Are high gas prices really a "crisis?"

[5stringJeff]

A sane piece on Reason.org about market forces at work in the gasoline market.

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The Myth of the Gas Price "Crisis"
Drivers, carmakers and oil companies will respond to the market
By Samuel Staley

Once again, Americans are besieged by a crisis. You can't turn on the cable news channels without hearing about "sky-high" gas prices and our "addiction" to foreign oil.

Sen. John McCain wants to suspend the gas tax. Sen. Barack Obama wants a "windfall profits tax" on oil companies. And both major political parties seem to support funding various programs to find alternatives.

But are high gas prices really a "crisis"?

...

In reality, today's prices reflect the mismatch between supply and demand. The prices we face today, at the gas pump and on the world market, are really a normal and essential market outcome.

Read on...

[theHawk]

Yes, it is a crisis. And would be nice if Congress would get off its collective fat ass and did something about it.

[5stringJeff]

Yes, it is a crisis. And would be nice if Congress would get off its collective fat ass and did something about it.

By doing what? Removing artificial barriers to supply by allowing for more drilling? I would agree with that wholeheartedly.

[Trigg]

I don't see how this could be looked at as a "normal market outcome".


Gas has jumped extremely high in the last year and I just don't buy into the storyline about how China and India are using more oil. Their demand for oil I'm sure has been rising slowly, which dosn't explain the current rapid jump in price.

Here is an interresting websight, gas price history.

http://zfacts.com/p/35.html

It shows that gas prices were pretty stable at around $2 a gallon for almost 20 years. The enormous price hike has only been going on for the past 2 years.

[Kathianne]

A sane piece on Reason.org about market forces at work in the gasoline market.

------------
The Myth of the Gas Price "Crisis"
Drivers, carmakers and oil companies will respond to the market
By Samuel Staley

Once again, Americans are besieged by a crisis. You can't turn on the cable news channels without hearing about "sky-high" gas prices and our "addiction" to foreign oil.

Sen. John McCain wants to suspend the gas tax. Sen. Barack Obama wants a "windfall profits tax" on oil companies. And both major political parties seem to support funding various programs to find alternatives.

But are high gas prices really a "crisis"?

...

In reality, today's prices reflect the mismatch between supply and demand. The prices we face today, at the gas pump and on the world market, are really a normal and essential market outcome.

Read on...

A very good article that addresses the issues that face many Americans. I agree that ditching the SUV and moving to more efficient car will even out the past year. For those doing such, it will take much higher prices to 'feel the pinch or punch.'

What about those of us that out of necessity must drive 40 miles or more, because of employment? Who already drive fuel efficient cars? If our income is such that we are already living on the cusp, there are real problems.

If prices stabilize, I think salaries or a second job will make up the difference, (I'm banking on that).

Of course, in our Machiavellian world, (which I basically support), the market will out.

[Sitarro]

A sane piece on Reason.org about market forces at work in the gasoline market.

------------
The Myth of the Gas Price "Crisis"
Drivers, carmakers and oil companies will respond to the market
By Samuel Staley

Once again, Americans are besieged by a crisis. You can't turn on the cable news channels without hearing about "sky-high" gas prices and our "addiction" to foreign oil.

Sen. John McCain wants to suspend the gas tax. Sen. Barack Obama wants a "windfall profits tax" on oil companies. And both major political parties seem to support funding various programs to find alternatives.

But are high gas prices really a "crisis"?

...

In reality, today's prices reflect the mismatch between supply and demand. The prices we face today, at the gas pump and on the world market, are really a normal and essential market outcome.

Read on...

I wonder if it's a typo......... no since he stated it twice it's not a typo, just an idiot with no qualifications writing an article about something he knows nothing about on an invisible web site.......... Samuel actually believes that 85 BILLION BARRELS A DAY are being extracted from the earth? He doesn't have a clue, he doesn't even know the difference between a million and a billion.


"According to British Petroleum Statistical Review of World Energy, as of 2007 Saudi Arabia reported it had 264 billion barrels (42×109 m3) of estimated oil reserves, around 21% of conventional world oil reserves.[12] Since Saudi Arabia produced about 3.2 billion barrels (510×106 m3) of oil in 2006, this would give it over 80 years of reserves at current rates of production."

At Samuels claim of 85 billion barrels a day, Saudi Arabia's reserves would have been gone in 3.1 days.

[Sitarro]

A very good article that addresses the issues that face many Americans. I agree that ditching the SUV and moving to more efficient car will even out the past year. For those doing such, it will take much higher prices to 'feel the pinch or punch.'

What about those of us that out of necessity must drive 40 miles or more, because of employment? Who already drive fuel efficient cars? If our income is such that we are already living on the cusp, there are real problems.

If prices stabilize, I think salaries or a second job will make up the difference, (I'm banking on that).

Of course, in our Machiavellian world, (which I basically support), the market will out.

A little perspective....... The Queen Mary 2 burns a gallon of fuel to go forward 49 feet..... that's FEET! Since there are 5,280 feet in a mile, it is burning almost 108 gallons of fuel. To sail from England to the U.S. and back it is around 6,000 miles......... that is 646,530 gallons of fuel per trip. I don't think your economy car is the problem.

[Kathianne]

A little perspective....... The Queen Mary 2 burns a gallon of fuel to go forward 49 feet..... that's FEET! Since there are 5,280 feet in a mile, it is burning almost 108 gallons of fuel. To sail from England to the U.S. and back it is around 6,000 miles......... that is 646,530 gallons of fuel per trip. I don't think your economy car is the problem.

No, my economy car isn't, the price of gas is.

[Roomy]

We are in crisis here in the UK due to fuel and energy prices, we need to attack another oil state soon.

[midcan5]

Oil needs genuine competition, it may have that now as I have already bought a product that usually came in plastic containers and now comes in cardboard. But in the 70 crisis several measures were taken, remember 55, we still have it in places.

http://www.ccds.charlotte.nc.us/Hist...ton/horton.htm

[April15]

As oil is the only truly portable energy source out side of wood or coal and is readily usable in internal combustion engines the impact on any developed nation is major. Every conceivable product you purchase is affected by fuel prices.
Oil speculators are the ones driving the price up just like any commodity can be manipulated. From corn to pork bellies it is just a matter of choice.

[5stringJeff]

Oil needs genuine competition

That might be the smartest thing I've seen you post. Petroleum based products have no serious competition, which is why everyone hangs on the price of oil. For automobiles, purely electric cars seem to be a decade or two away from being available for mainstream consumption. For power generation, nuclear seems like the most viable "clean" alternative out there.

[Psychoblues]

Crisis? More like crises. The "Enron Loophole" persists even after all these years. The speculators are killing capitalism and you and me as well. I can't help it if you aren't keeping up and that is the genius of unregulated market speculation!!!!!!!!!! Good luck in your investments, cowgirl!!!!!!!!!!!!!!!!

[namvet]

if you consider transportation of goods and materials YES it is a crisis.

[Chessplayer]

A little perspective....... The Queen Mary 2 burns a gallon of fuel to go forward 49 feet..... that's FEET! Since there are 5,280 feet in a mile, it is burning almost 108 gallons of fuel. To sail from England to the U.S. and back it is around 6,000 miles......... that is 646,530 gallons of fuel per trip. I don't think your economy car is the problem.

It also carries 2600 passengers, and a lot of cargo.

To contrast.

http://science.howstuffworks.com/question192.htm

A plane like a Boeing 747 uses approximately 1 gallon of fuel (about 4 liters) every second. Over the course of a 10-hour flight, it might burn 36,000 gallons (150,000 liters). According to Boeing's Web site, the 747 burns approximately 5 gallons of fuel per mile (12 liters per kilometer).

This sounds like a tremendously poor miles-per-gallon rating! But consider that a 747 can carry as many as 568 people. Let's call it 500 people to take into account the fact that not all seats on most flights are occupied. A 747 is transporting 500 people 1 mile using 5 gallons of fuel. That means the plane is burning 0.01 gallons per person per mile. In other words, the plane is getting 100 miles per gallon per person! The typical car gets about 25 miles per gallon, so the 747 is much better than a car carrying one person, and compares favorably even if there are four people in the car. Not bad when you consider that the 747 is flying at 550 miles per hour (900 km/h)!

It is not just the raw fuel usage, but how many people are moved at one time, and how far they are moved. If you wish to put things in perspective, you may wish to include that perspective. Miles per gallon per person is what you should look at. How does your passenger car fare in that calculation?