Fuel Economy Standards – It’s Time to Crap or Get off the Pot

Remember when I said the Alliance for Automobile Manufacturers had cancelled their radio ad campaign against the proposed increase in fuel economy standards? Yeah, turns out that’s back on – in addiction to a competing ad trumpeting the benefits of pushing fuel economy standards to 60 mpg!

According to an article published by the Detroit Free Press entitled “Fuel Economy Standards Battle Heats Up on Airwaves,”  Aaron Kessler writes that things are getting pretty contentuous between the two opposing sides:

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Let's be honest, if we leave it up to Washington, this stuff is never going to get figured out.

The ad war over fuel economy standards ratcheted up again today, as both sides of the debate are increasingly turning to the airwaves to make their case and put pressure on Washington decision-makers.

Go60MPG, a coalition of environmental groups supporting a fleet average of 60 miles per gallon by 2025, is launching radio ads today on Washington-area stations touting the benefits of a high fuel economy standard.

The consumer-targeted ad will feature a voice saying: “What if there was a way to create tens of thousands of new jobs, keep billions of dollars in the U.S. economy that now go overseas, and also make it possible for you to pay less at the gas pump?”

It goes on to state that “experts say 60 m.p.g. would mean 700,000 new jobs in the USA,” and that “best of all for consumers, 60 m.p.g. would mean $650 billion in savings at the gas pump.”

He goes on to say:

The automakers’ ad campaign through the Alliance for Automobile Manufacturers was nearly canceled after opposition from General Motors, Chrysler and Toyota. But a second vote Thursday among all of the Alliance members meant the ads would continue through this week, and possibly longer. They claim a 56 m.p.g. target would cost jobs and limit consumer choices.

(CLICK HERE TO READ THE ENTIRE ARTICLE)

Personally, I think this whole thing is stupid and just goes to show how much corporations and their deep pockets influence our political system. That being said, this isn’t the Huffington Post, so I’ll just talk about fuel economy.

As I’ve stated before, I think the government needs to attack our fuel consumption from two sides:

  1. Increase fuel economy standards: we’re technologically advanced enough to get better fuel economy out of most vehicles. Just get it done.
  2. Increase the fuel tax: I truly believe this is the only way they will ever be able to get people to substantially alter their driving habits

Increasing the fuel economy standards helps to offset the pain at the pump brought about by the higher fuel costs, although probably not enough to make it a net gain/loss $0.

That being said, it’s time to crap or get off the pot. JUST DO SOMETHING!

What are your thoughts? Leave your comments below and, as always, please share this post using the social bookmarking buttons below – especially Facebook and Twitter!

Government to Allow Automakers Fuel Economy Loophole on Trucks and SUVs

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The White House is thinking of letting trucks and SUVs meet their own fuel economy standardsImage via Wikipedia

Remember way back when the Federal Government was pushing extremely hard and aggressive fuel efficiency standards on automakers? Environmentalists and consumers alike generally liked the new standards, and saw them as a big step forward.

Unfortunately, as is standard in Washington, there has been some reneging.

According to an article by Josh Mitchell and Sharon Terlep in the Wall Street Journal, White House officials are allowing auto makers to somewhat circumvent the fuel economy standards:

The White House is ready to let auto makers improve the future fuel efficiency of pickups and sport utility vehicles at a slower pace than passenger cars, say people familiar with the matter, a move that would benefit Detroit manufacturers.

Officials are scrambling to reach by early next week a broad agreement on a mileage target by 2025 of 56 miles a gallon, roughly double the current level. The concession is an effort by the White House to overcome broad opposition to the mileage figure by auto makers, including General Motors Co., which is still partially owned by the U.S.

While it may appear that the U.S. Government is doing automakers a favor, Roland Hwang, in an article entitled Light Truck Loophole Bad for Pickup Drivers, Oil Dependency and Pollution, says it may actually do automakers more harm than good:

While the U.S. automakers may complain that equal treatment for light trucks is bad for their profits, the opposite is true. By allowing big pickups and other light trucks to lag behind, the Detroit 3 run the risk of falling back into the bad habit that lead them to their downfall — becoming too dependent on fuel-inefficient vehicles.

Ford’s F-150 Ecoboost engine demonstrates that even big pickups can be more fuel efficient. The 40 percent purchase rate for the F-150 Ecoboost demonstrates that pickup buyers are willing to pay more to cut their gas bills. In fact, since light trucks generally lag behind the technology of their gasoline counterparts, these vehicles can improve at an even faster rate.

Equal treatment for light trucks makes sense. It will save truck driver thousands of dollars over the life of their trucks, cut our dependency on oil, and ensure the U.S. automakers don’t fall back into their bad habits.

I can definitely see both sides of the issue, however, I have to side with Hwang. I think it is best to hold automakers’ entire fleet accountable to the new fuel economy standards, not just vehicles that are more apt to meet the standards. Oil and gasoline are only going to get more expensive, so the less we can use the better, both in terms of the environment and our bank accounts.

What do you think? Leave your comments below!

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Gas Prices Still Heading Downward

Over the past two or three months, we’ve seen wild fluctuations in the economy, stock markets, and commodity markets.  People have been spooked that austerity measures will hurt the worldwide economic recovery (which, I would argue, never really started), which, in turn, would drive down consumer spending and demand for pretty much everything.

This, of course, affected the price of both oil and gasoline, as you can see in the chart below:

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As you can see, this chart (courtesy of GasBuddy.com) shows pretty wild fluctuations in the price of both oil and gasoline, with the most “violent” fluctuations occurring in the price of oil.  That being said, at least the general direction of both prices is downward.

As of this morning, oil futures were trading at $75.70, and the national average price of a gallon of regular unleaded gasoline stood at $2.72, which is down one cent from where it was last month, and exactly where it was one week ago.

Currently, only Hawaii ($3.45), Alaska ($3.38), California ($3.09), and Washington, D.C. ($3.06) are reporting average gas prices above $3 per gallon.  South Carolina currently has the lowest average price, at $2.40 per gallon.

Since we’re currently at the peak of summer driving season, it’s hard to envision a scenario where we could see gasoline prices spike higher from current levels.  That being said, a rough hurricane season or a major impact from the offshore drilling moratorium could change things and are worth keeping an eye on.

Oil Dips Below $70 Then Rallies

The price of a barrel of crude oil dropped below $70 yesterday afternoon in intra-day trading for the first time since late February thanks to continued concerns over both the European debt crisis and weaker than expected demand.

However, as the U.S. stock markets rallied to end the session in positive territory, the price of oil finished slightly over $70 per barrel.  In trading this morning, the price of oil has climbed to $71.64 per barrel.

Despite this morning’s small rally, the price of oil has fallen significantly over the last two weeks after hitting a nearly two-year high of $87.15 per barrel on May 3.

The corresponding response from gasoline prices has been relatively muted, with prices falling from $2.94 per gallon on May 5, to this morning’s price of $2.87 per gallon.  However, since we are nearing the start of the busy summer driving season, I suppose this makes sense.

Currently there are nine states reporting an average gasoline price above $3 per gallon, with Alaska reporting the highest price at $3.59 per gallon.  Oklahoma has the lowest state-wide average price at $2.65 per gallon.

Not so Fast for $3 Gasoline?

Turns out I may need to eat my words, because now it’s starting to look like $3 gasoline — this year — might not be so inevitable after all.

Thanks to the European debt crisis, over the past two weeks the price of oil has fallen nearly 16% from its 18 month highs, while the U.S. dollar has substantially strengthened in value against most other currencies.  These two things bode well for falling gasoline prices.

These factors have yet to make a big difference in the price you pay at the pump, however, since the price of gasoline is down three cents over the past week — from $2.92 to $2.89 — as we head into the busy Memorial Day summer kick-off, it’s obvious these factors are starting to have an effect.

Before we get too happy about maybe not having to deal with $3 gas in the near-term, it should be pointed out that the current price of gasoline is still 62 cents, or roughly 27% higher, than where we were at this point last year.

Currently there are ten states reporting an average price of gasoline above $3 per gallon, with Alaska reporting the highest price at $3.59 per gallon.  Colorado is reporting the lowest average price at $2.70 per gallon.

So, where do you think gasoline prices are headed?  Leave your comments below.

The Days of $2 Gasoline Coming to an End

Don’t look now, but after spending the past two months fluctuating between $2.58 and $2.66 per gallon, the price of gasoline is now quickly approaching the psychologically important $3 mark.

According to GasBuddy.com, the average price of a gallon of regular unleaded gasoline has climbed to $2.72. The last time prices were this high was back in October 2008.

Today’s price is roughly 3% higher than a month ago ($2.64) and a staggering 54.5% higher than a year ago ($1.76).

Currently, three states are reporting an average price above $3 per gallon – California ($3.02); Alaska ($3.34); and Hawaii ($3.43) – while three other states are reporting an average price below $2.50 per gallon – Colorado ($2.47); Utah ($2.49); and Wyoming ($2.49).

Much of the recent rise in the price of gasoline can be attributed to the run up in the price of oil, which, in the face of a strengthening dollar, has climbed from roughly $69 per barrel mid-December to today’s price of nearly $83 per barrel.

As I stated in my recent post “3 Reasons Why Gasoline is Going to $5 a Gallon,” I’m fully convinced gasoline prices are going to head much higher in the near future. What are your thoughts? Leave a comment below!

3 Reasons Gasoline is Going to $5 a Gallon

One of the benefits of The Great Recession has been a respite from high gas prices.  Unfortunately, I think this break will be over very soon and that record high gasoline prices are just around the corner.

Back in July of 2008, the average price for a gallon of regular unleaded gasoline hit a record high of $4.12 per gallon.  Within six months, the bottom had fallen out of the economy and the average price of gasoline had dropped to $1.60 per gallon.

Gas PricesThanks to drastic coordinated measures by the world’s central banks and governments, a total economic collapse was avoided, an economic rebound started to take hold, and gasoline prices climbed back to the $2.60 range.

While avoiding a total “end of the world as we know it” scenario was certainly something that had to be done, the money printing measures may have set us up to face much higher gasoline prices in the near-term future.

Below are the three main reasons why I believe not only will we break the record high prices set back in July 2008, but we can expect to start paying $5 or more for gasoline.

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Oil Above $78, Gasoline $1 Higher Than 12 Months Ago

Due to falling reserves, a slightly weaker dollar, and belief in the economic recovery, the price of oil has climbed to over $78 per barrel, which is its highest price since December 1, when the price stood at just below $78.50.

In turn, there has been slight pressure on the price of gasoline, which is up two cents for the week and now stands at $2.61 per gallon. There is usually a little bit of a lag between when swings in the price of oil hit the price of gasoline, so there will likely be a slight jump in the price of gasoline over the coming weeks.

Over the past month, the price of gasoline has moved in a very narrow range between $2.58 and $2.64 per gallon.

While this is certainly welcome news to cash-strapped consumer, the jump in the price of gasoline over the past year certainly is not. The price of gasoline is now $1 – or 62% – higher than it was at this time last year.

Currently, only Alaska ($3.77) and Hawaii ($3.68) are reporting state-wide average gasoline prices above $3 per gallon, while 14 states are reporting an average price below $2.50 per gallon. Missouri has the lowest average gasoline price in the United States at $2.41 per gallon.

Despite Recent Climb, Gasoline Prices Still 40% Below Peak

The national average price of a gallon of regular unleaded gasoline has fallen three cents over the past week to $2.60, and now stands at a nearly two month low.

This recent decline in the price of gasoline is pretty much in-step with the decline of the price of oil, which has been brought about by larger than expected reserve reports as well as a stronger dollar.

Despite the recent decline in price, the national average gasoline price is still nearly 60% higher than it was at this time last year.  Although, to put things in a little bit of perspective, the price of gasoline is still nearly 40% below the record high of $4.12 set back in July 2007.

Currently only two states – Alaska ($3.80) and Hawaii ($3.34) – are reporting average prices above $3 per gallon. There are now 18 states reporting an average price below $2.50 per gallon, with Oklahoma coming in with the lowest state-wide average price at $2.38 per gallon.

Oil Falls Below $70; Gasoline up 60% in 12 Months

The price of oil has fallen below $70 for the first time since early October, thanks to increased U.S. petroleum reserves as well as a strengthening dollar. Since hitting its 2009 high of $82 per barrel on October 25, the price of oil has fallen nearly 15%.

Despite falling oil prices, the national average price of a gallon of regular unleaded gasoline has remained relatively flat over the past month, falling just two cents from $2.65 to today’s price of $2.63.

While the price of gasoline is still well below the record highs set back in July 2008, it is still up nearly 60% from a year ago when the national average stood at $1.65 per gallon.

Currently only Hawaii ($3.53) and Alaska ($3.22) are reporting a state-wide average gas price above $3 per gallon, while 14 states are reporting an average gas price below $2.50 per gallon. Oklahoma currently has the lowest average price at $2.43 per gallon.

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