Gas Prices- A Snipet from the NYTimes
'The real culprit behind rising energy costs is the roaring demand from growing economies, especially China's and the United States', though the volatile situation in the Middle East does seem to add a risk premium. Most of China's energy demand is for industrialization, which, in turn, contributes to the global economic recovery. In contrast, roughly half of the United States' petroleum demand is for personal consumption, primarily for cars, trucks and S.U.V.'s, a situation that, in turn, makes the nation ever more dependent on an increasingly endangered supply of foreign oil.
If $2-per-gallon sticker shock slowed sales of Hummers — which get about 11 miles per gallon — that would hardly qualify as a national tragedy.
Still, even Americans who don't drive gas-guzzling S.U.V.'s are feeling pain at the pump, and responsible political leaders have to prepare the public for this new reality. No comprehensive energy policy should overlook long-term means of encouraging conservation and minimizing our dependence on oil from the Persian Gulf region. Rather than pretending that there are facile switch-flipping fixes, Senator Kerry should be talking about bolstering conservation efforts and fuel economy standards, and encouraging new investment in refining capacity.
In the meantime, we all need to keep the shrill hyperbole about 'record high' oil prices in perspective. A barrel of oil now costs more than $40, but when adjusted for inflation, that price is less alarming. During past spikes, oil has cost well over twice that amount in today's dollars. Yes, high fuel costs could ultimately endanger the economic recovery, but there is no reason to believe that they will do so at this level.'
If $2-per-gallon sticker shock slowed sales of Hummers — which get about 11 miles per gallon — that would hardly qualify as a national tragedy.
Still, even Americans who don't drive gas-guzzling S.U.V.'s are feeling pain at the pump, and responsible political leaders have to prepare the public for this new reality. No comprehensive energy policy should overlook long-term means of encouraging conservation and minimizing our dependence on oil from the Persian Gulf region. Rather than pretending that there are facile switch-flipping fixes, Senator Kerry should be talking about bolstering conservation efforts and fuel economy standards, and encouraging new investment in refining capacity.
In the meantime, we all need to keep the shrill hyperbole about 'record high' oil prices in perspective. A barrel of oil now costs more than $40, but when adjusted for inflation, that price is less alarming. During past spikes, oil has cost well over twice that amount in today's dollars. Yes, high fuel costs could ultimately endanger the economic recovery, but there is no reason to believe that they will do so at this level.'
