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Gas prices hit an all-time high of $3.25 today, breaking the previous record of $3.24 set in May of last summer. To help put this in some perspective, exactly one year ago the national average gas price was $2.56. For you non-math people out there, that constitutes a jump of over 25 percent.
In addition to the nation-wide record, every state is now reporting state-wide average gas prices above $3 per gallon. New Jersey has the lowest average price at $3.01 per gallon, while Hawaii has the highest average price at $3.68 per gallon.
Unfortunately, it doesn’t appear as if things are going to get much better any time soon. The price of oil, which is a major factor in how much we pay at the pump, has skyrocketed over the last several months and shows no signs of stopping any time soon. In fact, Goldman Sachs is now warning of $200 oil.
Additionally, we’re right around the time of year where refineries will switch over to “summer blend” gasoline, which is more expensive than regular gas. Summer blend gasoline (something that has essentially become Federally mandated) contains special (read: more expensive) additives that help reduce emissions and decrease smog.
Unfortunately, as I’ve said on several occasions, this couldn’t be coming at a worse time for most Americans. The housing market, which is the single greatest source of wealth for Americans, is in the midst of a prolonged down cycle, which isn’t likely to end until next year at the earliest. Consumer confidence is plunging, the dollar is tanking, jobs are becoming less abundant, food is becoming more expensive… I think you get the point.
As long as the current economic trends continue – which is very likely considering most signs are pointing to things getting much worse – gasoline prices above $3 a gallon are really going to hurt American consumers. If gas hits $4 this summer, look out below!
Hopefully higher gas prices will encourage us to do a better job conserving fuel and force us to navigate towards more environmentally friendly vehicles and energy sources. While these may be the only bright spots in paying more money for gasoline, in the end today’s pain may be worth it if it truly is the catalyst that helps us get our act together.
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I guess the big question is what can we do to help our government stop being paralyzed by the environmentalists and actually take some action?
Our government is paralyzed by all manner of forces. But what action would that be? The latest estimate I’ve seen shows that all reserves, known and estimated, in U.S. territory (around 23 billion barrels) would suffice to supply our current demand for approximately three years. Note that this includes known and estimated offshore oil, Alaskan oil, etc. So, if the environmentalists all slipped into comas, the government should do what exactly?
start drilling our own oil. start using other forms of energy like nuclear. I admit that there are a lot of forces at work besides just environmentalists, that’s just the one that I really don’t get.