Reducing Fuel Usage: Option or Necessity?
August 2, 2008 by Bob Difley · 3 Comments
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By Bob Difley
“This year’s record-shredding spike in gasoline prices has finally ended,” says the San Francisco Chronicle in an article last Tuesday (July 29), “with prices falling by more than a penny per day.” Data from the US Energy Information Administration showed that American drivers used 3.2% less gasoline in the last four weeks than during the same period last year. The AAA Auto Club found that 1.3 fewer Americans traveled during the 4th of July weekend than a year ago, the first time travel has dropped in a decade on major holiday weekends. “Consumers have definitely sent a message,” said an AAA spokesperson.
Could it be that the lesson of supply and demand we learned in Economics 101 really works? Don’t rush out to buy that 40-foot diesel pusher just yet, however. Oil prices, being an international commodity, will rise and fall on rumors, fluctuating demand, threats of disruption to oil fields from terrorists, severe weather, interpretations of new events, statements by the political candidates, and the whims of oil futures speculators to name a few. An economics professor at Carnegie Mellon University says that oil could swing anywhere from $50 a barrel during a global recession to $250 if we end up at war with Iran. But the underlying force that will ultimately drive oil prices is the rising consumption of energy and oil of the emerging nations of India and China, whose billion plus populations want the quality of life that we have, including an automobile in every garage.
