Gas Prices Go Up With Consumption

A couple things seem ironic to me.

First of all, I think it is ironic how all of us Americans are whining about the price of gasoline.

Don't get me wrong, I'm guilty of this too. I am first in line at the gas price complaint department. But the irony isn't lost on me. The irony being that we pretty much brought this on ourselves.

The reason gas prices are going up is because the supply is tight. It's a classic case of supply and demand.

When supply is tight and demand is high, prices go up.

There are two reasons that supplies of anything get tight. One is that consumption is up. The other is that production is down.

In the case of the current rise in gas prices, both of those things are applicable.

The average price of a gallon of gas in the United States right now is $1.41 and analysts predict that could rise to as high as $1.70 by mid-summer.

Gas prices have been rising steadily since last March when the Organization of Petroleum Exporting Countries cut production by 7.5 percent, or about 2 million barrels a day.

They did that to tighten up supplies a bit because the price for a barrel of crude oil was only $16 - the lowest it had been in a dozen years.

And tighten supplies they did. On Monday the price of crude oil futures closed at $30.25 a barrel, going over $30 for the first time in about nine years, according to Associated Press.

Of course, industrialized nations - like the United States - are putting pressure on OPEC to boost production.

And the analysts say OPEC will boost production by 1.5 to 1.7 million barrels a day in the near future but that it won't be enough to derail the gas price increases into the summer travel season.

U.S. refineries normally gear up for summer by boosting production during the first three months of the year. But this year they couldn't because of short supplies of crude oil. Most refineries actually are scaling back production.

So what is our response as gasoline consumers? We use more than ever. Consumption is soaring.

Everybody is driving great big gas-guzzling SUVs and trucks. Automakers are stumbling over each other trying to make their SUV the biggest.

I used to drive small, 4-cylinder, economical vehicles. I had a little Dodge Colt. Then I had a Honda Prelude. Had a Suzuki Sidekick for a while. They all got great gas mileage - somewhere around 25 or 30 mpg.

But you know, I just felt small on the road in those vehicles.

I would pull up to a stoplight and look at the vehicle next to me. If it was one of those big SUVs, my level line of sight would be approximately the top of its tire.

I thought to myself that if one of these things ever ran into me, it would run over me. Especially in the Honda.

So I bought a four-door sedan-type car that only gets about 18 miles per gallon. I feel safer, but I hate having to fill it up.

Remember back in the mid- '70s when we had the big "energy crisis." Gas prices went up and the automakers were stumbling over each other trying to make economical cars.

Now the economy is great, we're all flush with cash, we buy big gas guzzlers and we complain about the price of gas.

I suppose the ultimate consumers that we are, we will continue to consume fuel at an alarming rate. But one thing is certain: if we used less gas, the price would come down.

*****

And a couple ironies in the Hilary Rodham Clinton campaign for a U.S. Senate seat in New York.

Democrats these days are making quite a deal out of George W. Bush not being prepared or qualified to be president.

I suppose I can see their point. After all, he was only the governor of Texas and he got Cs in college.

So if they, the Democrats, find George W. lacking, how can they embrace Hilary?

She grew up in Illinois, practiced law in Arkansas, never ran for office before, much less being elected, and she's only lived in New York a few weeks.

What qualifies her to be a U.S. Senator from New York? Being married to Bill?

And another thing. The other day during a campaign speech she was telling New Yorkers why she deserved to represent them.

She said she understood them and shares their concerns. I believe that.

One concern she noted was that the state sends $15 billion more to Washington than it gets back.

She said if she was elected she would work to see that turned around.

But isn't that a bit at odds with her political philosophy? Doesn't she advocate a robust government rife with programs - everything from health care to welfare to education?

Isn't that surplus money from New York - a fairly prosperous place - going to help people in more unfortunate circumstances in less prosperous states?

And if she wants it to come back to New York anyway, why bother sending it to Washington at all? Why not just leave it in New York in the first place?

If she's not careful, she may end up sounding like a conservative. But that might be part of the plan. Talking like a conservative is a good way for a liberal to get elected these days.