at the same studio which is across town the entire 10 years. Our gas to the studio three nights a week is now running about $125 - $150 a month. I sat them down just a few days ago and talked to them about that and the environmental impact. We talked about their time and how we spend it and other opportunities they have to pass up in order to dance. They have decided to give up one class each (they take 3) so we will be driving two nights instead of three. While the decision wasn't made based on the cost of gas, the desire to have the discussion was prompted by it. IF they really didn't want to give up a dance class, I wouldn't have forced it, but I would have required they cut back on something else - like book purchases.

Vote Democratic! The ass you save may be your own.

It is scary to think that

America uses 40% of the world's gasoline, and even at near record high $3 per gallon, US gasoline usage is UP 2% this year. What price would it take for Americans to cut back?

Hurricane season is here. Will we see $4 gas before September is over? And if we do, will people cut back then?