Still Climbing..

As I drove to work this morning I realized that in just the last couple days.. gas has gone up almost another 20 cents a gallon. Right now in my area that puts it at 3.79/gal for regular unleaded with premium sitting just over 4 bucks a gallon. Everything I am reading says this will only continue and that there is no end in sight to the rising oil prices. Toss in the fact that gas always climbs some during the summer months as people do their vacation driving during this time period and we are in for an expensive summer.

My biggest pet peeve with all this is that people are getting very very rich off the whole thing. Check out this little news blurb on the great year Exxon had last year:

Thanks to surging oil prices, the company beat its own record for the highest profit ever recorded by a U.S. company, with net income rising 3 percent to $40.6 billion last year. The company's sales - over $404 billion - exceeded the gross domestic product of all but the 24 richest countries in the world.

40.6 BILLION in profit. Not sales.. but PROFIT. For one year. This beat its previous couple years which were also absurd. If you add the top 5 oil companies the number is even more retarded. It is around 123 Billion in profit last year. I have a very hard time stomaching four bucks a gallon when companies are making that much money. OPEC is controlling the flow of oil and not increasing output despite the fact that the price per barrel has double over the last couple of years. But then, why would they? They produce the same amount of oil.. and make twice as much money.

Supply and demand. I guess I can only hope that the rising gas costs force a change in mentality in the consumer as the only way to send a message is to lower the demand for gas and oil. There are a number of options including hybrids, biodiesel, and just fuel efficient vehicles in general. I was reading today that recent studies have shown that for every 10 miles an hour faster you go, you lower fuel efficiency by 3-4 MPG. Obviously there is a maximum efficiency you can get based on your engine regardless of speed, but they are talking about the effects of wind resistance at highway speeds mainly. This is of interest to me due to the fact that 95% of my driving is highway. Essentially if I drive 65 instead of my usual 74, I should save about 3 MPG. Over the course of a week that would average out to about 1.7 gallons in fuel savings. Which at todays prices saves me about $6.50 a week which equates to about fifty cents a gallon in fuel savings.

I am going to try this for the next few weeks and let you know what I find out. My only hope is that the absurd increase in gas prices forces people to start making smarter decisions. I will be the first to admit I love a big vehicle. I loved my Dodge Ram with the 5.8L V8 in it. I love the idea of owning a big SUV. But nowadays, I am very glad to be driving what I am and getting 23MPG (hopefully 26 this week!) instead of the 11MPG I got in my truck.

What amazes me is that companies like Exxon are not using these incredible profits to find the alternatives. I know there is still oil left, but wouldn't it make more sense that while you have the big profits and cash flow, to future protect yourself. I know oil has been great to you, but imagine if you could be the first to the market with a serious lower cost alternative? I'm not business major, but if my main source of income was a product with a high demand and a finite amount available, I would certainly be looking ahead to the future and what my options are going to be when it runs out.

I know a lot of people are up in arms about how the government is still putting oil away in the strategic oil reserves despite the cost of gas. I would argue that this is a good thing. No matter how you slice it, we are a nation dependant on oil. If I went to the pump tomorrow and they said that I could only buy 10 gallons of gas, well then I would only be going to work two days this week. The strategic oil reserve when full will have somewhere around 750 million barrels of oil. While this may sound like a lot, at our current oil usage rates, this isn't even 3 months worth of coverage for oil imports. Right now its 0.3% of the daily oil supply that is being put into that reserve. You are talking about 11 cents a gallon if they stopped that all together, which would be nice, but it wouldn't stop prices from climbing and would just leave us more vulnerable to a sudden oil import issue.

I wasn't around when they were rationing gas, but I cannot imagine the impact it would have on this country. Take cars and getting to work out of the picture. Could you imagine the impact on the cost of goods? Everything has to be transported around the country. If fuel had to be rationed, how would that effect the flow of these goods? How about travel. What kind of effect would that have on airlines or just you ability to drive your own car somewhere out of state? It was not cheap for anyone to get to NY for my Grandmother's funeral, especially on short notice with the airlines, but it would have been near impossible had there been fuel shortages of some kind.

I'm no tree hugging hippy by any means, but I am concerned. More for the econmic well being of our country. Sure the environmental impact is a factor too, but I dislike being so reliant on foreign countries for a product that we are basically at their mercy. They use this leverage on a regular basis to bend us over a barrel. Cmon.. did you catch that? Bend us over a BARREL .. barrel of oil.. see what I did there? If you are not laughing.. I don't like you anymore.

So now that I had a quasi political/environmental/financial discussion, I leave you with a video. A friend of mine was talking about how he was sitting around with a group of friends and they were listening to old 80s music and how all his friends were singing along to songs he didn't really know, but that he could remember every word to the Sugar Hill Gang song. This weekend I was rewatching my favorite show of all time.. Scrubs.. and the episode with the Sugar Hill Gang alarm clock was one I watched. Here is the clip: