Bite the bullet on gas prices

This column originally appeared in the Williston Observer on June 19, 2008.

Bite the bullet on gas prices

Back in 1998, I stood at a gas station pumping gas at $1.11 per gallon and noticed that the station next door sold its gas for $1.01. I had a light bulb moment and created The GasMan website to track local gas prices.

Keeping such a thing up to date is a lot harder than it sounds, and five years later I closed the site down. The average price I was posting at the time of the site's demise was $1.65 per gallon. $1.11? $1.65? Those were the days.

Today, you can buy GPS units that provide directions to the closest, cheapest gas. Finding the cheapest gas in the area, though, might save you $70 or $80 per year. Is there anything that can be done to save $500 or $1000 per year?

There are many factors that affect the price of gasoline. The most basic, though, is increasing demand. In places like China and India, car ownership is skyrocketing. In the past few years, oil production has little changed, but demand continues to rise. Basic economics tells us that rinsing demand with no change in supply leads to rising prices.

The reality is that I will probably never see $1.65 gas ever again in my lifetime. When you're on a budget, that's a hard reality to face.

When reality raises its ugly head, politicians smell blood. Every politician wishes they could come up with a way to tax us back to $2 gas, or to force Saudi Arabia to open the floodgates and let the oil pour forth, or to drill holes in the Alaskan tundra or the continental shelf to extract our own oil. Something, anything, to reduce the price.

The problem is that some of these "solutions" will only work in the short or medium term, but help us not one whit in the long term.

There is almost nothing the current president, nor the next president, nor the Congress can do to manipulate gas prices.

One idea is to cut the federal gas tax -- a tax holiday. Cutting the federal tax of 18.4 cents per gallon, though, hardly seems worth it. Remember good old supply and demand? Increased demand for something in short supply means higher prices. That 18 cents will disappear in a week, and the deficit will do nothing but grow.

Some members of Congress want to impose windfall profits taxes on oil companies. This is an idea that I can support, but the new money should have a dedicated purpose having nothing to do with gas prices because such a tax will do nothing to lower the price of gas, and could make it go up.

Midwest farmers see the alternative fuels market as a great way to get paid more for their crops. They get more money when their corn is converted to ethanol than if it is sold as food. But if food costs rise as fuel prices go down, have we gained anything? And who's to say more ethanol means lower prices?

Increased domestic supply is also touted as a solution, extracting oil from shale or drilling at ANWR or off shore. But as environmental consciousness rises, more people don't see solutions in exploiting nature this way, they only see folly.

No, the real solutions are all long-term. We are going to have to bite the bullet.

The best solution is to decrease our need for oil. Higher CAFE standards, so that new cars get better mileage, are a start, but only just. What we really need is alternatively fueled vehicles.

We need bio-fuels, especially from non-food sources like switch grass, and they need to power hybrids that can eke out 100 or 200 miles per gallon. We need to develop hydrogen. We need better electric cars. Something. Anything!

What we need is an Apollo project for fuel. We need to invest time, money, and brain power in the problem. There is a solution out there, and I can guarantee you it has nothing to do with petroleum.

One day, there will be a need for the GasMan web site again, but instead of tracking the price of a gallon of gas, it will track the price of a liter of hydrogen or the cost to top off a quick-charge battery. The day cannot come soon enough.