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US Gasoline Prices Spur Telework
coondoggie writes "The price of gasoline may finally be changing the way many people commute and communicate. Anecdotal evidence says teleworkers are growing rapidly as a direct result of the cost of driving. The article links a survey indicating that in Q1 2007 the 19 largest US cable and telephone providers (representing about 94% of the market) acquired over 2.9 million net additional high-speed Internet subscribers, to a total of about 56.2 million. That can be attributed in part to more employees taking advantage of telework programs, experts say. Just this week the House Judiciary Committee's antitrust task force opened the first of a series of hearings on the oil industry. Its chairman noted that gasoline prices have soared well above $3 a gallon and asked, 'How did we get into this mess?'"
For those who don't study history or are too young to remember ( a union which is probably 90+% of slashdot ), parent is presumably referring to: http://en.wikipedia.org/wiki/1973_oil_crisis
That's ANWR, not "ANOIR".
The big problem this summer is refining capacity. We've already seen the spike in oil prices into the $60/bbl range caused by increased Chinese demand for oil, and that hasn't really budged a whole lot since last year. Oil inventories have been good since then. The reason prices are so high right now is because of gasoline supply concerns, i.e., post-refining, and while I'm in favor of expanding drilling operations into both the eastern Gulf of Mexico and ANWR to offset worldwide demand increases (and thereby obtain price relief from increases over the last couple of years), this year's gasoline increases have nothing to do with that.
There were already a number of scheduled refinery maintenance shutdowns, and then BP had a major refinery go down for "unscheduled maintenance". Personally, I'm a bit suspicious of any unscheduled refinery maintenance. One of Enron's tactics to manipulate the electricity market was to create artificial shortages by calling up power plants and asking them to shut down temporarily. Hopefully, that's what Congressional hearings will be looking into. If there are no shenanigans going on at that level, then really there's nothing punitive they can do about it. What you're seeing is simple supply and demand combined with smart moves by speculators who bought gasoline low and are now selling it high. In fact, I wouldn't be surprised if some gasoline retailers are buying a small portion of their supply at higher-than-retail just to keep their gas stations in stock.
Refiners are stuck with expanding current operations, which is generally limited to technology updates and expanding into whatever surrounding land they have available. Unfortunately, it's late enough in the game now that refiners are going to resist the urge to build new large-scale refining capacity even if they could get a license to, because ethanol is starting to gear up, and by the time the refiners could actually get a new plant built (including the years upon years of environmental impact studies), the demand for gasoline will already be dropping in favor of alternative fuels (probably increased ethanol-gasoline blends, but that's still less gasoline being needed).
In much the USA, many Americans refuse to use public transportation because they want to get to work in a half-hour rather than spending four hours hopping from bus to bus to train to bus. That is certainly the situation in the San Francisco Bay Area. I am not exaggerating those times, either; a few years ago, I had a contract in Pleasanton, about 35 minutes by car from my home in Sunnyvale. My car needed to be in the shop for a few days so I decided to take public transit. How bad could it be, right? Pretty damned bad, is the answer. (The bus stop at the start of that route is about a 10-minute walk from my house; there are none closer. And note the price, too, though a monthly transit pass would cut that way down for a regular user.)
Who I was sitting next to was not the issue; the issue was that it took so damned long to get to the office that, if I had to do that every day, I'd be doing literally nothing but riding the bus/train, working, and sleeping. That's why you mostly see poor people on the bus: people with enough money to buy and operate a car would rather spend several extra hours a day with their families.
One root cause, in this area at least, is idiotic zoning policy that makes it illegal for most people to live close to where they work. The cities around here are divided into residential areas with the occasional convenience store or restaurant, and industrial/commercial areas with no housing other than the occasional programmer sleeping under his desk after an all-nighter. As a result, there is very little of interest within walking distance from most people's homes. And since those same zoning laws generally prohibit buildings more than a couple floors high even in the commercial areas, everything is spread out so far and wide that it's utterly impossible to design good public transit systems like those of higher-density cities. (Well, you *could* design one, but it would cost so much to operate that people would find it cheaper to drive their own cars.)
I live in Los Angeles, the second biggest American city and I can tell you first hand that the public transport system here SUCKS! I HAD to buy a car.. Absolutely HAD to, even when I was a flat broke student living in a room the size of the car I bought. Yes it was a used old banger, but I was actually able to get around! To build a functioning public transport system you need money. I wouldn't mind taking twice the time to get to/from work everyday using public transport just so I dont have to drive, but the way the public transport system is. It would end up taking 3 times as much (An 1 hour and 30 minutes!) and that is just absurd.
If only our government would spend more of the money they take from us, and spend it back on us. Instead, what I see is them taking my money so they can go bomb some people. The worst part is? I have to live with the knowledge, that I, for my part, am working hard every day to help pay for those weapons.
Gas is too expensive at $3? HA! Lower the damn income tax rate, and tax the gas consumption. A responsible government would do this. Unfortunately, if there are heavier taxes brought on gas, our income tax wont fall to compensate, we'll just be paying for more missiles, and guns.
Just imagine. For a minute.. impossible as it may seem. If $6/gallon were levied as a gas tax in all counties with a population density over a certain threshold, to pay for a public transport system for that county. To make it faster, cleaner, safer and more convenient. I'd gladly pay $9 a gallon to gas my car up then.
- Tempestdata
Grade school as it may seem, this IS "supply and demand." Demand-pull inflation to be precise. Demand for petroleum products has increased (see SUVs and China...mostly China). Price has gone up so rapidly because the short term elasticity is so low. People need to get to work, and in the car they have now. In the short term, people won't respond to a $.05 change in gas prices. Prices have spiked because we hit the wall of refining capacity and the supply curve got steep. Prices needed to go up to push demand down.
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