America's Gas Prices

How rising fuel costs will affect our way of life.
By Alison Lakin
For years we’ve enjoyed gas prices that rival only those of the fuel-producing countries in the Middle East. Returning from trips to Europe, we’ve scoffed at the ridiculous amount of Euros it took to fill up our tiny Fiat rental cars. Now, as of August 2008, we’re crying all the way to and from the pump, emptying our wallets to fill a tank and desperately searching for new ways to improve gas mileage to save as much money as we can.

2008 Smart fortwo

2008 Mercedes-Benz R320

The EPA, when creating the fuel cost estimates for 2008 auto models, based their calculations on $2.80 gas prices. That was just a year ago. The American average is skirting $4.00 a gallon and is still around $4.50 in some states. In parts of California, where DriverSide is based, a gallon of regular unleaded approached close to five dollars at the height of summer. That number, while now dipping slightly after the summer rush, will continue to increase over time, giving new meaning to the term “black gold". Here’s what we have to look forward to.

What Is Affected Now?
“Americans are feeling pain at the pump and many experts say high gas prices are here to stay," says Jim Presswood, the Natural Resources Defense Council’s Energy Advocate.

The immediate result of rising fuel costs is being seen at the pump, but consumers are already feeling the effect everywhere. We’re talking about rising costs of clothes, food, building materials and any other product requiring transportation via trains, planes or trucks.

In the short-term, we should be very worried about small businesses unable to make up for the budget deficits caused by the fuel crisis. This also includes government-funded programs. NPR recently reported that police departments the country budgeted for lower costs of gas, causing a rush to find alternate means of saving money. If the crunch becomes too intense, police cars may even be pulled from the streets.

Though smaller car sales have been up recently - more efficient ones like the fuel-sipping Honda Civic, Ford Focus and Toyota Corolla are seeing record sales - truck and SUV sales have declined sharply for all American auto manufacturers, some as much as 30 percent, which has already resulted in some plant closures and layoffs.

Travel, both in the sky and on the road, is suffering, as consumers are trying to avoid the resulting bills for longer trips. May 2008 saw the largest amount of Amtrak riders in the company’s history, and AAA reported that 33 percent of members surveyed plan to take fewer trips this year because of the rising gas prices.

A New Future
We can’t predict what’s coming next, but economists can give us some pretty good estimates. According to the Energy Information Administration, world oil consumption is expected to grow by 1 million barrels per day, thanks to developing countries like China. That will hardly offset the projected decline of U.S. use by 290,000 barrels per day because of rising costs. The global demand will put a further strain on industries already affected.

In just the car industry, things will change rapidly. Our acceptance of the MINI Cooper and Toyota Yaris, as well as this year’s introduction of the Smart fortwo, are just the first steps. Car manufacturers around the world are gearing up to send their smaller cars, long available in Europe and Asia, to America. Nissan’s Cube, a compact urban soldier, might be hitting our shores as soon as 2009. Also looking promising is the arrival of the Ford Fiesta, launched recently in Europe, that shares a platform with the equally petite Mazda 2.

Alternate fuel sources, already being explored enthusiastically, will become more of a fervent obsession, with hybrids, diesels, electric and hydrogen powered vehicle sales and research exploding. The 2009 Volkswagen Jetta Sedan and SportWagen TDIs will be out in fall, and the Tesla Roadster, an all-electric sports car, has started rolling cars off the production line, paving the way for more road legal electric cars. Mercedes-Benz, currently providing us with their diesels in the E320 BlueTEC, ML320 CDI, GL320 CDI and R320 CDI, will be adding more BlueTEC diesels to their fleet.

Make no mistake that this will be - and already is starting to become - an important platform issue for our presidential race. In June, a USA Today and Gallup poll asked Americans “How important will the candidates’ positions on these issues be in influencing your vote for president?" and 51 percent of those polled said energy, including gas prices, is a major factor.

If prices trend upwards, as they have done for the last six years, Americans will face serious lifestyle changes. Longer commutes on a train or bus, conscious purchases of local products, fewer vacations and smaller cars dominating the market will all become part and parcel of American life. 

“The real solution is clear," Presswood asserts. “We must take bold action to break our addiction to oil and transition to a clean energy future."

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