Apparently. Expensive gas appears to a non-factor here in NY. Regular unleaded is well under $2/gallon down in NJ here. That is cheap gas by any measure. And gas demand in the US is dropping as people lose jobs and stop driving to work ... or to the shopping mall for that matter.

Once again, the fastest cure for stupid high oil prices is...stupid high oil prices. We replaced our boiler here and did some other improvements that will probably mean we use about half as much oil as last winter to heat our home. That decision was precipitated by my local oil dealer telling me oil was $4.89/gallon back in June. My latest delivery only cost $2.62/gallon. But the demand destruction engendered by $5/gallon oil will remain - the new boiler does indeed sip fuel convincingly - even if heating oil drops to under $2/gallon. And the way things are going, that may happen later this heating season.

The same thing happens anytime somebody goes from a 15-20mpg vehicle to a Honda Civic that gets 33mpg or a Toyota Prius that gets 45-50mpg. Demand destruction.

So here's a question for all of you buying into the emerging market escalating oil demand scenarios. If a decline of only about 5% in American gasoline usage over a year can take oil from $145+ bbl to $55 bbl, how hard can it be to bring oil prices to heel with a coherent national energy policy in the US? I really don't think it would be that difficult. I cut my heating oil use in half for an investment of about $10K. As we go forward we'll buy more fuel efficient cars too. The next car I buy for my wife's commute will average 33mpg or 43 mpg (depending on the car), 10-20mpg more than her current ride. That's a decrease in fuel demand of 50%, not 5%.

It's not really that hard. It's not so much that we're running out of oil, we just need to use 20-50% less, and that's well within the scope of existing and affordable technologies. Where are the tax incentives for Americans to do what I did with my boiler? To buy cars that get > 30mph hwy? We need them.