Get Ready to Spend $6,000 a Year on Gas

[marmar]

from CSM, via AlterNet:



Get Ready to Spend $6,000 a Year on Gas

By Mark Clayton, Christian Science Monitor. Posted May 14, 2008.

With prices at $120 a barrel, Americans are feeling the pain.




Two years ago a leading economist published a study provocatively titled: "What would $120 oil mean for the global economy?" Answer: a global recession, if the price stayed there for a year.

Now the future has arrived, with the United States and other nations getting a double whammy from both the mortgage crisis and oil futures hovering at $120 per barrel. If oil prices stay stratospheric, the cost of fueling cars and planes could slash US economic growth up to 2.3 percent and global growth by 3.6 percent, says Robert Wescott, former chief economist of the president's council of economic advisers and author of the $120 oil report.

While many energy-security experts worry about a terrorist attack that suddenly crimps global oil supplies and hammers the US economy, Dr. Wescott and other experts say a terror attack is hardly the only, or even the worst, oil threat the nation now faces. "What we are seeing today is more of a slow-motion, rolling oil crisis rather than a sharp shock, yet ultimately we end up with the same sorts of impacts ," says Wescott, now president of Keybridge Research, a Washington economic-consulting firm.

Unlike the 1970s, when an oil embargo left Americans waiting in long lines at gasoline stations and paying higher prices, today's oil crisis has been stealthy. Its economic impact has been masked by consumers tapping credit cards and home equity to cover the rising cost of energy and some consumer goods.

"We're having a replay of the 1970s without the Arab oil embargo part, so it's been hard for many people to see," says Amy Myers Jaffe, an energy scholar at the Baker Institute at Rice University in Houston.

Even with US airlines cutting flights and SUV sales now tanking, the effects of expensive oil on the American family could be stark, Wescott's report says.

In 2003, with oil approaching $40 per barrel, the average US family spent about $1,900 (4.8 percent of its income) on natural gas, heating oil, and gasoline. But today at the $120 per barrel level, a family will spend about $6,000 a year or about 15 percent of total annual income, Wescott's report predicts.

Compared with the oil crises of the 1970s, the US paradoxically is in a bit better, yet also worse, position. The good news is the US economy is less energy intensive -- using only about half the energy it did in the 1980s to produce a dollar of economic growth. That should make it more resilient.

But the bad news is that imported oil has risen to about 12 million barrels a day, about 60 percent of the 21 million barrels the US consumes daily. That financial drain at $120 per barrel is jamming the brakes on the US economy and inflating the trade deficit, economists agree. "The question now isn't whether we're going into recession, it's whether there will be a soft landing ... or we have a hard landing," Ms. Jaffe says. ......(more)

The complete piece is at: http://www.alternet.org/story/85280/

[still_one]

1. Funny, I remember in 2000 when bush was in Detroit making fun of those "hybrid" cars

saying that Americans can drive whatever they want. Something to the effect that "it was their right"

[The_Casual_Observer]

2. No more "gas is cheaper in real dollars than it used to be"

It's the mid seventies all over again, thanks bush.

[frazzled]

3. Unless my math is wrong, that is 100 to 125 gallons per month for a family

... judging by $3.50 to $4.00 per gallon. That seems like a lot.

We use only about 20 to 30 gallons a month. Granted, my husband takes public transit to work and we drive a hybrid, and have only one car. I feel sorry for people who have to drive so much: that's a big chunk of income.

[Juche]

5. Its also heating oil and natural gas

Families who use heating oil in winter or natural gas to cook or heat their homes are included with the gasoline costs.

If you use electric heating and cooking your costs will be lower.

[angstlessk]

6. they are referring to TOTAL energy usage,natural gas, heating oil

etc. Not just gasoline.

[conflictgirl]

8. For people who don't have a lot of public transit options that sounds about right

I would say those figures are pretty average. Even 100 gallons a month per family - in a two-adult household that's 50 gallons each. Estimate a car gets 20 mpg (mine gets better, but a lot of them only get 20 mpg) - that works out to about 12K miles per year if my math is right, which based on all the figures I've read is pretty much the average. If two adults have jobs and live in a town with very limited public transit options and the jobs aren't near enough each other or on compatible enough schedules, sharing a car may be difficult to impossible (particularly if you have children to care for). And yes, people can cut unnecessary trips and such, but in much of the country public transit options are limited and cities are completely designed around the assumption that everyone has a car. A lot of cities are going to need to be redesigned to be walkable and livable for people with limited use of cars.

[Iwasthere]

4. Not me!

I drive a 2001 Ford Excursion with a 7.3 litre engine, loaded. I drive it for free! Runs on fat. I can drive from Portland Oregon to Miami. FUCK GAS! Easy to do too. You can pick up older mercedes cars for a couple grand and have them converted. the engine actually runs quieter than commercial diesel and HELPS the enviroment (when these oils burn they help plant life!)

[gristy]

7. headline should read - "$6,000 on natural gas, heating oil, and gasoline"

People have choices they can make and will have to make to reduce the number of miles they drive each year.
Similar for energy to heat one's home: Close off rooms in the house in the winter, plug up air leaks, share housing with a neighbor during the coldest months.

Yeah, reality sucks.

[kestrel91316]

9. Well, I drive VERY little anymore and only spend about $40-50 a month

on gas. Bus passes for the month are $60, so it's a toss-up. I think at $4 it might be worthwhile to go with the bus most of the time and only drive when I need to haul something or make a buy at Smart & Final.