Tuesday, August 16, 2005

Everybody Drive to Wyoming
Gasoline is up another dime today at most places out here on the west side of Madison. The going price is now $2.69.9, although a few places are still at $2.59.9, and at least one has split the difference at $2.65.9. I debated topping off at one of the places where it hadn't gone up, even though I'm barely down to half-a-tank at the moment. Then I decided not to, because at the most I'd be saving maybe 50 cents. And 50 cents isn't the problem--$25 a tank is.

AAA posts a Fuel Gauge Report on its website, and it's no doubt getting major hits today after being mentioned in USA Today. And given today's price increases, it's already out of date. As of this morning, the highest prices for regular unleaded were found here:
California $2.76.5
Hawaii $2.74.0
Nevada $2.66.6
Washington $2.64.2
Illinois $2.62.7
The cheap stuff, meanwhile, is here:
Wyoming $2.37.7
Utah $2.39.7
South Carolina $2.39.8
Oklahoma $2.42.1
Louisiana $2.43.2
Of course, it's likely to be higher in major metros, and if you haven't seen pictures of gas station signs in California showing prices for all grades over $3, you haven't been looking.

The rising cost of gas has driven the Consumer Price Index up a little bit, and the stock market was also down today, sparked in part by more increases in the price of crude oil. I have no idea whether this runup in oil prices is something temporary, or whether it will lead to economic disaster--although with George W. Bush in charge, I'd put my money on disaster.

(Digression: Absolutely nobody is calling on Bush to do anything about the price of oil--but can you imagine the squealing demands from the right if John Kerry had been elected last fall? As it is, we can assume that Bush will do either nothing or something cosmetic that has no real effect. He did sign the energy bill earlier this month and claimed it would help, but nobody who isn't already loaded on GOP kool-aid believes it will do anything but fatten oil company profits.)

Journalist Gywnne Dyer, writing in the New Zealand Herald, is a bit more optimistic about the future than I am. He does not see an economic collapse coming as a result of the current rise in oil prices. Even if the current worse-case scenario develops--$100 a barrel--Dyer says that oil would have to stay there for a year before it started squeezing the world economy. And he doesn't think that's going to happen. He expects oil to return to its "natural" level of $40 to $55 per barrel, eventually. In the short term, Dyer thinks high gasoline prices might start to encourage conservation, thus helping address global warming immediately without squeezing the economy too severely.

In the long term, however, Dyer acknowledges we've probably reached the famous Hubbert Peak, and so there's nowhere for oil production levels to go but down. If that's the case, Dyer predicts another massive rise in prices, perhaps another doubling of the price (whatever it will be), sometime around 2010 or 2012. And, of course, peak oil means that on some future date, we will extract the very last drop of crude oil there is to get. You and I probably won't be around to see that--but our children and grandchildren might be.

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