A couple of weeks ago, No. 2 son was complaining of paying $2.75 for a gallon of gas. He lives near West Chester, so I dismissed his bellyaching as part of the price of living closer to the big city. Two days before, out here in the sticks, I had filled up for $2.43. I was told I didn't know what I was talking about. Not a charge previously unheard.
Out and about the next day, I take note of the posted prices at Ledger Land gas stations. All stand at, or exceed, $2.75 for a gallon of regular. Humiliated yet again, I am flabbergasted by the meteoric pace at which gas prices are rising. Several days later a radio announcer reports that the price of crude on the international markets had broken the historic $75 per barrel price marker. Hadn't it just gone through the $70 ceiling?
Then, adding insult to injury, I read in the newspaper of the exorbitant compensation paid to oil executives. We'd already been blasted with word of the record profits earned by them at the end of the first quarter of the financial year. This on top of what most folks considered obscene returns in 2005. One reporter calculated that during his tenure as head honcho at Exxon Mobil, including all forms of compensation from stock options to pensions, Lee Raymond had been paid over $140,000 an hour.
The current spike is attributed to the switch over from the additive MTBE to the infusion of ethanol in the nation's gas supply. Tanks have to be cleaned and, as supplies of ethanol permit, refilled with the mix. This in addition to the fact, as we are told at this time every year, gas supplies falter and prices inevitably rise as refineries switch production from heating oil to auto fuel. Law requires that the ethanol process be completed by June. Just in time for peak summer driving, which, by itself, boosts demand and further drives up the price.
Such is the sorry picture at the pump, but what of the interconnected global scene? Saber-rattling going on with Iran is creating alarm in the oil futures market. Geo-political tensions, and the assertion of Islamic fundamentalism in the greater Persian Gulf region, from Iran to Iraq are making traders skittish. Double digit growth rates in China and India have their trade representatives exploring every nook and cranny of the globe in search of new energy sources. They too must feed the beast, even at $75 a barrel.
Combine these price-pressure factors with what we are told is a dearth of oil refining capacity and prospects for satisfying, what President Bush has latterly labeled, America's 'addiction' is bleak indeed. So as we fork over $50 for a fill up, there are plenty of places to spread the blame. Savvy politicians call for investigations of generally assumed price gouging. Some demand a windfall profits tax. They'll give the money back to the little guy. Shame on the oil giants. Thanks for the vote.
Despite Bush's admonition, few of us openly concede our role as consumers. Much like the smoker, John Q. Public has known for decades that the day now dawning at the gas pump was merely a matter of time. Yet, we were blinded by the short term fiction of $10 a barrel gasoline and seduced by auto company ads urging us to drive gas-guzzling behemoths. With five percent of the world's population, Americans go on burning 25 percent of the world's energy.
So maybe the current price scare is precisely what's needed by way of a wake-up call. Perhaps now, Americans will begin emulating Europeans who pay upwards of $6 per U.S. gallon, and as a consequence drive the tiniest of vehicles to make ends meet. Put us all in Prius or a Scion and the gas crunch is over - for now at least. For the immediate future, economists predict that gas prices will reach a point at which demand will fall off and trigger a price decline. Similarly, for the foreseeable future, how much Americans pay for gas will be greatly determined by how much they insist on buying.
So when you next hear yourself griping about an expensive trip to the gas station, remember if all Americans bought less gas they would be paying less for it. There's nothing the oil companies could do about that, save suck it up. But there is much more we could do for our consuming selves. Until we do, if you won't trade the Hummer for a Mini, quit your complaining.
Tav Murray lives in Christiana. His e-mail address is email@example.com.