Spiking Gas Prices…Our Wake-Up Call
By Ron Cogan, General Manager, GreenCar.com
By Ron Cogan
At a time of enduring gasoline and diesel price spikes, there is the
realization that a fundamental shift has occurred. It’s not
just the prospect that the age of cheap oil is over. That’s
already been said, and for good reason. A tightening supply of any
commodity has a way of driving prices upward, and oil is no exception.
Supply disruptions in various parts of the world, sabotage on oil
pipelines in others, worker strikes, fires or other problems at a
refinery or two...all tighten oil supplies and tend to lead to price
spikes.
Is this an anomaly? No longer. The concept of “just-in-time”
delivery seems, in an insidious way, to be transitioning to the energy
industry. There is little margin for error or accommodation for disruptions
in oil flow. While just-in-time delivery works for the auto industry,
it’s not a concept that should ever be applied to energy supply
because this, by extension, impacts national security.
How could it be viewed otherwise? We use 20 million barrels of oil
per day, about 12 million barrels more oil daily than we produce.
Does this make us vulnerable? Of course. Like other industrialized
countries so dependent upon oil to drive their economy, the connection
between oil flow and national security is strong, and deep.
It is time to pay an increasing amount of attention to developing
fuel alternatives. This works toward air quality goals, of course,
since most of the alternative fuels examined in recent years offer
distinct environmental advantages. But to be truthful, energy security
is becoming as much a motivator these days as environmental improvement
for the encouragement of alternative fuels.
The Arab oil embargo of 1973/1974, along with oil shortages experienced
in1979/1980, proved our vulnerability in the face of serious oil disruptions.
Even though measures have been taken to lessen this vulnerability,
we are even more dependent on foreign oil now than we were then. This
is dangerous considering the mushrooming auto markets in China and
India and the demands they will place on the world’s available
oil supply in just a few short years.
Ironically, today’s price surges and the public indignation
that follows could be a good thing. This harsh assessment focuses
on a simple fact: When budgets are continually assailed by significant
and unplanned fuel cost increases, action will inevitably be taken.
This is the unexpected benefit – the wake-up call – that
the past year’s spiking gas prices may be providing. It’s
clear that alternatives must be found. New answers, or perhaps answers
we’ve considered but not acted upon, should be brought to bear.
Alternative fuels and the vehicles that can run on them are part of
this answer.
Better a wake-up call, after all, than a sudden disruption of the
imported oil upon which this country has become so dependent, followed
by a panicked release of millions of barrels of emergency oil to the
market from the nation’s Strategic Petroleum Reserve. Even at
its current inventory of 670 million barrels, that reserve has its
limits…as do drivers who tire of the endless cycle of fuel spikes
that seem so “normal” today.
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