Higher Gas Prices Reason and Solution - Essay Example

Higher Gas Prices Reason and Solution The high and fluctuating prices of gas are causing a lot of economic hardship for many people globally, especially people in oil-importing countries. Not only do the people suffer, but also businesses and the economies of their countries and this points to the criticality of the potential solutions to this problem. It should be noted that the fluctuation and increases in gas prices are not accidental. The major factors behind these increases are political factors and economic factors. Political factors include the decisions of Organization of the Petroleum Exporting Countries (OPEC) to intentionally reduce the supply of crude. Other factors that have been identified as being responsible for the increase in gas prices include costs incurred in production and marketing, taxes and political uncertainty. The harsh economic impacts presented by this scenario calls for the formulation of the most appropriate solutions. Gasoline is the main component of crude oil, comprising 55% of the finished product, and thus these solutions should aim at addressing the prices of crude oil. So far, there are many suggestions that have been forwarded as potential gateways out of the problem of high gas prices. However, most of these still point towards the dependency on crude oil and do not adequately address the complex interplay between political and economic factors in determining/influencing the prices of crude oil. Given complex interplay between political and economic factors in determining/influencing the prices of crude oil, the best solution high gas prices is to increase the standards of fuel economy. Suggestions on possible solutions to high gas prices Some of the strategies that others have suggested on how to deal with high gas prices include a shift from cheap fuel into clean renewable energy and producing and developing more America energy. Most recently, the US president Barrack Obama outlined a three pronged strategy that will help to keep the costs of fuel, and consequently gas, down. The three actions that make up this strategy are, investigating the manipulation of markets, eliminating oil industry subsidies and enhancing "responsible" domestic drilling (Gardener 1). The best solution to high gas prices A real solution to the issue of high prices of gas is one that addresses both economic and political uncertainties. It should also be a long-term intervention. Basically, increasing the standards of fuel economy is increasing the ability to use less fuel to perform similar tasks through the adoption of fuel saving technologies. The Union of Concerned Scientists (1) explains that although the current gasoline prices are not as bad as those experienced during the late 1980s, the current prices are placing a great drain on the national and global economy, a drain that can be avoided if people had trucks and cars that have better fuel economy. The above explanation points to the development and utilisation of vehicles that use less amounts of fuel. The Union of Concerned Scientists (1) state that without relying on hybrids, technologies developed by automakers have the potential of enhancing the fuel economy of the average truck and car to 40 mpg over the next 10 years. In order to achieve this, automakers should re-examine the existing technology and work on it again. As early as 2003, Friedman (56) stated that the increased fuel economy that will arise from fuel saving technologies will bring the prices of fuel down to only $1.40 for each gallon and thus save consumers over $40 billion each year by 2015. This figure will rise to $70 billion when all trucks and cars have been replaced. This will be incredible because over the last 12 months alone, consumers have spend over $180 billion on gasoline. At the current gas prices, technologies of fuel technology pay for themselves within a period of about 18 months. According to the National Resource Defence Council (2009), the use of fuel-efficient motor oil, tire inflation and tires of low rolling resistance on light trucks and on-road fleet can contribute up to 4% in increasing fuel economy. The fuel economy standards that were spelled out by the Energy Independence and Security Act (EISA) 2007 should be implemented for all new and on-road heavy trucks. According to this council, this strategy will increase fuel economy of heavy and medium trucks by at least 40% by 2030. Plug-in hybrid electric vehicles should also be incorporated in fuel economy strategy. This should be promoted because it will ensure that by 2030, 8% of the total mileage covered by vehicles is covered by electricity. Fuel efficiency will also be achieved through building efficiency for example retrofit oil-heated commercial buildings and homes will reduce fuel consumption by 50 percent. Some of the US citizens are already showing their support for strategies that reduces the national fuel consumption. According to Jacobe (1), middle-income citizens are talking about getting cars with improved gas mileage whereas lower-income citizens are talking about increasing the utilisation of mass transit. Although few people may buy electric cars, their benefits can be achieved within the few years or the next decade. Argument against drilling of own oil Recently, there have been many proposals suggesting the drilling of more oil as a response to high gas prices. The areas targeted are protected regions of the Outer Continental Shelf (OCS) and the Arctic National Wildlife Refuge. As noted in the above discussion, gas prices are controlled by complex mix of economic and political factors. This means if US is to drill its own oil, it might end up being a short term solution. Any political issue arising in the nation or anything warranting a stoppage of its oil drilling will plunge the citizens back to the current situation. Although such circumstances are not anticipated, neither should they be assumed. At the same time, the US oil deposits are not infinite. This means that this strategy is not a solution that will insulate the Americans from such situations for many generations to come. It should be noted that American oil reserves account for only 25 of the global reserves yet the nation accounts for 25% of the total global consumption. The US consumes approximately 21 million barrels of oil daily. These indicate that additional drilling will not reduce the prices of gas significantly or enhance energy security. The National Resource Defence Council (2009) states that even if America was to start drilling its oil reserves in the OCS protected areas and the arctic refuge, reliance on these reserves alone will not last the nation until 2018. Human population is also increasing at a far higher rate than the renewal of crude oil. This means that the nation should also invest in technologies that go hand-in hand with or at least tolerate this slow rate of renewal of oil as its lasting solution to high gas prices. Conclusion The US has always been reluctant to produce its oil and opt for importation of oil because of environmental reasons. Neither should the current situation of high gas prices force the nation to violate this. Instead, the government and the citizens should consider shifting to the use of energy saving technologies so as to achieve improved fuel economy. This ranges from redesigning and improving the technologies used in the current on-road and new trucks and cars as well as aiming at fuel use reduction through building technologies. This strategy is the best since it not only aims at achieving a sustainable use of the global and US oil reserves for the current generations. It also takes care of the future generations. Neither is the strategy likely to be affected by any unfavourable economic and political conditions. In addition, the strategy addresses the protection of the environment from harmful effects arising from the current and the expected level of biofuel utilisation. Works Cited Friedman David. (2003). Savings from 40 mpg by 2014: Building a Better SUV: A Blueprint for Saving Lives, Money, and Gasoline. Union of Concerned Scientists. Gardener Susan (2011). “Obama Discusses Solutions to Rising Gas Prices in Weekly Address.” Daily Kos. Online: http://www.dailykos.com/story/2011/05/14/975861/-Obama-discusses-solutions-to-rising-gas-prices-in-weekly-address. Retrieved on 14th November, 2011. Jacobe Dennis. (2011). “Clean Energy: The Solution to Volatile Gas Prices.” GALLUP Management Journal. http://gmj.gallup.com/content/148013/solution-high-gas-prices.aspx#2 The National Resource Defence Council (2009). “Clean Energy: The Solution to Volatile Gas Prices.” www.nrdc.org/energy/gaspricesolutions.pdf. Retrieved on 14th November, 2011. The Union of Concerned Scientists. (2010). “Clean Energy: The Solution to Volatile Gas Prices.” Online: http://www.ucsusa.org/clean_vehicles/technologies_and_fuels/gasoline_and_diesel/21st-century-solutions-to.html. Retrieved on 14th November, 2011. Read More