A gas-price surprise and a possible act of Congress
Posted on April 2nd, 2007 – 6:05 AMBy Roadguy
As most everyone knows, gasoline prices have been doing their upward thing again (a Strib story is here; a USA Today story is here). So when Roadguy drove past this sign on West Broadway the week before last, it certainly caught his eye:
Aside from the oddly placed decimal point, it seemed like quite a good deal. Then I looked around and took in the wider view. Not only was the low price a thing of the past…
… the gas station itself was history. (I didn’t check to see whether the pumps were still functioning in some rogue sort of way.)
Relatedly, the Consumers Union sent Roadguy (and probably a few million other people) an e-mail last week urging recipients to tell Congress to pass stricter fuel efficiency standards so that future vehicles use less gas and are cheaper to operate. You can click here for a web page that apparently forwards your comments to Congress, and it includes a form letter that you can personalize or even rewrite (though I’m not sure what happens if you rewrite it to say that you oppose the fuel standards).
Roadguy will not be forwarding your comments to Congress, but he’d still like to hear your thoughts about mileage standards and fuel costs, so post ‘em below.
29 Responses to "A gas-price surprise and a possible act of Congress"
When it comes to gas prices I think we have nowhere left to go except for higher prices.
Can anyone explain to me why the prices significantly drop around the time of political elections? My thought is that the politicians are all in bed with the oil and gasoline companies.
Could there possibly be any other reason?
I am not a conspiracy theorist, generally, but if the gas prices aren’t part of a conspiracy, then I am totally lost. That being said, gas prices have never bothered me.
There is a closed gas station on Broadway just by the Minneapolis/Robbinsdale border that has gas prices on the sign that say 1.01 or something close to that.
When I was living in Ohio, in a tiny town outside Cincinnati, there were two gas stations side by side. One was always 2 cents fewer and always busy, whereas the other station was never busy because the sign said 2 cents more. Well, the secret was that the second gas station was actually 1 cent less than the first station all the time, but the person working there never changed the sign. So, not only did I get to save a penny, I never had to wait because everyone went across the street. That was when I gave up on gas prices–when people would wait for 15+ minutes to save only 2 cents per gallon of gas, rather than check out the station across the street, save 20 minutes, and find out you were really saving a cent for each gallon after all! People talk about how time is money, but apparently time is worth less than 2 cents a gallon. 
With the addition of electronic engine controls there have been some fairly significant improvements in fuel efficiency in the last 15 years and there are probably some more improvements in our future. These improvements will most likely be incremental and relatively small. That said, people want their 4,000 lb car to get 30 mpg. Well, that’s not going to happen. It’s not some grand conspiricy of the oil and car companies. It’s mostly physics (f=ma, it’s not just a good idea, it’s the law).
There are essentially four things that determine fuel efficiency; weight, aerodynamic drag, mechanical friction drag, and amount (and frequency) of acceleration. That’s pretty much all there is. The biggest influence is weight but the others can be substantial. You want good gas mileage? Get a small, slippery, light car and drive it gently. Nearly every manufacturer offers at least one small high mileage car and has done so for at least 30 years. Most of them sit on the lot because no one wants them.
Fuel efficiency standards aren’t going to change physics.
Perhaps it’s a test-station! You know, credit cards only… we can eliminate human beings all together! It’s the wave of the future.
Dale I disagree completely with your thoughts… I agree that those are the basics to fuel efficiency, but the biggest factor is acceleration and engine size… Lets be honest americans can only think one way, bigger is better… oh this engine is bigger, this car must be better. That means lower fuel efficiency. Not to mention the number of people that over accelerate when the light turns green (to counter those that run the red lights of course).
I have a 3,000 lb car that gets 32 miles to the gallon no problem… What we really need are the new techonolgies to come into play and congress to set aside grants for new ideas. Since it’s clear the car companies have no motivation to do it.
Becky: actually, this is basically what Sam’s Club does. They have a lot of pumps in a high volume location with credit cards only (to make things quick). They have to have 1 person overseeing the pumps by law, but the lack of a convenience store, no free air, no window washer squeegees, etc., is probably why they’re 5-10 cents per gallon less than the station 1/2 block away. It works fine for me, I never go inside anyway!
As far as economy standards, I’ve given up on the Bush Administration. I’m hoping the next president has the leadership to bring our economy standards to the same as China’s, at least. After 6 and 1/2 years, 1 and 1/2 more isn’t that long to wait.
My random thoughts:
One, at $201.90 per gallon, no wonder the gas station is no longer in business. . .
Two, consumers driving their gas-guzzling SUVs have proven not to care about the environment. The goal of the auto industry in a supply/demand economy is to give shareholders, executives and consumers what they want while staying within existing legal mandates. Doesn’t that mean our only recourse is to use those legal mandates to try to protect the environment?
Three, isn’t spring break wonderful for the rest of us left in town? My morning commute was almost enjoyable. (OK, that may be getting a little carried away.)
Heh, fuel costs. My theory is that there is a statistically significant relationship between the wildness/implausibility of a gas prices conspiracy theory and the number of years that have elapsed since the poster took an economics course (if at all).
If you must direct your ire at someone or something, maybe OPEC is a better target, since they control so much supply and how much of it to mete out to the global markets. Or commodities traders, who speculate and hedge based on all the geopolitical conflicts that may (or may not) disrupt the production or transportation of oil.
I suppose in a roundabout way you could hold politicians in this country to blame for the fact that we have something like two dozen different gasoline formulations in use throughout the country (I don’t know the exact number). Some of them can only be produced at specific refineries, subjecting us to more possible supply bottlenecks than if all 50 states could just agree to use the same formulation of gas.
Given a choice between these elaborate politicians/elections conspiracy theories and the law of supply and demand…I will take supply and demand 100 times out of 100.
As much as I would like to soley blame SUV drivers for not carrying about the environment, it wouldn’t be logical. My only beef with them is they accelerate too slow & cannot corner worth a lick. There are plenty full-size pickups & minivans which get poor MPG. While some people (contractors, people with large families, & people who tow on a semi-regular basis) need one of the forementioned vehicles, most people can get by with a mid-sized sedan. Having lived in Germany a few years ago, I seen plenty of couples with 1-2 kids driving Honda Civic sized vehicles. While I plan on having a kid someday, I simply wouldn’t need a vehicle larger than the Nissan Maxima I currently drive.
If you own a flex fuel vehicle that can use E85 as well as gas, it is averaging about 37 cents a gallon less than regular unleaded in many of the 300+ stations that sell the cleaner-burning alternative fuel in Minnesota. For more on E85 (including a unique E85 price forum) or biodiesel, see this website from the American lung Association of MN:
Oh Bob!
Using ethanol is pointless until it is unpegged from the price of gas. Ethanol gets 15-20% fewer mpg than regular gas, so consequently it is always priced 15-20% less. If gas was $2.69 and ethanol was $1.50, it would make sense. And it would be priced around that if we dropped the huge tariff on Brazilian imported ethanol and stopped subsidizing refiners for every gallon they make. Until then, it’s nothing but a false hope that some (Bush) are touting as the ‘future.’ The future of Exxon and BP, maybe. But truly it doesn’t have much practical application in larger society as the technology exists today. In fact, we have more refinery capacity for corn-based ethanol than we can even grow corn in this state. Hello–this isn’t a solution! It’s not even an improvement. And so long as manufacturers keep building engines that are gas AND ethanol compatible, we’re unlikely to see real investment in an ethanol-only engine that might get better economy.
The price of gas has always been artificially lowered in the United States by massive public subsidies. (This means that you are paying the real cost for gas out of your paycheck rather than out of your pocket at the pump, leaving non-consumers of gasoline like me to subsidize your way.) If subsidies to the oil industry were removed we’d see prices at the pump closer to $4-$5 gallon today with zero increase in the gas tax. Let’s drop the subsidy AND raise the gas tax. Policy setting a $4/gallon MINIMUM at the pump would be close to the best thing that could happen to this country and it couldn’t happen soon enough.
The increased demand for corn-based ethanol is starting to cause our meat & dairy prices to increase. Some solution. Let’s say we dedicated all 70 million acres of corn production to ethanol, it would only net us 2-3% new energy. You’d save more by keeping your car tuned up & proper amount of air in the tires.
Making every thing we buy that’s transported by truck cost more sure sounds like a good idea to me. Making it so only rich people can drive sure sounds like a good idea to me…
DizzyInCircles, I remember Fleet Farm does that type of thing, too! they have one person manning the register for cash/check payments… but other than that, it’s just pumps. Still not as ‘minimal’ as this station, though… 
Yup, those are great ideas Monte. The private automobile should be relegated to it’s intended purpose: a rarely used toy for the rich. For the rest of us, most of our trips can be satisfied by foot, bicycle or electric powered fixed rail transit (given proper upfront investments in long neglected infrastructure of course.) As for freight, let’s shift it to electric powered rail as well. But, you don’t have to take my word for it, try Alan Drake:
Monte, think of it the other way around:
- Eating locally-grown food IS a very good idea.
- Investing in public transportation so that it is useful for EVERYONE is a very good idea.
We really need to kick our car habit. We need to think much more creatively that we have in the past in this state.
Yup, those are great ideas Monte. The private automobile should be relegated to its intended purpose: a rarely used toy for the rich.
For the rest of us, most of our trips can be satisfied by foot, bicycle or electric powered fixed rail transit. (Given proper upfront investments in long neglected infrastructure, of course.)
As for freight, let’s shift it to electric powered rail as well. But, you don’t have to take my word for it, try Alan Drake:
Eaton (along with UMn collaborators) has been working on a hydraulic hybrid engine. It has been installed in a UPS truck but is currently too large to fit in a standard sedan.
http://pressroom.ups.com/pressreleases/current/0,1088,4694,00.html
Addressing the first comment:
Yes, gas prices usually do fall around election time, but not because of any vast political conspiracies.
Gas prices always trend upwards during the summer months. People take more vacations and hence drive more, adding to the demand. Furthermore, many states mandate cleaner summer blends for gas, particularly with the phasing out of MBTE as a gas additive. These blends often require some ethanol, and often vary by state, thus need to be refined separately and add to refining costs.
By the time November rolls around, those kinds of issues have come and gone, and gas prices take a nice little as the candidates come down the home stretch towards election day.
Here is my personal favorite mass transit idea. Saves on the environment and yet caters to the individual.
PRT is actually on my list of upcoming Roadguy posts, so if y’all could hold off on that one for a bit…
PRT posts upcoming? That should be very entertaining. Plenty of opportunities for a good laugh will be had by all. I can’t wait!
Omigod it’s like the movie Minority Report! I had no idea these things existed! Oops, sorry Roadguy… I’m getting ahead… I ‘shant say another word!
While you’re waiting for Roadguy’s post… some healthy skepticism.
Recent news about Rep. Mark Olson, PRT’s biggest promoter in Minnesota at the Dump Mark Olson Blog.
I see my sarcasm has been thrown back at me, but oh well, I guess we’ll remain in disagreement. I drive my SUV to work alone every day, filling it with cheap gas and living in a single family house out in the suburbs. I like living like this, my version of the American dream. Looking around me it seems a lot of other people do too. If I wanted to live in a cramped flat and take my bicycle to work with a government that tells people what is good for them I’d go live in Europe.
Monte,
Live & drive where you want, it doesn’t bother me. It’s just that I’m sick & tired of hearing the whining of people who either commute 30 miles each way and/or drive something that gets 15 MPG. Please tell me that some of these people did factor in that gasoline is a commodity and is subject to price swings.
One thing that keeping a properly tuned engine can’t do: equal the amount of pollutants an E85 engine burns out of the tailpipe - at the expense of less mpg.
MPG was a major factor in the purchase of our newest vehicle. With a 14-month old, and another one on the way, we wanted space, but not sacrafice fuel economy: we settled on a Passat Wagon and got close to 30mpg combined driving.
That said, I’m still a big proponent of bike riding to work. I’ll usually ride to work 3 days a week via the old pedal method. Love the exercise!
