Oil Industry Braces for Drop in Gas Demand

Oil Industry Braces for Drop in Gas Demand - WSJ.

Many oil companies believe due to higher efficiency cars as well as alternate fuels that gas demand in the US has peaked.

I hope so! Any way to make this happpen faster without a negative economic impact?

Gas usage up

Americans hit the road again as gas prices fall - Reuters

Up 2% from last year.

Lots of human interest, but not many facts. 2% was the only fact I really saw in there.

EPA Waiver Economic Impact

Will the EPA waiver for California have a negative economic impact? Some people think so and my thoughts are BS.

Why? Take SUV's for example. Hyrid SUV's already exist and don't cost that much more than a regular one, but with cheap gas why would anyone want to buy one? Hmm...

And I thought Detroit was already working on lots of hybrids and electric cars already?

References:
Obama directs EPA to reconsider Bush-era auto emission policy Los Angeles Times

Gas Tax - Win, Win, Win

Friedman: Win, Win, Win from the NY TImes.

Good article about why a Gas Tax would help in the long term for making the US energy independent. Short term the price of gas is a nice economic benefit, but the US needs to reduce it's importation of energy which will have benefits of lowering the trade deficit and making the world a better place.

Unfortunately, I don't see this happening.

Impact of Under $2 Gas

Some Guesses:

1. Less demand for hybrids as long as price is low.
   
2. If price is low enough for enough time, increased demand for SUV's
3. Increase in speed driven
4. Increase in miles driven
5. Reduction in alternate energy funding from private sources.
6. Decrease in expenses for consumers.
7. Political issues in countries that are not the friendliest to the US (USSR, Iran, etc).
8. Possible impact on Iraq that may impact the US.
9. Decrease in demand to drill offshore in the US.
10. Decrease in drilling for new oil in the US
    
11. Older fields may no longer be economical
12. Decrease in looking for new fields
13. Decrease in oil sands since no longer economical (break even I believe is $50, oil is around $40 right now).
14. Increased demand for oil.
15. Lowering of supply by Opec to increase price.
    

Gas - $1.69 last night at Costco

I am just amazed by the drop in Gas, basically 2/3rd's cheaper than just a few months ago when near $5.00. Good news is this is helping people's pocket books. Bad news is it's making that SUV cost less to operate, so people may not put a premium on a fuel efficient car, such as a Prius.

Minimum Gas Price

What would be the impact of setting a minimum price for gas economically?

Say set it at $4.50 as Thomas Friedman suggested to assure the development of alternative energy sources, increases in fuel efficient cars, and use the tax benefits to invest in alternate energy. The extra for alternate energy assumes there could be a difference, with a lower price of gas + variable tax = $4.50.

What's the incentive for the service station to shop around for lower gas, and the suppliers just set the wholesale price at $4.40, allow the gas station to make 10 cents. I would guess a percentage of the difference would need to be given to the station so they shop for the best price. The higher the difference, the higher their profit.

On the economic side, with the price of gas being more than halved that is helping households, my guess is a couple of hundred every month. I am surprised this has not had any positive effect yet, but I am sure it will in time. The only negative is more usage of gas due to lower prices.