Why Conserve When Gas is Cheap?

November 20, 2008 · Filed Under Driver Performance, Eco-Driving, Energy Independence, FuelClinic

I’ve been fielding some questions lately from friends and relativesÂ about the importance (and sensibility) ofÂ fuel conservationÂ at a time when the price of oil is dipping below $50/bbl and a gallon of gasoline costs less than $2/gal.

It was just 4 short months ago that the gasoline seemed destined for $5+/gal, and the cost of a barrel of oil was sure to climb to over $200/bbl. American consumers are enjoying “cheap gas” again, and some are already questioning the painful lessons of the summer. (For the record, gas prices are stillÂ twice as high asÂ ten years ago when a gallon of gas cost youÂ right aroundÂ $1/gal)

Here are my thoughts:

This too shall pass. Oil prices will not remain low for very long unless there is a major shift in the way our transportation sector is powered. Â Our dependency on oil is still nearly absolute, and there are major forces already acting to raise the price of oil.
1. OPEC is cutting production by millions of barrels per day. In the past these kinds of cuts were successfully used to raise the price of oil world-wide.Â (I say “in the past”, read below…)
2. Focusing too closely on the cost of fuel at the pumps today or in recent weeks ignores the inherent weaknesses inÂ the capacity of our existing production, pipeline, refining and distribution systems. If consumers return to unbridled consumption, there is stil not enough capacity to meet that demand.
3. Security experts have warned that oneÂ successful attack on major oil infrastructureÂ can still have catastrophic effects on supply, which will immediately drive the costs to record highs.
Improving fuel-efficiency appeals to a diverse group of people; including the penny-pinchers, environmentalists, and the national security hawks. The low cost of oil actually worries two out of the three, and the third is still feeling compelled to save.
1. EnvironmentalistsÂ fear that cheap gas actsÂ as a green-light to consumers to continue to buy gas-guzzling and CO2 belching SUV’s they don’t really need, and to slip back and continue wasteful consumption.
2. National security hawks understand that the market is fragile and is still run by countries and organizationsÂ that openly wish to do us harm.Â Low-oil pricesÂ do hurtÂ the war-chests of some state sponsors of terrorism and radicalized Islam, but these same players have enjoyed several years of record profits and have amassed enough fortune that they can wait-out any temporary drop in oil prices. We only reach security goals byÂ replacing oil-based fuels with alternative sources of fuel and energy.
3. And still the penny-pinchers need to save money. The economic trouble that exists alongside the cheap oil prices means that money is still tight, in spite of cheaper fuel.
The real damage to our economy is not yet realized, and we’ll need to continue to conserve and produce alternative sources of energy just to survive.

Personally, I think that the oilÂ cartel has overplayed their hand. I think world-wide consumer confidence is shattered, and there will be a period of suffering for oil producers as the rest of the world works to replace them.

I think more than anything, last summersÂ outrageous jump in fuel costs was an education for Americans, that our system truly is out of control, and that it’s not sustainable. It was an expensive education, to be sure, but one that may pay dividends as we continue to conserve as we develop and implement replacement technologies and fuels to ween ourselves off the oil tit.

Comments

One Response to “Why Conserve When Gas is Cheap?”

Sarah on November 26th, 2008 12:35 PM

I agree. We have GOT to stop being so short sighted and naive before it’s too late. This is just the calm before the storm and we need to prepare by increasing our own oil production and distribution systems and seriously research and develop viable, affordable alternative fuel sources.

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