Saturday, January 3, 2009

The Real Reson Behind Falling Gas Prices

I'm excited and grateful that gas prices are low again. The other day I filled up my car and prepaid $30 but it only took $21 to fill a completely empty tank. I hadn't really been paying attention to gas prices so I was shocked that they had gotten so low.

I was curious to know how gas went from nearly $4.50 a gallon to $1.37 over a matter of months. I asked the attendant at the gas station and she must have been a Harvard Economist because she said "It's because the economy is slow and it affects the gas prices and stuff like that". Thank you Miss Teen South Carolina. I shouldn't be rude because her answer actually reminded me of myself trying to BS my why through an essay question in High School.

I wasn't satisfied with her answer so I kept inquiring elsewhere. I've heard others say that it is due to supply and demand and since we are driving less the prices have fallen. Are all American really driving 1/3 as much as they used to? No Way! So what's going on? I am not a conspiracy theorist, but there are definitely some higher powers at work behind the scenes. I noticed the big drop in prices started right after the presidential elections. I don't know their motivation or intent but I am really curious to know what's going on.

I'm sure after reading this far you are probably concerned too. Not particularly about gas prices but you are probably wondering what kind of person pre-pays at the pump? I know that is disturbing but let's stick to the topic.

I don't want to sound like a person who insists on knowing all the ingredients at a buffet before they will eat, but I'd just like an simple explanation. I Remember when "the man" told Charleton Heston not to rock the boat either. He was told to mind his own business, relax, and just eat his soylent green. In case this is my last blog post and you never hear from me again I have a theory about this. "Gasoline is made of people!"


BeyondGreen said...

You should read The Manhattan Project of 2009 Energy Independence Now by Jeff Wilson. His curiosity and research as to the same questions you ask lead to him writing this book. It is fascinating...

The low prices at the pump unfortunately wont last much longer. OPEC just slashed production again and they are already starting to rise again in most areas of the country. Added to that state governments are losing so much revenue from us conserving in the way of their gas tax they are all squaking about a sharp increase in gas taxes. You can't win it seems.

Anyway, back to the book. This book walks you through oil, the uses besides gasoline, and it's depletion. We are globally using oil at 2X faster than new oil is being discovered. Added to that is the fact that once 3rd world contries are exploding in population and becoming more modenrized and putting millions of cars and trucks on the roads. Most of the easy to drill oil has already been drilled. It is finite, it will run out one day in the not too distant future.

It would cost the equivalent of 60 cents a gallon to charge and drive an electric car. The electricity to charge the car could come from solar or wind generated electricity.

If all gasoline cars, trucks, and suv’s instead had plug-in electric drive trains, the amount of electricity needed to replace gasoline is about equal to the estimated wind energy potential of the state of North Dakota.

Why don't we use some of the billions in bail out money to bail us out of our dependence on foreign oil?

This past year the high cost of fuel so seriously damaged our economy and society that the ripple effects will be felt for years to come. Why not invest in setting up some alternative energy projects on a national basis, create clean cheap electricity, create millions of badly needed new green collar jobs, and get out from under our dependence on foreign oil. What a win -win situation that would be.

MikkSolo said...

Woaaah! Brain Fry! I don't ever like to think that much!

"Beyond Green"

The Mauermans said...

I think it's because most US Americans don't buy as much gas, such as the Iraq and that's why gas prices are low.

Miss South Carolina

russell jack said...

gas prices are determined by SPECULATION of supply and demand (not supply and demand directly). so when gas prices were high this summer, it's because speculators "projected" that the gas would be worth more in the future. as a result they charge more now (for gas that isn't actually worth that now).
now that the economy is in a downturn, gas prices are speculated to be much lower. so although we haven't felt the full effects of this recession yet (well, i guess i haven't) - gas prices are lower now in anticipation. stephen colbert explained it (comically) - but i can't find the clip from his show where he did it.

Der Grexxie said...

BeyondGreen has the right idea here. According to Peak Oil theorists the volatility is proof that we are past peak and the sudden dramatic lowering in cost will precede wild permanent increases. Some of the doomsayers predict $8.00 a gallon by this July. I was too aware of this theory and felt like crying when the cheap prices hit because it signals the end of civilization as we know it. I'm rather fond of the lifestyle we enjoyed with abundant cheap energy and am not preprared for post carbon living even though I can see it on the horizon. Wah! Sorry for the buzzkill.