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High gas prices force choices

Alan Braunholtz

I don’t mind the relatively high price of gasoline. I’m hoping it will stay high long enough for people to start looking at more economical cars and whether the long commute for a larger house trade-off is worth it.I’ve always thought that wasting 10 percent of your waking hours driving is not worth a few extra square feet of unfinished basement. No one measures the percentage of their life wasted behind the wheel, so it takes a rise in gasoline prices before we notice how much we are driving.Also, it’s fun in a smug way to demonstrate a small car’s miles per gallon by arriving, filling up and leaving before the rather large SUV you drew up beside is even half full. A recent pickup driver grimacing at the tumbling dollars and cents didn’t appreciate my combination of small car and Gore Range Natural Science School window sticker, though.”It’s all your fault. You naturists caused this.” He scowled. Yes, we’ve been planning it for years, why I drive a small car from the 1980s. And to hide our power, we’ve allowed the continuous destruction of our wild heritage and rollback of any environmental laws that may have moved us toward a sustainable-use ethic. This is all a ploy to lull shortsighted industries into the false sense of complacency that their power and huge financial political contributions do control government policy.He didn’t seem to agree, and as he’d apparently picked his truck – an F350 – by selecting the model with the number that matched his body weight, I left. There’s an irony here. Shortages caused by overconsumption are blamed on those who say there are advantages to consuming less. Everyone loves to blame anyone but themselves.Gas prices are high right now mainly due to a shortage of refined fuel. Refineries take a long time to build and are expensive. It makes sense to build refineries close to their source of oil, which since we import most of ours, is usually on the coast. The coasts are a desirable place to live and there’s opposition from the real estate crowd. Environmental regulations to control the pollution do increase the time and cost, but then building refineries that are healthier to live near should generate less residential opposition. This might be a swings and roundabouts thing. We also have a hodgepodge of blends, depending on the season and state. The Midwest adds ethanol to support their corn farmers, and some states want less air pollution than others. Why not choose the cleanest and go with it? Breathing is almost as important as driving, and fewer blends makes refining easier. The main reason we have a shortage of refineries is that gas companies didn’t want to build any. Until 2000 we had an excess of capacity. This excess started in the 1980s when that fuel crisis prompted people to consume less to save money. In 1981 there were 324 refineries and now we have about 144. Deregulation and government regulations drove smaller inefficient plants out of business. The big boys didn’t mind this at all. Excess capacity only created low prices and profits. There are memos where large refiners support tough regulations, knowing this will shut down small independent rivals. Now five refiners control 56 percent of the market, and they’re doing very well from this gas shortage. Releasing oil from the strategic reserve does little except raise their profits. There’s still a gas shortage, but now there’s a supply of cheaper oil, so margins rise. The increased margins are predominantly going to the refiners. The gas stations remain at pennies on the gallon with a lot more thefts.What happened in 2000 to switch an excess into a steady shortage? Gas felt cheap in 2000 – 60 percent cheaper in terms of buying power compared to 1981. Cheap gas, auto ads and egos fueled a rapid growth in gas guzzling SUVs and pickup trucks. This caught the refineries by surprise and they’ve enjoyed an increased demand for their product ever since. They’re a little wary of building too many refineries and then getting caught with an excess of production again.Despite Dick Cheney’s sneering putdown of conservation as little more than “a sign of personal virtue,” it’s probably the quickest way to get on top of high fuel prices. Even President Bush asked us to try it after hurricane Katrina. It’s the smart thing to do, and we should have done it a long time ago.It also makes sense to conserve the oil and gas we have under our lands. We can’t drill ourselves out of dependence on imports, but why not use other countries’ oil now when they’re available and save ours till they get really short? This would help us through the inevitable transition from an oil to a mixed a fuel economy with less pain. Our government is focused on the short-term profits of the oil industry at the expense of our long-term security. Recent bills like the Gasoline for America Security Act (GAS), which expedite refinery construction and others that fast track drilling, are a double whammy. They may reduce short-term fuel prices and ramp up our domestic extraction, with the net result that we’ll be even more reliant on oil with fewer reserves 20 years down the road. We’ll have more exposure to Middle East politics, the world oil market and the uncertainties of climate change.I don’t like the gas companies raking in huge profits at our expense. They’re getting us three ways: at the pumps, with taxpayer subsidies and a free pass to ignore the environmental regulations that protect our air, water and health.The recent high prices provide an opportunity to jump start all sorts of alternative energy programs. The different technologies we’re seeing now are the result of the research stimulated by the fuel shortages of the 1970s.I’d prefer to pay a gas tax for energy research than give the money to Exxon. Long term, the price wouldn’t be much different, since conservation reduces our demand. The money raised could support all types of alternative and clean energy programs.Investment advisers insist on security through diversification. Our energy policy should be no different.Alan Braunholtz of Vail writes a weekly column for the Daily. Vail, Colorado


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