High gas prices? Get used to them
The Energy Department says high gasoline prices are here to stay. But is there anything the government can do to alleviate the pressure? Jeremy Hobson reports.
A gas pump in Berkeley, Calif. (David Paul Morris/Getty Images)
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TEXT OF STORY
Kai Ryssdal: And I do hate to be the bearer of bad tidings, but the government of the United States had this to say today about high oil and gas prices: Deal with it.
At a hearing on Capitol Hill, an official from the Energy Department said gas is gonna stay close to four bucks a gallon through next year, oil's going average about $126 a barrel and there ain't much Uncle Sam can do about it.
From Washington, Jeremy Hobson reports.
Jeremy Hobson: For the Democrats, the solution is a switch to alternative fuels.
Congressman Jay Inslee posed this question to Guy Caruso today. Caruso heads the Energy Department's statistical agency.
Jay Inslee: What is the assumption we have of the percentage of our private cars that can be either electrified or based largely on domestically-produced substitute fuels in the next 20 years?
Guy Caruso: Our current assumption is 45 percent of the new car sales in 2030 would be what we call alternatively fueled vehicles.
That includes hybrids, turbodiesel and flex-fuel cars.
Republicans called for more domestic drilling, but Ruchir Kadakia at Cambridge Energy Research Associates says that won't impact prices significantly.
Ruchir Kadakia: The problems that got us to $140 oil today aren't going to be fixed by drilling. And yeah, it might alleviate some of the problem, but you're just going to pent it up and, you know, shift it back a few years.
Lehman Brothers energy analyst James Crandell says an oil production boost could help somewhat in the near-term, but as for the big transition: changing people's habits...
James Crandell: The American car fleet's very large -- it's 300 million cars or so -- so it takes a lot of time for a complete turnover to a more efficient car fleet.
One piece of good news: Crandell says modest U.S. fuel efficiency increases are likely to keep demand here flat for years and that, he says, could curb those oil prices a bit.
In Washington, I'm Jeremy Hobson for Marketplace.
Comments
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06/28/2008
Wow now don't you wish the democrats would have let us drill in the gulf of mexico and more of alaska. I mean come on! We have almost as much oil as the middle east. By now we could be completely independent of foreign fuel. But alas it might hurt the environment. So pretty much democrats care more about the environment than the welfare of our economy. But suprisingly its not their fault that prices are so high. Its speculators (gamblers). Once they all decide to sell gas prices will plummit. And by plummit i mean around $3.20 a gallon. But as long as it doesn't reach $6 a gallon the U.S. economy wont completely collapse. Just keep your fingers crossed and kick every liberal and tree hugger in the face for not letting us drill in our own territory!
From Washington, DC, 06/19/2008
"Why does Ruchir Kadakia believe drilling will not help?"
Just to be clear, the quote was misinterpreted. Throughout the conversation I stated that we should be exploiting all of our domestic resources, and that any new supply will help the market. It's important to understand that drilling in combination of demand management are needed.
Ruchir Kadakia
From Cincinnati, OH, 06/12/2008
Where is the outrage of government and energy industry mismanagement? The financial community, large corporations, and government misplaced economic theory, special interest driven poor policy have again come together to do in the average american and small business. All this in the name of free markets and efficiency to support financial games (to the point of fraud) at the expense of real wealth building. Real wealth creation is what is required to solve both the enrgy and food problem. Even Bill Gates has stated the free market, as we now practice it, has failed to deliver against real socio-economic problems. It is time for a change with responsible leadership, if we can find leadership. Free markets work when they work for the common good versus making financial money deals for transaction fees. In many cases the newly created companies are not better than the ones we've combined.
From Tampa, FL, 06/12/2008
NEITHER PARTY OFFERS THE SOLUTION:
END FOREIGN WARS AND DRILL FOR DOMESTIC OIL
A rapidly devaluing dollar, aggravated by the cost of the War in Iraq, contributes to recent rapid increases in the price of gas. And if the trillion plus dollars the US spent fighting that war had been invested in a Manhattan like project to produce oil from known reserves in the Gulf of Mexico, the Continental shelf and synthetic diesel/gas from America’s abundant coal fields, gas would be $2 a gallon or less.
And reducing trade deficits keeps jobs in America. Every billion of trade deficit costs 13,000 jobs. $400 billion for oil last year: do the math.
Plus declaring American energy independence is the neighborly thing to do. It would place downward pressure on world oil prices by making more OPEC oil available for the UK, France, Japan, Turkey, etc.
Call Congress and demand domestic production in this decade.
http://www.house.gov/house/MemberWWW_by_State.shtml
Why does Ruchir Kadakia believe drilling will not help?
From NM, 06/11/2008
Embrace it? No no, there are far better ways, clearly outlined in this article: http://www.236.com/news/2008/06/10/are_you_prepared_for_the_comin_7045.php
There is no such thing as conservation, keep your gas, and kill your enemies.
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