GAS PRICES IN CHICAGO! As They Fall, Will Wasteful Behavior Return? Or, Are Things "Different" Now?
INTEREST IN FUEL-EFFICIENT TOYOTA PRIUS DECLINES WITH RECENT GAS PRICE MODERATION!
Here in Chicago, the average price for a gallon of regular gas has fallen 28 cents since its record high of $4.35/gallon set on July 16th, according to data available on the ChicagoGasPrices.com website. Today, the price of a barrel of oil in New York dropped 59 cents, to $118.58, after news of higher-than-expected U.S. stockpiles of crude. In early July, that same barrel of oil cost nearly $147!
Near our Dean's Team Chicago office, in the Lincoln Square Neighborhood on the North Side of Chicago, the Shell Station at Western Avenue and Irving Park Road sells gas for $4.19/gallon, versus $4.39 just over three weeks ago.
Is there any change in the average driver's desire to conserve, to go green, to save money, to economize on fuel consumption?
No scientific data yet, but on Cars.com, a website selling and advertising new and used vehicles, clicks on one of the most fuel-efficient cars available, the Toyota Prius, dropped more than 50% last week, since peaking last May, as gas prices were rising quickly.
"There is a direct correlation between what people are searching for and gas prices," said Steve Nolan, a Cars.com Spokesman. "Whenever we see gas prices spike, we see an uptick in people searching for fuel-efficient vehicles. And whenever we see gas prices fall back, we see those searches start to erode."
Wes Bolsen, of Coskata, an ethanol refining company in the Chicago Suburb of Warrenville IL, offers this opinion: "In the past what we've seen is oil shocks based on political reasons. Now, it's a supply-and-demand issue. With China and India in the market, no one is talking about $40-a-barrel oil."
Will that hold true this time? Has the spike in the price of a gallon of gas, combined with a sluggish economy and housing market, here in Chicago and across the country, cause long-term change in drivers' fuel consumption behavior?
Remember the good-old days? For me, it was the first tank of gas that I paid for, back in February, 1973 - 12 gallons of regular (leaded, back then!), @ $0.35/gallon, or $4.20 FOR THE FILL-UP - about the cost of ONE GALLON OF REGULAR UNLEADED TODAY!
Fast forward ten years - to 1983 - and the same 12 gallons of gas (unleaded, universally, by this time) - about $1.25/gallon, or $15.00 for the tank fill. In 1993 - about $1.50/gallon, and only slightly more for the tank than in the early 1980's. Roughly $1.85/gallon in Chicago five years ago, in 2003.
Over the years, however, until the big price climb of 2008 - drivers had short memories, and quickly returned to their gas guzzling vehicles as prices moderated, and left thoughts of fuel-efficient cars, and alternative fuel vehicles, behind. President Jimmy Carter's Synthetic Fuel Corporation initiative died during the fuel-glut days of the 1980's, as oil prices plunged.
When gas was cheap, it was not cost effective to produce alternative forms of energy - no one was interested, and development costs were too high. So, innovation waned.
Things might be different today, some contend. As demand from emerging countries continues to grow, and the likelihood of price relief from Persian Gulf and South American Oil Producers low, most experts agree a return to cheap oil is very unlikely.
According to Costaka, oil would have to remain above $45/barrel to make production of ethanol profitable. Siemens, a German-Based company developing alternative energy technologies, opened a company which manufactures mechanical drives for wind turbines in the Chicago Suburb of Elgin IL, contends profitability would be challenged if oil falls much lower than $70/barrel.
The investments in alternative energy are one of the positive consequences of rising crude oil prices, yet the transition away from petroleum strictly through the markets can make for a bumpy ride, said Tyson Slocum, an Energy Analyst for Public Citizen, a consumer advocacy organization. Government assistance should ease the path, he contends.
"We absolutely cannot rely on high prices alone to change our energy infrastructure," Slocum said. "You cannot just ask people to turn on a dime."
Old habits die hard, I guess. But have the bad, wasteful habits been finally laid to rest? We'll have to wait and see!
Read Joshua Boak's story in the July 31st Edition of The Chicago Tribune for more detail.
DEAN MOSS & DEAN'S TEAM CHICAGO
