What are you doing about it...?

[sprockets]

It's universal, people complaining about the rising price of gas. I hear it all the time at work. Sometimes people talk about getting a more fuel efficient car, or hoping for the "magic bullet" - the electric car. Nobody I work with has actually done anything about it. I work in a highly technical industry, surround by engineers and technicians for the most part. These are people who are accustomed to logically and systematically problem solving on a daily basis, as part of their job. I'm no different. With the last jump in gas prices I'd had enough and decided to start integrating a bicycle with mass transit at least once a week, cycling more for errand running, and lately driving MUCH slower than I would normally drive in order to save gasoline. I mention the steps I'm taking to my co-workers during these conversations and they actually laugh at my strategy to deal with the problem at hand. Like driving at the speed limit or taking mass transit or cycling to work is so far out of the realm of possiblity. Yet none of them has actually done anything to solve their common problem of fuel prices.

Has anyone else experienced something similar to this?

[FXjohn]

when you compare buying a new prius to simply paying more for gas, most people pay more for gas.
I'm wondering if I'll see less boating & jetskis on the lake this year

[sleazy]

when you compare buying a new prius to simply paying more for gas, most people pay more for gas.
I'm wondering if I'll see less boating & jetskis on the lake this year

i think youll definitely see fewer boats... as their gas tanks are large, very expensive to fill up, and economy is measured in gallons per hour.

but jetskis? no. probably no difference. like a dirt bike- whether it takes $8 or $20 to fill it up... you dont really care and can still have a great time on what is considered a small amount of money.


as for the topic of the thread, i started commuting last year. essentially blocking out entire months where i didnt start my i.c.e. vehicle. but this year, i'm hearing and seeing ALOT more people moving in this direction. even people not accustomed to being fit or outside.

[kf5nd]

Learned helplessness.

[wahoonc]

I am hearing and seeing the same general thing around here...everybody pissing and moaning, but nobody putting their money where their mouth is...

I work out of state. My company reimburses me well for the use of my heavy truck. However I am not thrilled with the 8 hours it takes to make the 430+ mile round trip every week. I started using Amtrak:love: to go back and forth on the weekends. It is faster, the company pays for it, it saves the company a solid $80 a week over my mileage costs and I am reducing miles as well as wear and tear on the truck. No it is quite as convenient, but it is faster, cheaper and much less stress for me...fair trade off in my book. Some job sites I can commute to by bicycle others I can't. We have also started using crew vans again to haul the guys back and forth from the office to the jobsite as well as the jobsite to the motel. So far it has worked pretty well, and kept fuel costs at least partially in check.

Aaron:)

[Hobartlemagne]

Im trying to take it easy on the accelerator. Keeping the RPMs under 3k can really help raise your
city-driving fuel economy.

[rhm]

Well, Paul McCartney is driving a nice new hybrid... anybody see this? Someone didn't think this all the way through, though....

http://www.cnsnews.com/ViewCulture.asp?Page=/Culture/archive/200805/CUL20080514b.html

[gwd]

I work in a highly technical industry, surround by engineers and technicians for the most part. These are people who are accustomed to logically and systematically problem solving on a daily basis, as part of their job. I'm no different. With the last jump in gas prices I'd had enough and decided to start integrating a bicycle with mass transit at least once a week, cycling more for errand running, and lately driving MUCH slower than I would normally drive in order to save gasoline. I mention the steps I'm taking to my co-workers during these conversations and they actually laugh at my strategy to deal with the problem at hand.
Has anyone else experienced something similar to this?
Yes. I'm always surprised at people with engineering or physics degrees who can mentally appreciate the efficiencies in using a bicycle and also the concept that efficient facility location can save time, money and energy yet can't apply the concepts. Bikes were a good choice when gas was cheap. Living close to the places you often go saves time for more fun things even if Bush is right that global warming isn't a problem.

[Platy]

What am I doing about it? I'm out in public on my bike using it for transportation. Hundreds of people see me every day going about my business. I doubt anyone looks at me and thinks, "Wow, I want to be just like that guy!" But maybe a few think that if a guy like me can get around happily on a bike, they could too. Or maybe some would-be cyclist sees me and thinks, "I never noticed they had a bike rack there" or "I never noticed the buses here had racks on front" or "Look at that shortcut that I never saw before". Stuff like that.

[TuckertonRR]

I've inspired at least one co-worker to ride in (at least 2x a week, anyways)

[fluke]

I drive an '02 Trans Am WS6.. I actually get 27 mpg with it though (manual transmission, I cruise around like 900 rpm, lol). I just drive much less. I combine my trips and tag along with other people if they are already going somewhere I need to go too. I don't drive much at all when school isn't in session (I'm a college student). I am way too far from college (40 minutes driving, and mountainous) to ride a bike there (although if it were close I definitely would and my college campus is bike friendly - just not skateboard friendly..), so I just drive my car to the first bus stop/parking area and take the college bus the rest of the way (or walk if I have plenty of time). I'm jealous of those who get to ride to work or school in nice weather. :)

I like cars.. but only drive when I need to. When I DO drive, I baby car around and limited pressing the gas more than I need to - better for the car too, which I keep in great condition (car show tomorrow here in town!). Knowing how to drive a manual car is a skill that will save you a lot of money in purchasing a car, driving your car, and replacing worn parts on your car (manual is cheaper to maintain than auto), and if you are a performance junkie you can enjoy full control over your car and usually better performance (depending on the car and use). Really though.. the whole rise in gasoline costs and saving money comes down to making smart choices about how often to drive, and being smart about things when you do drive - not just splurging money on the latest in technology for a bit more MPG (which really isn't saving you money if you didn't NEED a new car to begin with). Lifestyle adjustment is more important than the fuel economy of your car.

[Artkansas]

I'm doing nothing to improve the situation. I was bicycle commuting in the '70s and bicycle commuting now. No benefit.

[peace_piper]

I was bicycle commuting in the '70s and bicycle commuting now.

+1

That's just what I'm doing.

Let the cagers keep *****ing about the high cost of gas.

I don't think hybrid cars are going to save them either. A strange phenomena has taken place that hybrid owners drive more than non-hybrid owners. "It's okay honey, we get better mileage!" Most people aren't going to go out and buy a hybrid either. My housemate was thinking about it, but then she just paid off her car she's had for five years. "Now I can spend the extra money on gas," she says. "I just paid off my car and for the first time, have no payments on a car. Like hell I'm walking back into that situation."

There you have it. Most working poor people are in the same boat (or car :p). Why go buy something that's newer when you aren't paying for something that already works well. Those hybrids aren't cheap and there's still maintenence and insurance. (Back in 2002 when I had a car, I was paying over $200 for both those) It's a lot of money and when you're working poor, you're already stretched too thin. You just have to deal with what you have until it breaks/explodes and you absolutely must get a new one.

[Lamplight]

Yes, I get that sort of attitude occasionally from one of my coworkers. She can plainly see that I am healthy, happy, and financially comfortable (on a salary that she likely wouldn't last 6 months on), and yet she continues to make jokes and obnoxious remarks about my cycling. All the while she gets poorer, lazier, and though I hate to say it, fatter. My other coworkers have a completely different attitude about what I do. They often mention to me that they think it is very smart and sensible to do, yet they act completely shocked if you mention the idea of them doing the same thing. Most of them live within easy commuting distance from work. So it's smart for me to do it, but completely ridiculous for them to do it. Oh well.

[Mark Turner]

Gotta figure the life-cycle cost of the vehicle and fixed costs as well as the fuel. I work from home, but travel a lot during the growing season to get to the gardens and wildflowers I photograph. Bicycling just isn't practical for multi-day hundreds of miles trips. I'm definitely looking at more locations closer to home, but am in the middle of a big project that requires travel. My truck is paid for, so I'll continue driving at a moderate pace.

However, at home we've just had a 4.5KW photovoltaic array installed on our roof which I figure will produce about 75% of our annual electric use. More on my blog (http://turnerphotographics.com/blog/2008/05/13/gone-solar/), including a link to a set of photos of the setup.

It's important to look at the big picture and not focus only on a single part of the energy equation. I do hope that the current price spike will stimulate more public transit use (it has in our community) and less new road building.

[WriteABike]

+1

That's just what I'm doing.

Let the cagers keep *****ing about the high cost of gas.

I don't think hybrid cars are going to save them either. A strange phenomena has taken place that hybrid owners drive more than non-hybrid owners. "It's okay honey, we get better mileage!"

"Oh, these cookies are reduced fat so I can eat two of them!"

(In my case, it's "I just rode 35 miles, so I can eat four of them!":D)

[Elkhound]

Smug, much?

[Cyclaholic]

I don't see what the big deal is. All the signs are that gas is still cheap, too cheap in fact. The roads are still congested with large gas guzzlers, often single occupant, still speeding, still driving aggressively.

Your co-workers are laughing because they don't really see the current price of gas as a problem that needs addressing. Let's see how funny it is to them when they face $10 or $20 per gallon.

[bragi]

I don't see what the big deal is. All the signs are that gas is still cheap, too cheap in fact. The roads are still congested with large gas guzzlers, often single occupant, still speeding, still driving aggressively.

Your co-workers are laughing because they don't really see the current price of gas as a problem that needs addressing. Let's see how funny it is to them when they face $10 or $20 per gallon.

I have to agree with you completely. The vast majority of people I know have not changed their behavior at all because of fuel costs; the fraction of their total income devoted to fuel is still low enough that they can continue to drive around as much as they like. (I'm almost the only adult I know without a car.) I know a few people who have figured out ways to lower energy use at home, or who have decided to ride a bike a bit more often, but their overall lifestyle is largely unchanged so far. Being green's a fine thing, as long as it doesn't impinge upon one's consumption too much...

Personally, I'm not changing all that much, either: as before, I walk or ride my bike everywhere, try to buy food produced locally (which is easier said than done), keep energy use at home to a minimum ($15/mo), don't buy anything unless I actually need it and can pay cash for it (except the house), and give time and money to causes I believe in. I should fly less, eat less meat, give up my sailboat, drink less beer, and maybe be less sarcastic around my friends and co-workers, but then I'd have a lot less fun, so I'll just have to do what I can.

[lksfirecapt]

I work in the San Diego area (63 miles from home.....Temecula). In 2003 when gas hit $2.00 a gallon I moved out of the Ranger truck and into a Toyota Corolla. While the Corolla is an awesome vehicle I just couldn't sleep at night knowing the "kind" of people that were getting my $4.00 per gallon.

Now I make the 3:30 AM bike ride to meet the bus which takes me to Oceanside for the connection to the Coaster (train). From there it's a relaxing ride to San Diego where I pick-up the MTA Trolley to El Cajon. Back on the bike for the final trip to fire station #3...

Mark

[bragi]

I work in the San Diego area (63 miles from home.....Temecula). In 2003 when gas hit $2.00 a gallon I moved out of the Ranger truck and into a Toyota Corolla. While the Corolla is an awesome vehicle I just couldn't sleep at night knowing the "kind" of people that were getting my $4.00 per gallon.

Now I make the 3:30 AM bike ride to meet the bus which takes me to Oceanside for the connection to the Coaster (train). From there it's a relaxing ride to San Diego where I pick-up the MTA Trolley to El Cajon. Back on the bike for the final trip to fire station #3...

Mark

I admire your strength of will, but why do you do this? Why not move closer to work, or get a job closer to home? This is madness.

[Roody]

Gotta figure the life-cycle cost of the vehicle and fixed costs as well as the fuel. I work from home, but travel a lot during the growing season to get to the gardens and wildflowers I photograph. Bicycling just isn't practical for multi-day hundreds of miles trips. I'm definitely looking at more locations closer to home, but am in the middle of a big project that requires travel. My truck is paid for, so I'll continue driving at a moderate pace.


I'm curious. You drive for your business of taking photos, right? Do you think you'll have to raise your prices or add a surcharge because of the increased fuel costs? It seems to me that higher gas prices are going to feed into inflation even more than they already have.

[Roody]

I have to agree with you completely. The vast majority of people I know have not changed their behavior at all because of fuel costs; the fraction of their total income devoted to fuel is still low enough that they can continue to drive around as much as they like. (I'm almost the only adult I know without a car.) I know a few people who have figured out ways to lower energy use at home, or who have decided to ride a bike a bit more often, but their overall lifestyle is largely unchanged so far. Being green's a fine thing, as long as it doesn't impinge upon one's consumption too much...

Personally, I'm not changing all that much, either: as before, I walk or ride my bike everywhere, try to buy food produced locally (which is easier said than done), keep energy use at home to a minimum ($15/mo), don't buy anything unless I actually need it and can pay cash for it (except the house), and give time and money to causes I believe in. I should fly less, eat less meat, give up my sailboat, drink less beer, and maybe be less sarcastic around my friends and co-workers, but then I'd have a lot less fun, so I'll just have to do what I can.

I disagree. I think this latest round of price increases (I think more than 60 cents in two weeks) has really gotten people shook up. At first they'll just make the minor changes, but in a short time I think people will make big modifications in their transit plans. They'll start buying smaller cars, driving less, using public transit, even start thinking about moving closer to work.

Of course, the main reason for prices going up (besides the weak US dollar) is speculation in the oil markets. Eventually the speculative bubble will burst (and the dollar will balance), and prices will go down somewhat in the short term. But the long term trend will be for oil to again become more expensive, and I think ordinary people are starting to realize that now.

[lksfirecapt]

Bragi,

When I first started in the fire service I lived about 2 miles from work. In 1994 (with a growing family) we made the decision to move to Temecula (bigger homes, less money). Gas at the time was a heart stopping $1.29.

Fire service agencies are not like regional government jobs where you can get transfered to a closer job site, and based on the housing market in California, my options are few.

I don't think I could even sell my home right now as many of the homes in my tract are now "bank owned".

MG

[Roody]

Bragi,

When I first started in the fire service I lived about 2 miles from work. In 1994 (with a growing family) we made the decision to move to Temecula (bigger homes, less money). Gas at the time was a heart stopping $1.29.

Fire service agencies are not like regional government jobs where you can get transfered to a closer job site, and based on the housing market in California, my options are few.

I don't think I could even sell my home right now as many of the homes in my tract are now "bank owned".

MG

Yeah, this is one of the major obstacles to being carfree. Archaic zoning laws and land use patterns caused sprawl, which is when housing is long distances from the common destinations of the inhabitants. These same laws and habits also resulted in housing that's segregated by income level. The rich people live in one part of the county, the poor people in another area, and the middle income people somewhere else. It sounds like you're a victim of both sprawl and income segregated housing.

There are strong movements to change these land use patterns, but it obviously takes a long time to change something that's so ingrained. I have the impression that Southern California is one of the worst examples of this pattern anywhere. Other than moving to a totally different region, I don't know if you'll ever find any good solutions.

[Platy]

...Of course, the main reason for prices going up ... is speculation in the oil markets...
I disagree. The oil trading system is set up so that every month the expiring contracts settle at the current spot price. This is almost pure supply and demand.

The only possibility that allows for manipulation of the spot market price is if investors can somehow buy a significant amount of oil and store it away, thus reducing the supply and increasing the demand. (For an example of this, think of how de Beers & Co keeps prices high in the diamond trade.) But for this to happen with oil, investors would have to be buying and storing away real oil on a scale much larger than for example the U.S. and Chinese strategic petroleum reserve programs. I'd imagine that if this were happening, there would be at least a few rumors circulating about the existence and nature of such huge operations.

[gwd]

I disagree. The oil trading system is set up so that every month the expiring contracts settle at the current spot price.

Platy, I don't get this. I worked in Petroleum and the people I worked with (DOD) had yearly contracts, quite complicated but they only bought at the spot price when something unforeseen happend. Of course they have huge inventories. Lets see this wasn't the crude side this was the JP4, JP5 type stuff. I assumed the crude side was the same way, the refineries enter into contracts and go to the spot to buy or sell when something goes wrong. Sorry its not car free, oh yeah when I would visit the clients in Houston I would stay at a hotel where I could walk to work. Too bad Houston is so sprawled. I'd be the only person walking in that neighborhood just south of downtown. Well in the evening their were these worn out looking girls walking around but they'd end up getting in their boyfriends cars after a few minutes.

[lksfirecapt]

Roody,

The problem with California is so many people cannot envision getting out of their cars and using forms of mass transit. Thus the infastructure related to mass transit only makes small improvements from year to year.

The bigger issue at hand is not "how much my gasoline costs" but the global effect of using these forms of fuel. My first "reality check" that the environment was going to hell was the 2003 Cedar Fire. Never in my life could I have anticipated such a fire. Then it repeated itself in 2007 with the Witch and Harris fires.

If anyone tells you global warming is a lie have them come pull some hose with me in San Diego County...

Mark

[Roody]

I disagree. The oil trading system is set up so that every month the expiring contracts settle at the current spot price. This is almost pure supply and demand.

The only possibility that allows for manipulation of the spot market price is if investors can somehow buy a significant amount of oil and store it away, thus reducing the supply and increasing the demand. (For an example of this, think of how de Beers & Co keeps prices high in the diamond trade.) But for this to happen with oil, investors would have to be buying and storing away real oil on a scale much larger than for example the U.S. and Chinese strategic petroleum reserve programs. I'd imagine that if this were happening, there would be at least a few rumors circulating about the existence and nature of such huge operations.

I didn't mean to say that the oil market is being manipulated. I meant that I think some (maybe most) of the current rapid price increases are due to speculative purchasing rather than pure supply & demand. Investors are scared of future shortages of oil due to supply disruptions, so they're willing to pay more for current supplies. Add to this a measure of speculative investment--that is, betting that prices will continue to rise, ensuring big future earnings.

Is there any way that pure supply & demand can account for a 25 % jump in prices in barely two weeks, as we have just seen? I think s & d would usually trigger a slower rate of increases over a longer time frame?

(Obviously, you and others here know more than I do about economics, so I'm eagerly awaiting your thoughts on it.)

[Roody]

Roody,

The problem with California is so many people cannot envision getting out of their cars and using forms of mass transit. Thus the infastructure related to mass transit only makes small improvements from year to year.

The bigger issue at hand is not "how much my gasoline costs" but the global effect of using these forms of fuel. My first "reality check" that the environment was going to hell was the 2003 Cedar Fire. Never in my life could I have anticipated such a fire. Then it repeated itself in 2007 with the Witch and Harris fires.

If anyone tells you global warming is a lie have them come pull some hose with me in San Diego County...

Mark

Areas that developed during the automobile era are Sprawl City. This includes most of the Sun Belt as well as suburban areas of other regions. If I were you, I'd get out. The next wave of migration will be away from the Sun Belt and back to the cooler regions that have lots of fresh water. Median home prices in my city (Lansing, MI) have dropped 26 % in the last year. Houses here are a tremendous bargain right now, and our carfree infrastructure is slowly improving in spite of the recession.

[Platy]

...I worked in Petroleum and the people I worked with (DOD) had yearly contracts, quite complicated but they only bought at the spot price when something unforeseen happend. Of course they have huge inventories. Lets see this wasn't the crude side this was the JP4, JP5 type stuff. I assumed the crude side was the same way, the refineries enter into contracts and go to the spot to buy or sell when something goes wrong...

Sure. Actually, I think long term oil supply contracts that were entered years ago by refiners is what's keeping retail gas prices down around $4 instead of the $5-6 we'd expect if the refiners were paying spot prices. Similarly, some airlines have recently benefited greatly compared to their competition from long term hedging of their fuel costs.

However, long term contracts and hedges eventually run out. When they do, the new contracts will have to be closer to the prevailing spot price. That's why the refiners can hold out for only so long keeping retail gas prices low. Same for airlines, which face enormous fuel cost increases as their hedges expire.

I guess there's the possibility that most oil is currently being delivered under low priced long term contracts. If demand increases suddenly, that might spike the spot price up since most of the oil would already be spoken for. But I can't think of a way for spot prices to spike up so hard if there's plenty of supply or if demand goes lower.

...Investors are scared of future shortages of oil due to supply disruptions, so they're willing to pay more for current supplies. Add to this a measure of speculative investment--that is, betting that prices will continue to rise, ensuring big future earnings.

Yes, the price of long dated oil futures factors in people's expectations about the supply and demand situation in, say, March 2011. However, as the March 2011 settlement date approaches, the contract price will start converging with the spot price. At expiration the final value of the contract should be very close to spot, which reflects actual supply and demand.

Normally, the present value of a long dated future contract is lower than spot. That's because if you bought now and stored the oil for a few years, the storage costs would be considerable and you would forgo interest on the money you've invested in storing the oil. This normal situation is referred to as backwardation. However - if people expect diminished future supplies or increased future demand, the price of long dated oil contracts will go up. That situation is called contango.

You can speculate about backwardation vs. contango in long dated futures, and this is the exact type of speculation you describe. However, it doesn't directly drive the current real price of actual oil. The investors who guess right about the supply/demand situation in March 2011 take money from those who guess wrong, and in the end in March 2011 the oil will change hands at the spot price.

Is there any way that pure supply & demand can account for a 25 % jump in prices in barely two weeks, as we have just seen? I think s & d would usually trigger a slower rate of increases over a longer time frame?

(Obviously, you and others here know more than I do about economics, so I'm eagerly awaiting your thoughts on it.)
I don't know. A market can get wild when inflexible demand bumps up against a hard limit on supply. It's Musical Chairs in real life. If people are willing to pay any price for gas but supply dictates that there's only supply for 99% of the buyers, something has to give. What's happening may be that gas prices have to go up really, really high to bring the demand down enough to fit the supply.

All this is just my amateur opinion. I have a busted prediction somewhere in the archives here about oil never reaching $100 a barrel because economic recession would reduce the demand. So you can factor that into your evaluation.

Economics isn't our focus on LCF and that is as it should be. On the other hand the discussions about bicycling on the economics and oil forums is equally rudimentary. So in writing this post, I have to ask forbearance from those who don't want to talk about fuel issues here. If you keep your ears open, though, you know it's Topic A around town and it's the lead story on the national news now.

[Roody]

Platy,
Thanks very much for the time and thought in your long reply. It helped me to understand a lot more about the issue. You should write textbooks, as you explain complex situations very clearly. :)

[Platy]

Platy,
Thanks very much for the time and thought in your long reply. It helped me to understand a lot more about the issue. You should write textbooks, as you explain complex situations very clearly. :)
"Mr [Platy], you don't always get the right answers but you explain them so well!" - said to me by a student many years ago.

[Roody]

[....]Normally, the present value of a long dated future contract is lower than spot. That's because if you bought now and stored the oil for a few years, the storage costs would be considerable and you would forgo interest on the money you've invested in storing the oil. This normal situation is referred to as backwardation. However - if people expect diminished future supplies or increased future demand, the price of long dated oil contracts will go up. That situation is called contango.

You can speculate about backwardation vs. contango in long dated futures, and this is the exact type of speculation you describe. However, it doesn't directly drive the current real price of actual oil. The investors who guess right about the supply/demand situation in March 2011 take money from those who guess wrong, and in the end in March 2011 the oil will change hands at the spot price.
[....]


It seems that people's expectations about things other than supply and demand would also enter into this. For example if people thought their dollars were going to be worth less in 2011, they would be wise to hold stored oil (or oil futures) as an asset rather than dollars. And if people thought interest rates were going to remain low, they would want to hold oil and other commodities, rather than cash and securities, wouldn't they? So don't government fiscal and monetary policies directly affect the price of oil? It seems to me that the things the government is doing now to shore up the economy (weak dollar, tax rebates and low interest rates) will contribute to higher costs for oil and other commodities.

[Platy]

It seems that people's expectations about things other than supply and demand would also enter into this. For example if people thought their dollars were going to be worth less in 2011, they would be wise to hold stored oil (or oil futures) as an asset rather than dollars. And if people thought interest rates were going to remain low, they would want to hold oil and other commodities, rather than cash and securities, wouldn't they? So don't government fiscal and monetary policies directly affect the price of oil? It seems to me that the things the government is doing now to shore up the economy (weak dollar, tax rebates and low interest rates) will contribute to higher costs for oil and other commodities.
Well, we expect individuals to make their own economic decisions. And that comes right back to the topic of the thread, "What are you doing about it...? My opinion is that, right now, every random guy who figures out how to strap a milk crate to a rear rack is doing as much good for the country as the researcher plotting graphs in some office at the Department of Commerce.

[gwd]

Well, we expect individuals to make their own economic decisions. And that comes right back to the topic of the thread, "What are you doing about it...? My opinion is that, right now, every random guy who figures out how to strap a milk crate to a rear rack is doing as much good for the country as the researcher plotting graphs in some office at the Department of Commerce.
I know researchers who plot graphs at Department of Commerce, and Ag. and etc. If you think Bush & co. is doing bad for the country then the guy with the milk crate is doing more good for the country, if you think the Bush policies are the best for the country then these guys are doing more. The gov. researchers are working to implement Bush policy. Sometimes they agree with it and sometimes they don't but its their job to push the Bush agenda so they do it.

[bragi]

How much of the rise in oil prices do you guys think can be attributed to the fall of the dollar? I'm pretty good at math, but, since I don't have the necessary background data, I can't figure it out myself. (Okay, I'm just too lazy to look it up.) I suspect, though, given the plunge of the Dollar over the last year or so, it's actually a significant factor. I don't see my EU relatives screaming nearly as loudly about pump prices as folks here at home.

[Roody]

How much of the rise in oil prices do you guys think can be attributed to the fall of the dollar? I'm pretty good at math, but, since I don't have the necessary background data, I can't figure it out myself. (Okay, I'm just too lazy to look it up.) I suspect, though, given the plunge of the Dollar over the last year or so, it's actually a significant factor. I don't see my EU relatives screaming nearly as loudly about pump prices as folks here at home.

I'm definitely NOT an economist, but from what I've read, not even the experts can quantify this with any certainty. But the weak dollar and expensive oil are interrelated, with each affecting the other, presumably. I think that one worry is that this is some kind of feedback loop that won't correct easily.

[bragi]

I think that one worry is that this is some kind of feedback loop that won't correct easily.

Unless they start trading oil in Euros instead of Dollars.

[Roody]

Unless they start trading oil in Euros instead of Dollars.

Saddam Hussein tried to do this and look what happened to him. Then Iran wanted to start a Euro market and all of a sudden Bush was ready to invade them. I have a feeling that Russia and Venezuela would be interested in a Euro plan like this also.

[wahoonc]

How much of the rise in oil prices do you guys think can be attributed to the fall of the dollar? I'm pretty good at math, but, since I don't have the necessary background data, I can't figure it out myself. (Okay, I'm just too lazy to look it up.) I suspect, though, given the plunge of the Dollar over the last year or so, it's actually a significant factor. I don't see my EU relatives screaming nearly as loudly about pump prices as folks here at home.

Part of it is perception...your EU relatives have been paying much higher prices due to taxes... a jump from $8 to $10 is a 25% increase vs a $2 to $4 jump which is a 100% increase, so of course the US is noticing it more. I can't find the article at the moment (it was posted on another thread) But one writer contends that gas in the US has been under priced for years. It is just now coming back to where it was back in the 20's and 30's in terms of a relationship to average income and a percentage of operating a car. But then again in the 20's a fair number of people didn't own cars.

Yes the devaluing dollar is playing a part in it too, a big part of what is leading to the speculation on the futures market. I am no economist so I can't really explain how it works...but my favorite quote on the futures market comes from former NY Governer LaGuardia..."ticker tape ain't pasta" In other words you can't eat futures but they can sure mess with the price of things like food.

Aaron:)

[wahoonc]

Saddam Hussein tried to do this and look what happened to him. Then Iran wanted to start a Euro market and all of a sudden Bush was ready to invade them. I have a feeling that Russia and Venezuela would be interested in a Euro plan like this also.

Hugo Chavez/Venezuela has been lobbying OPEC for just that. But the Saudis so far have kept heading him off at the pass.

Aaron:)

[kaotikgrl]

On a larger level that just the recent rise is gas prices I work on transition designs of peak oil descent pathways which make people feel positive and included in the transformation. From Bookchin’s vision of Post-Scarcity Anarchism to Jacque Fresco’s holistic design of sustainable cities to the reality of (Transition Towns (http://www.transitiontowns.org/) ) I find answers and comfort in giving people the tools to create more local sustainable ways of living and the design of the transition in a way that people will embrace it as a positive common journey.

[GreenPremier]

I don't own a car.

[Roody]

On a larger level that just the recent rise is gas prices I work on transition designs of peak oil descent pathways which make people feel positive and included in the transformation. From Bookchin’s vision of Post-Scarcity Anarchism to Jacque Fresco’s holistic design of sustainable cities to the reality of (Transition Towns (http://www.transitiontowns.org/) ) I find answers and comfort in giving people the tools to create more local sustainable ways of living and the design of the transition in a way that people will embrace it as a positive common journey.

This is very interesting, and IMO very much on topic for LCF. Do you see the rapid increase in gas prices as overall positive or negative for transition design? People sure don't feel "positive and included in the transformation" when it comes to the prices. They feel more like somebody is sitcking it to them, I think. I don't know if it's possible to transform those negative feelings, although for many of on this board, our love of bicycles makes us feel more positive about the future (and the present).

Let's say that to some extent the high oil/gas prices are a bubble that will eventually burst, and prices will go down again. Will that lessen interest in transition towns and similar ventures?

[Roody]

I can't find the article at the moment (it was posted on another thread) But one writer contends that gas in the US has been under priced for years. It is just now coming back to where it was back in the 20's and 30's in terms of a relationship to average income and a percentage of operating a car. But then again in the 20's a fair number of people didn't own cars.
Aaron:)

This might be the article you're thinking about, from Slate.com. (http://www.slate.com/id/2191491/) Funny, I was just wondering if I should link that article here and you brought it up. Here's the lead-in to the article:

*


Gasoline Is Cheap (http://www.slate.com/id/2191491/)
Four dollars a gallon is outrageous! We should be paying much more (http://www.slate.com/id/2191491/)

The next time you have to take out a loan just to fill up your tank, remember this: Four-dollar-per-gallon gasoline is cheap.

There's no doubt that high fuel prices are hurting low-income consumers, and high energy costs are placing a tax on the economy that is slowing investment while sending billions of dollars overseas. It's unsurprising that presidential candidates and members of Congress issue new proposals practically every day to lower gas prices: Stop filling the Strategic Petroleum Reserve! Suspend the federal gas tax! Open ANWR to oil drilling!

These proposals are delusions, and Americans are living in a fantasy land when it comes to energy and energy prices. Over the past few years, consumers have been inundated with news stories about the soaring price of gasoline. Invariably, these stories include comments from a motorist who is outraged at the evils of a) Saudi Arabia, b) OPEC, c) Big Oil, d) all of the above.

But by almost any measure, gasoline is still cheap. In fact, it has probably been far too cheap for far too long. The recent price increases are only beginning to reflect its real value.

When measured on an inflation-adjusted basis, the current price of gasoline is only slightly higher than it was in 1922. According to the Energy Information Administration, in 1922, gasoline cost the current-day equivalent of $3.11. Today, according to the EIA, gasoline is selling for about $3.77 per gallon, only about 20 percent more than 86 years ago.
[....]




The whole article:

Gasoline Is Cheap
Four dollars a gallon is outrageous! We should be paying much more (http://www.slate.com/id/2191491/)

[cutman]

I've been able to sell my girlfriend on riding the bus. Public transit gets a bad rap in the south, which is probably why she didn't ride it much before, but I think she appreciates the convenience and not having to park. That, and our round-trip fare makes economic sense compared to gas.

One of my coworkers said he and his wife were looking at moving closer to downtown so he could bike to work like I do, but they ended up choosing a place way out in the country. More house for the money I guess. I don't know. I've always preferred location over square footage.

[wahoonc]

This might be the article you're thinking about, from Slate.com. (http://www.slate.com/id/2191491/) Funny, I was just wondering if I should link that article here and you brought it up. Here's the lead-in to the article:

*





The whole article:

Gasoline Is Cheap
Four dollars a gallon is outrageous! We should be paying much more (http://www.slate.com/id/2191491/)


Yep that was the article I was thinking of...

Another issue/factor that is wreaking havoc with a lot of things is the inability to accurately estimate fuel costs for the future. We used to include running our big diesel generators in the job overhead, they have now become a line item. Last project we sucked down over $18,000 worth of diesel:eek: and it definitely had an impact on the job costs and profit sharing.

Aaron:)

[TuckertonRR]

I'm definitely NOT an economist, but from what I've read, not even the experts can quantify this with any certainty. But the weak dollar and expensive oil are interrelated, with each affecting the other, presumably. I think that one worry is that this is some kind of feedback loop that won't correct easily.

From what I understand, oil futures are a hedge against a falling dollar. And the dollar has been falling against other currencies (Can. $, Euro, GBP) since crude oil's rise.

[kaotikgrl]

Do you see the rapid increase in gas prices as overall positive or negative for transition design?

When a spike in gas prices happens people become worried. That’s a natural reaction to economic conditions that hurt them. I also see those conditions as an opening for positive, not doom laden, discussions about oil descent pathways and the transition to where we would like to go, how we do it and what it might look like. For me that’s a positive.

I can only be encouraged as more people/communities discuss and then hopefully start to make a sustainable transition. My hope is as the culture of transition grows, together we share information and create a variety of design models. To me that’s a real positive too!