Posted by: Jim | June 24, 2008

I’m Just Sayin’ …

For all of you who still drive objects large enough to achieve sovereignty, and are upset about the price of gas, I’m sorry but I don’t feel sorry for you. You have contributed to the demand, which has increased the price you must now pay. This is all so elementary that I shouldn’t even need to explain it.

My new Kia  gets close to 30 MPG and I’m starting to like it more and more.

 

Anyway, I warned you here.

 

And here.

 

I suggested gas rationing three years ago.

 

Then, two years ago I mentioned that gas prices go up during election years. (Hmm, what year is this?)

 

Venjanz commented recently that no one cares about anything but the price of gas right now. So true. I’m don’t think this is an attempt to vaunt up the price of gas as an issue (who is better to solve this? Obama or McCain? Who knows?) as much as it is an attempt to bury other issues that matter more in the long run. (War, Liberty, Freedom, Prsidential powers.)

 

Here’s my latest radical idea: turn gas into a utility. Ah, I see that I’m not the first one to have this idea.

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Responses

  1. Nice forecasting Jim. I appreciate and was glad to see that you recognize how rising gas prices effect more than just the automobile. Food, plastics emerging nations all are impacted.

    So Joe Homeowner needs to worry more about his monthly gas budget increasing from $300 to $600, he must also increase his food budget and worry about the cost of goods everywhere. All of this extra money has to come from somewhere….but certainly not anyone’s employer. They are feeling the crunch also as they scramble to absorb the additional costs of doing business. Increased payroll is not high on the agenda.

    Can you tell me why the Democrats are blocking the exploration of oil offshore? It seems this would help lower the cost of oil even just going through the motions and not seeing the results for several years down the road. Even if oil is ‘bad’ isn’t bringing Americans to the brink of bankruptcy or financial ruin worse? How many Americans purchased a car getting 18 mpg for $35,000 and still owe $18,000 and can only sell it for $12,000? Sitting on the proverbial high horse and saying I told you so and this is for your own good does not seem a reasonable solution. Forcing the exploration of alternative fuels applied in a practical and affordable manner also does not seem to have an immediate result and will likely not be brought to market much sooner than oil if we started drilling for it today. Why can we not do both?

    I suppose my heart goes out to those people on the coast commuting 3-4 hours a day and thinking about their additional expenses and how they cannot even afford to get to work. For myself, I can afford the higher priced gas and my lifestyle does not change. I do not like it but I can afford it without any adverse impact. I choose to drive a 4 wheel drive steel vehicle with a big engine. Of course, I live in Montana and I enjoy the great outdoors. Quite frankly, a Kia could not get along here in the snow and outdoors but just phone me up anytime and I would be happy to pull you out of the drift or back onto the road. (yes, I know a Subaru would have me covered….but I just do not like those little cars)

  2. Bubba,

    Agreed … the financial stress is applied to all layers of society.

    “Can you tell me why the Democrats are blocking the exploration of oil offshore?” 

    Actually, I think it’s futile to try and block off-shore drilling. It’s like keeping food from a starving person–they will eventually kill to get the food. The off-shore drilling in question is an inevitability. I think all the hype about how it won’t impact oil reserved for 20 years is a bunch of crap. I am open to additional education on this, but I just don’t see how that’s possible.

    “Even if oil is ‘bad’ isn’t bringing Americans to the brink of bankruptcy or financial ruin worse?”

    Very true. But the net effect of making oil difficult to acquire, as well as the increase in the price of oil, is actually good. I used to think that the crisis of “peak oil” was going to be a sudden cataclysm, but now I’m starting to see that it won’t be a cataclysm, but a slow and painful transition. It’s not going to kill us, but it won’t be easy. If those who oppose oil consumption stopped their opposition and made it easier and cheaper to obtain oil, they would effectively be pushing out the pain into the future, and making the pain potentially much more severe and crippling. I think Democrats see this, and are playing a necessary role in governing the application of pain vs. the application of remedies. The trick is to transition into our next form of energy with as little pain to our economy and environment as possible. Frankly, the more pain we allow ourselves NOW will ease this transition as much as possible.

    “How many Americans purchased a car getting 18 mpg for $35,000 and still owe $18,000 and can only sell it for $12,000? Sitting on the proverbial high horse and saying I told you so and this is for your own good does not seem a reasonable solution.”

    Guilty as charged as far as me sitting on a high horse. I do feel sympathy for the people you mention, but there can never be a paradigm shift in an economy without casualties. The people you mention above will have to manage their own micro-economy and try to limit their losses as much as possible. One ray of hope is that the market may see the millions of people in this predicament, and find some ingenious solution. Right now it looks like these people may have to just take a deep breath and move on.

    We CAN do both … find more oil and explore for alternative fuels. We are doing both now.

    I guess the issue is … do we still want to be having this conversation in 20 years? If we open the floodgates because oil is expensive, we will be. If we deal with $5/gallon gas like Europe has been for years, we might apply a little American ingenuity to finding a solution, and be LIVING that solution in 20 years.

  3. 30 mpg is ok, but European cars were giving that 20 years ago. It’s sad that there is this market for such hugely inefficient vehicles in the US, but European-style gas prices may prove a remedy.

    Here in Central America, you can actually feel the cultural influences at work, country to country, by what cars people drive – in Guatemala, people look to the US, the result is that pickups and 4x4s are the most popular, whereas in Costa Rica it is the saloon cars and the small cars that tend to be favoured in Europe.

    As for US drilling, the US has already taken control of reserves far in excess of those to be gained in the ANWR etc, they just happen to be on the other side of the world… Isn’t the issue as much what sort of enormous subsidies exploring/drilling in the US would generate for Big Oil? It would be better to apply pressure to increase refining capacity to stop this deliberately tight market being maintained to cause disproportionate price spikes whenever there is a tiny rise in demand.


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