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Gas prices: Worse than ’81 oil shock
CNN Money
Gas now at highest level, even adjusted for inflation; AAA’s reading of nearly $3.20 a gallon marks ninth straight record high in current dollars.
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Gasoline prices soared to levels never seen before as even the inflation-adjusted price for a gallon of unleaded topped the 1981 record spike in price that had stood for 26 years.
And higher prices could be on the way as Americans get ready to hit the road for the Memorial Day holiday and the start of the summer driving season.
The Lundberg Survey, a bi-weekly gas price tracking service, put the price of a gallon of unleaded at $3.18 in its latest reading released late Sunday, up more than 11 cents from its reading of two weeks ago.
While gasoline had already been in record territory in current dollars, Trilby Lundberg, publisher of the survey, said this is the first time that her survey topped her 1981 record high when adjusted for inflation. The price of $1.35 in 1981 works out to $3.15 in current dollars, she said. The Iran-Iraq war, which started the year before, choked off oil supplies to the global market, causing that spike in prices.
(21 May 2007)
Related articles:
Record high gas run continues (CNN Money)
Oil Price ‘Gouging’: A Phantom Menace? (NY Times)
Motorists will dig deep this summer
May 15th Senate Hearings on Oil and Gas: We May Have A Problem
Robert Rapier, The Oil Drum
On May 15th, the Senate Committee on Energy and Natural Resources conducted a hearing entitled Short-Term Energy Outlook Summer 2007: Oil and Gasoline. You can listen to the web cast here. I have done so, and this essay will be about my impressions of the hearing.
You can find the testimony of the various witnesses at the links below:
Mr. Guy Caruso – EIA Administrator
Paul Sankey
Geoff Sundstrom
Kevin Lindemer
Mr. Sankey is an analyst with Deutsche Bank, Mr. Sundstrom represents AAA, and Mr. Lindemer is an analyst with Global Insight. The witnesses really knew their material, although Mr. Sundstrom seemed terrified and Mr. Caruso had to make sure some of his answers were “politically correct.” On one occasion Mr. Caruso stated that the EIA does not foresee that cellulosic ethanol is going to scale up to even a billion gallons by 2030, and one senator said “Isn’t that in direct contrast to what the president thinks?” Then some pretty nifty tap-dancing ensued.
The Q&A, in my opinion, was an embarrassing display of partisan politics, and revealed serious deficiencies in some of the senators’ understanding of energy issues. Some Republican senators took the opportunity to push for coal-to-liquids and drilling in ANWR, and some Democrats did a bit of grandstanding over windfall profits – directly ignoring the answers the witnesses were giving them.
(21 May 2007)
Asphalt prices pave way for higher costs
Steven Oberbeck, The Salt Lake Tribune
And the tab is being passed on to homeowners and taxpayers
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The high price of crude oil has pushed up more than just the cost of filling up the family automobile with gasoline at the corner convenience store.
It also has forced up the cost of laying down pavement for new roads, filling in the potholes of aging parking lots or reconditioning a home’s leaky roof with a new layer of three-tab asphalt shingles.
“The price of asphalt these days is outrageous,” said Ron Case of Ron Case Roofing and Asphalt Paving in Salt Lake City. “Every month or so, it seems, we’re getting hit with another 7 percent to 10 percent increase in price. And like gasoline, there’s nothing we can really do about it. We have to have it.”
Asphalt is made by mixing crushed stone or gravel with bitumen, a heavy tar-like substance left over after gasoline, kerosene, jet fuel and diesel fuel are refined out of crude oil. Bitumen, which is sold by the ton, also is known as asphalt oil.
Since January 2006, the cost of a ton of asphalt oil in Utah has risen from $192.50 to $395, a more than 100 percent increase, according to the Argus Asphalt Report, a weekly publication that tracks the asphalt market worldwide.
(19 May 2007)
Raise gas tax by $1 to reduce oil appetite
Editorial Board, Detroit News
Americans say they want to cut the consumption of gasoline to reduce greenhouse gasses and wean the nation from dependence on the unsavory oil-producing nations.
But they want the automakers to make it happen without inconveniencing consumers.
Sorry, conservation doesn’t work that way. Simply making vehicles more fuel efficient has not been effective in reducing gasoline use.
The best way to do that is by providing real incentives to consumers to curb their appetites. To create that incentive, Congress should levy a $1-a-gallon increase in the federal tax on gasoline.
…The money captured by the tax — roughly $140 billion a year — should be used to cover the cost of the fuel economy mandates Congress is set to impose on automakers. It could also fund research and development of alternative fuels and powertrains.
The government has an obligation to cover these costs. Automakers should not be expected to bankrupt themselves for the national good. Just meeting the 4 percent annual fuel efficiency gains over 10 years requested by the Bush administration would cost manufacturers $114 billion.
We’re kidding ourselves if we believe automakers can carry the full burden of creating a cleaner world.
For conservation to work, consumers must share the pain.
Our preference would be to answer the oil dependency concern with more exploration and drilling of our own reserves.
And we’d prefer that lawmakers figure out first if their policies will actually affect global warming before rushing them in place.
But that’s not the sentiment of the nation. Clearly, the environmentalists are prevailing on both the public and the politicians. …
(25 April 2007)
Contributor Kjmclark writes:
This is an auto-loving conservative paper recommending a $1 increase in the per gallon gas tax. They recommend that to “stick” it to environmentalists and protect the auto industry, but at least they reached a useful conclusion!
