Let’s Review…

As memory serves, prices for regular unleaded gasoline briefly hit a high of around $3.45 per gallon in the Twin Cities area in the aftermath of Hurricane Katrina, as price gougers suppliers panicked at the thought of limited oil imports.

When I left the house this morning, the l0cal gas station had reduced their price for 87 octane to a measly $3.00 per gallon.  Four hours later, we’re at $3.29.  So, we’re within spitting distance of the all-time record for gas prices, and the only issue affecting us right now (if you read the mainstream media) is the fact that our refineries are running at 100% capacity.

This begs a question:

If there’s plenty of oil left to produce, why in the hell aren’t the major oil companies hustling to get permits for either new refineries or expansion of existing ones?  

 These facilities take time to set up, and in the meantime, if we’re at 100% capacity right now, then drivers are going to be (to use a technical term) totally screwed this summer when we’re in the middle of our ‘driving season.’  The Department of Energy claims this is a short-term problem while refineries are being fixed, and that prices will sink back down below three bucks a gallon soon.  We’ll see… it’s only the middle of May and we already have our first named tropical storm of the year, so I’m guessing there will be other factors hitting gas prices soon enough.

As with anything else, only time will tell if this is a short-term blip in gas prices, or if we are entering a new gasoline market that is influenced more by supply than demand.    If it’s the latter case, I would start re-formulating your monthly budget now and plan for transportation (if you drive) costing a good 30% more to start.   Around here gasoline prices have jumped 40% from the lows at the middle of January, and demand for gasoline is still pretty inelastic.

I think it’s time I start petitioning my employer to install a locker room, showers and expanded bike racks…


2 Responses to Let’s Review…

  1. Jim says:

    I was on a ride with a friend this morning and while we were stopped drinking coffee, I watched as an employee of a Phillips station changed the price of regular unleaded from $2.99 to $3.29. Just like that, a 10% price increase. Granted, it’s a Friday and this weekend is the fishing opener, so there may be increased demand, but still.

    A lot of bike commuters do pretty well with no locker room, showers, or decent bike racks. Those amenities are nice, but they aren’t prerequisites.

    On a semi-related note, I’ve often wondered how our standards of acceptable grooming might change if more people start commuting by bike. In many office environments, the only currently permissible body odor is the aroma of deodorant or shampoo. After an easy pace commute, I probably smell a little bit sweaty, but it has never been horrible (to me) assuming I started off the morning with a good shower and some deodorant. The main thing is keeping your armpits clean, since those areas tend to have a lot of smelly bacteria. Some pre-moistened baby-wipes applied to smelly pits in the privacy of a toilet stall can make a huge difference.

  2. Rebecca says:

    Welcome to the downside of Hubbert’s Peak.

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