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An Oil Price Guarantee

Editorial for June 3, 2004

The price of gasoline continues to rise, and there is no good reason to think it's ever going to decline significantly. There may be temporary drops, but the overall trend is obvious -- and probably irreversible.

The American Automobile Association released its latest figures last week, showing the average cost per one gallon of regular unleaded gasoline in our region of the Pacific Northwest. The changes have been dramatic in just the last year.

For example, in nearby Yakima, the price for a gallon is currently averaging $2.23. In May 2003, the cost was $1.59. In Vancouver, meanwhile, the current figure is $2.27. A year ago in May, it was $1.56.

Those are pretty sharp price hikes.

Oil is a finite resource, and the resource is getting scarcer by the month. In that regard, it's only natural that the price is going to continue to climb. The problem is, the entire planet -- and the United States in particular -- has treated the resource as if there were an endless supply. But with more people, more cars, and political and industry leaders who often do not have the wisdom or courage to lead us on a new course, we continue to be steered toward an overdependence on oil.

Consider this: American cars and trucks currently consume roughly 8 million barrels of oil per day, and our nation now imports 25 percent of that oil from the notoriously unstable Middle East region. Statistics show that if American vehicles could improve their mileage by an average of just 7.6 miles per gallon, we would eliminate the need to import oil from the Persian Gulf.

Yet instead of taking this type of approach, the cheap political answer is to temporarily secure more supply by drilling for oil in new areas. But that only extends the date when real alternatives need to be ready, and politicians who offer you that approach as a solution are really selling snake oil.

There are real solutions available, however. The innovative hybrid cars, for instance, get an average of as much as 50-60 miles per gallon -- a huge improvement over what most American cars now deliver.

Or, if we were to go "back to the future," we could achieve better fuel efficiency simply by using smaller, lighter cars.

Cleary, if our political and business leaders were serious about freeing us from our addiction to Middle Eastern oil, going to smaller cars or hybrid cars would be two relatively easy ways to do so. Instead, the industry's advertising armies have pushed American consumers in the exact opposite direction: Toward tank-like SUVs that get an average of 12-20 miles per gallon.

What does that tell us about their sincerity?

The managers of the world's oil cartels no doubt keep an eye on the habits of Americans. If there begins to be a real backlash against the increasing price of fuel -- if people stop buying SUVs, or if industry leaders begin to seriously consider mass-producing vehicles that are dramatically more efficient than what is now standard in the marketplace -- expect the oil exporters to suddenly (and temporarily) reduce the price of a barrel of oil.

And here's a guarantee: They will then keep the prices low just long enough to lull us all back to sleep.

JB

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