Holy cow!

by David Grand
August 11, 2005

Like me, that's probably one of the milder oaths you utter, when you pull up to the gas pump and see the prices jacked-up even higher, and watch a week's grocery money being poured into your gas tank. And I used more profane words last Friday, in seeing the beating my mutual funds took when a barrel of oil topped $62.

But then again, I'd really be bitching if I lived in France, where, as of February 2004, the average price for a gallon of unleaded premium in US dollars was $4.80; in Germany, $5.13; and in Italy, $5.08. However, it was only $1.85 per gallon in Canada.
That's most likely due to its much smaller population and, thence, less demand for oil than the US, burning as it does a quarter of the 80 million barrels produced in the world each day to meet global demands, that are coming ever closer to exceeding the world's known production capacity, heightened by the growing need for oil in industrializing countries like China and India. And while there's 2 to 3 trillion barrels of oil underground, once it's used up it's gone for good.

I also take consolation in recalling the vivid memories of the great oil crisis, blamed on OPEC, in 1973, when fights often broke out in the long lines at the filling stations. And for a while Sunday sale of gas was banned. Once the price of gasoline doubled, the oil crisis faded as mysteriously as it began.

Apparently, there's no easy solutions for dealing with the current oil crisis, other than invading all the OPEC countries and taking over their oil reserves, which unfortunately we presently lack the military strength to do. Some more practical alternatives are: producing cleaner burning coal, greater use of nuclear power, converting coal to hydrogen, and building more refineries to process the oil (the existing 148 of 'em being overworked and often breaking down).

Now, congress finally passed an energy bill, costing $14.5 billion in tax credits and spending. Republicans hailed it for its free-market principles, while Democrats called it corporate welfare for the well-off fossil-fuel industries. The big winners are the electric utilities (that'll save $3.1 billion over 10 years), the coal industry ($2.9 billion), and the oil-and-gas business ($2.7 billion).

But it didn't impose higher fuel standards on automakers; and it will have little or no impact, as Bush confirmed, in lowering gas prices or reducing US dependence on foreign oil. And are you ready for this? At the 11th hour, a $1.5 billion research fund was added to aid oil and gas companies in the Texas district of House Majority leader Tom DeLay.
But whoopee, it does extend daylight-saving time by four weeks, starting in 2007, with the extension projected to save 100,000 barrels of oil a day over that additional month. But as one columnist put it, "since the US uses about 21 million barrels of oil a day, that's like trying to cure obesity by forcing McDonald's to serve diet sodas with its Big Macs and super-sized fries."

Looking back at the gas prices in this country in the 20th century, we've been ripped off even more, if we'd lived in 1919, when the price for a gallon of regular gas was $0.25 ($2.75 in 2004 dollars); in 1929, when the price was $0.21 ($2.34 in 2004 dollars); in 1939, when the price was $0.19 ($2.52 in 2004 dollars); and as recently as 1979, when the price was $0.84 ($2.21 in 2004 dollars). We got a respite in 1989 and 1999, when the price for the former was $1.02 ($1.40 in 2004 dollars), and the latter was $1.17 ($1.27 in 2004 dollars.) And it wasn't until May 2004 that we crossed the $2 threshold at the pumps.

My, how times have changed, when in 1924, the Model T Ford, with its 20 hp, four cylinder engine, sold for only $290, and got up to 30 miles per gallon, with 15 million of 'em sold over 19 years. And as Henry Ford told his workers, "You can paint it any color, so long as it's black."