What is the Deal with Gasoline Prices?

By Jan A. Larson

A USA Today story [1] last week warned that drivers may face higher gasoline prices and, possibly gasoline shortages in some areas of the country as we approach the summer driving season.

I'm sure there will the familiar hue and cry when folks find out that it is going to cost a few bucks more to drive down to the Quick Mart for a fill-up and a bottle of water.

Everyone complains about rising gasoline prices, but considering that the price of gas would have to go to $2.89 per gallon to simply equal the inflation-adjusted price of 1981 and that the bottle of water probably costs more per gallon, there really should be nothing to complain about. At least not yet.

Considering that over 20 years have passed since that 1981 energy crisis, one might think that steps would have been taken to reduce or eliminate the nation's dependence on foreign oil, or better yet, on oil altogether. One might think, but one would be wrong. Americans will use an estimated 10 million barrels of oil per day this summer and there is seemingly no satiating Americans' appetite for petroleum.

In the last decade or so, there has been a trend away from fuel- efficient vehicles toward larger, "safer" and, obviously, hungrier SUVs and large trucks. The reason, of course, is that few have been concerned about the cost of fuel. With gasoline prices remaining relatively flat, less than $1.25 per gallon in most areas over this period, the true cost of fuel is approximately half of that 20 years ago.

It is for the simple reason that petroleum has been cheap for two decades that there hasn't been a sense of urgency to either (1) reduce our dependency on foreign oil, or (2) develop alternative fuels. There has been some work on the development of hydrogen-powered and electric automobiles, but they have never been adopted into the American mainstream, partially due to technological but mostly due to economic reasons.

We, as a nation, will only face up to solving the problems of dependence on foreign oil and/or developing alternative fuels when the crude hits the fan. I don't know at what price level that will occur, but I suspect that most people won't really feel the pain until $3.00-4.00 per gallon. Maybe we'll get "lucky" and will feel the pain this year.

When that pain strikes, it will certainly take more than a couple of aspirin to bring relief. One way to address this problem would be for Congress to quit kowtowing to extremist environmental hysteria and authorize drilling in the Alaska National Wildlife Refuge (ANWR).

There has been a lot of misinformation and propaganda disseminated in recent years regarding ANWR. Some claim that the environmental risk is too great, but yet similar fears have not been realized with the Alaska pipeline constructed some 30 years ago. Others claim that drilling will damage the pristine environment, yet just 2000 acres of the 19.6 million acres of ANWR would be affected. That is equivalent to one six-inch square tile in a 2400 square foot house. More information on ANWR may be found on the ANWR website [2].

Drilling in ANWR is not the final solution to America's energy problems, but the estimated 10-16 billion barrels of oil would go a long way toward buying time until long-term solutions can be developed. It will be anywhere from 7 to 10 years or longer after ANWR is opened before the first oil reaches consumers.

The longer the decision to drill in ANWR is delayed, the more American will suffer at the gas pump. Maybe those proud owners of Hummer H2s won't mind spending $75 or $100 or more filling up the tank every couple of days, but most Americans are not going to be happy to pay more and more for foreign oil, especially when they realize there is a large reserve of American oil available, but for unfounded fears of disturbing a caribou or two, it remains underground.

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Jan A. Larson publishes a weekly commentary, "What is the

Deal?" at the Pie of Knowledge

time to time on OpinionEditorials