Save and Conserve

just sat through an interesting meet the press focused on rising gas prices and government energy policy. sam bodman defended the administration's every move even though major holes were poked by dick durbin and jim cramer. cramer especially hurt bodman on the subject of ethanol, wondering why the administration did not anticipate the bottlenecks that have appeared in the supply chain due to the new rules eliminating MBTE fuel additive. cramer feels that fifty cents of the price of a gallon is due to mismanaged policy implementation.

might be true and if it is, would anyone be surprised that the current administration has handled it ineptly? of course not. but their incompetence is not the real culprit behind more expensive gas prices.

daniel yergin was also on the panel and kept reminding everyone that this issue is not as simple as: "are the oil companies colluding to drive profits?" in fact, the price of oil (and therefore, of gas) is set on a global market by traders. so speculation might be part of the equation, but i doubt collusion is a major part of the problem. the biggest explanation for the rising price of gas would be the supply situation, which appears to be constrained and incapable of growing to meet a rising global demand.

that is the underlying reality of the world we live in. it's fascinating to watch a panel of smart people dance around that point and avoid talking about the best ways to take some of the pressure off of the supply side: conserving. not one of these panelists talked about driving less, moving closer to work or dropping the highway speed limits. amazing, really. instead of talking about simple obvious ways we can use less of the stuff, these smart people want to discuss collusion and mismanaged policies.

things are pretty messed up and, if this episode of meet the press is any indication, things are only going to get worse before they get better. interesting times ... yes. dystopia? probably.

Posted by tom c. at 11:41 AM | Permalink

Energy prices have been heading up fast for a good solid two years ... and now the cost of gas is heading up on a daily basis.

The markets are sending us a signal - a major warning shot across our collective bow. Global demand for a variety of fuel sources (primarily oil and natural gas) is running wild and capacity to meet that demand is stretching very thin. Throw in the weather related issues (like massive Cat5 hurricanes) and chess matches between nations sitting on top of fuel and nations far away from fuel ... and you have got a witch's brew of swirling problems.

Conservation is an easy way for you - the buyer at the end of an incredibly long and complex supply chain - to mitigate rising energy prices.

Actually, if peak oil is for real, conservation might be the only effective way to deal with rising costs of energy. Scary thought? I believe not... if you begin to think about the problem with an open mind and a dose of creativity, I think you'll see it can liberate you to some extent.

There are so many simple ways to start reducing your energy use. Really, Americans waste so much fuel. Our per capita use of gas is pretty outrageous.

If you live in a town, start walking more. A half mile walk to the store to pick up a gallon of milk is not a hassle! It's fun and it gets you outside for half an hour. How about driving slower? That's the biggest no-brainer around. You can easily get more for your gas money - cut 5 to 10 mph off your average speed.

Don't be afraid of the rising costs of energy, be flexible. The world is entering a new time, when cheap abundant fuel is ancient history. Your attitude and approach is key. Start thinking about reducing your energy footprint and stop pining for the good ole days ... cause they ain't coming back!

Posted by tom c. at 5:05 PM | Permalink

a co-worker recently decided to move into an apartment located near our office. this guy currently commutes about 35 miles each way to and from work. working remote is not an option.

70 miles a day * 5 days a week * 4.3 weeks in a month = 1,505 miles per month

that calculation doesn't even account for miles driven outside of his commute. let's be kind and assume he drives about 20,000 miles in 2006. let's assume he drives a car that gets 20 miles per gallon. so he's going to end up purchasing about 1,000 gallons of gasoline in a year. the average price for a gallon of gas in the us is about $2.65.

$2,650 per year on gas. if he's netting $40,000 from work, he's spending about 6.6% of his take home dollars on gas.

this type of math will start to happen on a regular basis at dinner tables around the country. just like my co-worker figured it out, americans will start to realize their living/working situation doesn't make economical sense. if you have a commute longer than 20 miles one way to your job, you need to start thinking about how the commute impacts your wallet. sit down and pull the numbers together and then take it a step further and ask yourself: can i afford to spend > 7% of my net income on gas?

one of the easiest ways you can cut your energy costs is by reducing your drive mileage. the easiest way to reduce your dirve mileage is by moving closer to where you work. my co-worker is ahead of the curve in making a change. he's obviously a thoughtful, intelligent guy who thinks about the future. he's a planner. that's a good thing. people who prepare are able to seize opportunity.

there's an energy crisis going on out there - it's obvious. in 2 or 3 years nobody will have a valid excuse for not being prepared. the escalation of prices is sending a major signal. are you ready to do something about it?

Posted by tom c. at 3:40 PM | Permalink