gas prices

It’s shifting consumer demand that will drive increases in vehicle fuel efficiency

I frequently read about perceived (or alleged) disagreements between the environmental community and the auto industry. A few of them are real disagreements over policy, many are practical disagreements over how best to achieve common goals, but many perceived disagreements are not, in fact, disagreements at all.

For instance, some people believe the auto industry stands in the way of higher average fuel efficiency in the U.S. That's just not the case, which I'll explain in a moment. First, an area of agreement: in his New York Times column, Paul Krugman writes about fuel efficiency and our automotive future:

Gallup shows Americans making smart choices to break the gas habit.

It took soaring fuel prices for old habits to shift. But they're shifting alright. Just take a look at these poll results -- Gallup finds that big numbers of Americans are making changes in their daily lives to deal with higher gas prices. Here's a snapshot:

Dems and GOP agree to stop filling Strategic Petroleum Reserve

The Senate today approved legislation to temporarily suspend deliveries to the nation’s Strategic Petroleum Reserve, by a vote of 97-1. The measure was inserted as an amendment to a flood insurance bill, and was opposed only by Sen. Wayne Allard (R-Colo.). The Energy Department sends 70,000 barrels of oil to the reserve every day, a […]

Why it took us so long to internalize the rise in gas prices

With gas at $3.50 a gallon in April, the U.S. mainstream media is replete with stories of drivers abandoning SUVs, hopping on mass transit, and otherwise cutting back on gasoline. Yet a year or two ago, when pump prices were approaching and even passing the $3.00 "barrier," the media mantra was that demand for gasoline was so inelastic that high prices were barely making a dent in usage.

Which story is correct? I lean toward the more "elastic" view, and here I'd like to share some of the data that inform my belief.

I've been tracking official monthly data on U.S. gasoline consumption for the past five years and compiling the numbers in this spreadsheet. You'll find that it parses the data in several different ways: year-on-year monthly comparisons (e.g., March 2008 vs. March 2007), three-month moving averages that smooth out most of the random variations in reporting, and full-year comparisons that allow a bird's-eye view.

Here's what I see in the data:

Colbert on gas prices and oil profits

(thanks LL!)

We need to be freed from gas, not the gas tax

John McCain’s proposal to institute a gas tax “holiday” during the summer driving season is as clear an example of a pander as one is likely to see during election season, but its inclusion in a major economic policy speech suggests that this is no easily ignorable one-off. As Joseph Romm notes, any hope progressives […]

Dingell takes his ‘hybrid tax’ off the table

The carbon tax camp lost a powerful congressional voice yesterday when Rep. John Dingell (D-Mich.) announced he was taking "off the table" the hybrid carbon tax proposal he floated last fall that featured a national carbon fee, supplemental increases in taxes on gasoline and aviation fuel, and a reduction in the mortgage interest deduction for super-large houses.

In a prepared statement, the Michigan lawmaker, who for much of his 54 years in Congress has chaired the House Energy & Commerce Committee, reiterated that "economists and other experts continue to inform us that a carbon tax is the most effective and efficient way at getting at the problem of global warming." Dingell also noted that his online poll query, "Do you approve of the idea of a carbon tax?," earned a "Yes" from 61 percent of the 2,900 respondents.

In his statement, which was first reported yesterday in The Hill, Dingell pointed to rising gas prices and the gathering recession, saying, "Times have changed; our economy has taken a hard downward turn and now is not the time for us to put any additional financial burden on the working families of Michigan or this nation."

The irony is that a revenue-neutral carbon tax would not act as a drag on economic activity, since the return of the tax revenues to Americans via tax-shifting or dividend rebates would fully offset the higher costs of fuels and energy.

Americans reduce gas consumption as prices continue to rise

Shocked by high gas prices? You're not alone: according to the lead story in today's Los Angeles Times, prices are at a record high.

The gravity-defying price of oil shot through another barrier Monday by briefly touching $103.95 a barrel in New York trading, the highest cost ever for black gold even after adjusting for inflation.

But the experts say it's not so much a rise in demand that is pushing up the cost, but a fall in the value of the dollar.

"I don't think it's a coincidence that the price of oil hits an all-time high around the time that the dollar hits an all-time low against the euro," said Ken Medlock, an energy studies fellow at Rice University's Baker Institute. "The amount of dollars you have to give up for a barrel of oil is going to increase because the dollar is purchasing less and less."

In response, according to an excellent story in Monday's Wall Street Journal, Americans have at last began to turn against gasoline.

There are limits to the positive environmental change we can expect from high gas prices

You can scarcely pick up a paper or turn on the television these days without hearing the word recession. Leading economic indicators have wiggled in different directions over the past few months, but the general trend appears to be negative. The conventional wisdom points toward an economic downturn of some kind during 2008, and businesses […]