The American economy has suffered many financial blows in the recent years, but none have such a drastic and heavy effect on the average American than the rising gas prices. A solution to the Gas Crisis, a new and formidable crisis involving the high cost for gasoline powered transportation, must have widespread results across American commuters to either increase the efficiency of drivers, drastically lower gas prices, or provide alternate modes of transportation, consequently allowing for American commuters to be able to efficiently transport themselves at a moderate price. Gas prices are extremely high with respect to the overall timeline of gas prices, and expected to increase greatly. The average American drives 13,746 miles per year (“Average Annual Miles per Driver by Age Group”). At the time of this report, the average price per gallon (across America) is $3.707 (“AAA’s Daily Fuel Guage Report”). The average American passenger car MPG, or miles driven per gallon, in 2008 is 22.6 miles per gallon (“Table 4-23: Average Fuel Efficiency of U.S. Passenger Cars and Light Trucks“). Using simple mathematics, one can find that, if gas prices and average miles per gallon remain static, the average American would be spending $2,254.71 per year on gas. That’s almost 5% of the average American house hold income (“Average Annual Miles per Driver by Age Group”). These numbers are only valid if the gas prices remain static, however there is an unfortunately high chance that they will continue to increase in the future. Yes, the average MPG will also increase, however at a slower rate than the increase in price of gas per gallon. With the current conflict in Libya and in much of the Middle East, the limit to which gas prices can ... ... middle of paper ... ...le&node=&contentId=A16228-2002Jul16¬Found=true> “AAA’s Daily Fuel Guage Report”, Oil Price Information Service; AAA. N.p., 6 April 2011, n.d. . “Average Annual Miles per Driver by Age Group”, Federal Highway Administration, N.p., 6 April 2011, 4 April 2011. . “How much does the Average American Make? Breaking Down the U.S. Household Income Numbers“, FedUpUSA, Stephanie, 6 April 2011, 7 January 2010. . “Table 4-23: Average Fuel Efficiency of U.S. Passenger Cars and Light Trucks”, Research and Innovative Technology Administration, N.p., 6 April 2011, n.d. .
www.fueleconomy.gov: The official U.S. Government Source for Fuel Economy Information. U.S. Department of Energy, 5 Jan 2012. Web. 5 Jan 2012.
Gasoline is one of the many conversation starters anywhere you go. People have different opinions on why gasoline prices are fluctuating at such a rapid pace. Some Americans have chosen a way of thinking towards the prices. Whether it be making up rumors or just plainly trash talking towards our government. You make ask yourself the same questions many economist do, why has the price of oil been dropping so fast? Why now? This a complicated question, but it boils down to the simple economics of supply and demand. Supply and demand means a relationship between how much of a particular product is available and how much of it people want, and especially the way that this affects the level of pricing. Now of course there would be a shortage of gasoline during the summer time when everyone is traveling
Schultz, William. “Would You Drive 55?.” Time U.S., 25 Jul 2008: n. page. Web. 5
To understand the increase in gas prices, one must first identify the distribution of dollars paid per gallon at the pump. According to the U.S. Energy Information Administration (eia) in 2010, the annual average paid at the pump consisted of 68% crude oil, 7% refining, 10% distribution and marketing, and 15% taxes (see Fig.1). This shows an increase of crude oil over the 2000-2009 average of 51%. (e. I. Administration)
In 2004, crude oil producers around the world expected a 1.5% growth in the world’s demand for crude oil. The actual growth rate was more than double the projections at 3.3%. This growth was due to rapidly industrializing of foreign countries such as, China and India. Therefore the lack of crude oil affected the supply of gasoline to consumers at the pump.
scream when it hits a $1.35 to $1.75 a gallon, which if adjusted for inflation
Noss, Amanda. "Household Income: 2012." American Community Survey Briefs. N.p., n.d. Web. 9 Apr 2014.
American demand for petroleum began to grow in the beginning of the twentieth century. The national population was increasing at a rate of five million people per year, global fuel prices were consistent and low, and expansive suburbs were being developed to house the growing urban workforce. These trends greatly encouraged personal vehicle use, and the creation of President Eisenhower’s Interstate Highway System in 1956 enabled these cities and suburbs to be seamlessly connected. Before the highway’s creation, people were limited in how far they could travel, and more than seventy-five percent of the roads in America were in poor condition. Within the first year of the highway’s construction, however, American’s were buying an average of
Fuel prices is an area of concern for the motor carrier industry. Fuel prices are at an all-time high, driving the industry to make drastic changes. Individuals in the industry believe that by reducing the demand for fuel is the best way to address the current fuel issue. One of the leading alternatives to this fuel issue could be natural gas.
In 1970 oil reserves became more scarce, leading to a decrease in production, while consumption continued to grow rapidly (Wright, R. T., & Boorse, D. F. 2011). In order to fill the gap between rising demand and falling supply of oil, the United States became more and more dependent on imported oil, primarily from Arab countries in the Middle East. (Wright, R. T., & Boorse, D. F. 2011). As the U.S and many other countries became highly industrialized nations, they became even more dependent on oil imports. With demand being higher than the actual amount of supply, prices kept rising reaching a peak of $140 a barrel in 2008. (Wright, R. T., & Boorse, D. F. 2011).
The future American commuter will undoubtedly have to transition from the use of fossil fuels to new alternatives due to the diminishing availability of the nation’s oil resources. How will America respond to this upcoming issue? It is difficult to predict which alternative fuel source America will ultimately choose, but with the premier of Nissan’s electric powered Leaf and other companies; such as Tesla Motors and Chevy, with their electric cars ready for market, the electric car may be winning the race to become the new standard for the gasoline alternative. Electric cars resolve long standing environmental issues, but it will need to maneuver around many roadblocks to become a marketable consideration for the general public. The cost of electric cars, currently on the market, makes them an impractical purchase for the average consumer. If cost is not the growing concern in today’s economy which prevents the consumer from considering this option; they may deny the technological advance due to battery storage capabilities and the inadequate infrastructure in place to refuel and provide for them.
The substantial increase in the demand for EV’s came just in time as we are slowly but surely running out of oil. Some estimate that by the year 2040, 35 percent of all vehicles will be electric (Sullins, 2017). An article from the U.S. Department of Energy stated that “Electric vehicles hold a lot of potential for helping the U.S. create a more sustainable future. If the U.S. transitioned all the light-duty vehicles to hybrids or plug-in electric vehicles, we could reduce our dependence on foreign oil by 30-60 percent, while lowering the carbon pollution from the transportation sector by as much as 20 percent (energy.gov, 2014). It’s obvious that gas-powered vehicles have harmed our planet with their emissions. Although EV’s cannot reverse that damage that has been done, they can eliminate, or at least slow down, the inevitable demise that our planet is headed towards. Along with the beneficial environmental factors that correspond with electric cars, there are also beneficial financial factors. The average American spends about $2,000 on gas annually. In the future, charging stations will charge roughly $12.00 for a full charge, which is about 300 miles. This means that the average American will save about $1,400 per year on these specific car
With a gasoline-fueled vehicle, buying gas to operate your car is a never-ending process. With the high price change of gasoline and oil, operating a gasoline-fueled vehicle tends to be very costly. While there are some types of small gasoline vehicles that get much better gas mileage than larger vehicles, even the most powerful gasoline cars will normally desire a contribution every month. According to some experts the only way a mainstream market for green vehicles wills materlize is with a pronounced and prolonged rise in fuel prices. (Buss, 4)
With the current spike in oil prices, many American consumers have asked, 'what is going on?' In order to fully understand the current situation and how it is affecting the economy one must look at a variety of factors including: the history of oil crisis in the United States, causes of the current situation, and possible outcomes for the future. It is only after meticulous research in these topics that one is prepared to answer the question, 'what is the best possible solution to the oil crisis?'
As the driver pulls up next to the gas station to fill his car up with gas, he sees a small piece of paper with writing on it taped to the old rusty gas pump. Surprised, he gets out of the car to read the paper, “Due to the gasoline shortage, we will not be selling gas at this time.” According to the EIA.gov website, there are over 200 million vehicles being used today, and gasoline is the number one transportation fuel used in the United States. We can safely say that gasoline is a pretty important. If there was a shortage of gasoline, it would have a huge effect on this country. First a gas shortage would affect the price of fuel and then suburbs would become less attractive; it would also increase the use of cars that are less expensive to fuel and the use of public transportations.