Vacancy

Here in Colorado gas prices were at $3.00/gallon yesterday (haven't got out to check them yet today). Last night I had to go over to the big city to the east of me to run some errands and it was around 9:00pm before I started heading up the road to my little foothills town that depends heavily on the summer tourist trade. Something didn't feel right to me as I drove back up the main drag toward home, and I finally realized that it was the lack of traffic on the street and the all the vacancy signs on every motel and inn that I passed. Wait! This is labor day weekend! Normally, I would be negotiating packed roads and cussing out idiots from Kansas. The quiet was almost eerie.

Wonder how long its gonna take for the gas prices to go down in the wake of the destruction around NO. Wonder if they WILL come down! Wonder what's going to happen to the economy if this gas price thing is prolonged. Thoughts?

[Brett's Honey]

I noticed the same in my area. Usually on Labor Day week-end there are tons of cars and trucks pulling boats and campers loaded with people going to the lake, which is 10 miles down the road from my house. There's always people in the conveinence stores here, outside of town where I live, coming in from campsites. I didn't notice any the last two days!

[Brett's Honey]

And...OUR gas is only $2.89!

[Cyclefrance]

Originally Posted by marichiko

Wonder what's going to happen to the economy if this gas price thing is prolonged. Thoughts?

If it is prolongued to the extent that there is no marked decrease in prices then you can expect a number of things:

1. There will be a distinct increase in usage and purchase of smaller vehicles that give substantially better mpg - 40-45 mp is not unreasonable. In the UK where prices are already over $6/gallon equivalent, we can live with it to a degree because we have vehicles that give that sort of fuel economy. I have a 15 year-old VW Passat estate with 180,000 miles - that's not a typo - on the clock that returns 35 mpg easily and can do better. Even the larger engined car I drive (3 litre job) gives me 30 mpg without too much effort.

2. If it is sustained then your home car industry will start building and selling cars like those used in Europe and other parts of the world - they won't want to lose market share - with most of them already producuing the Eiropean cars but overseas, it may be just a case of switching the production lines for such vehicles to the States as the most cost-effective first level solution.

3. When prices do fall (a large drop in consumption caused by even just 1 above, let alone 1 & 2 will cause this to happen) then bet you the government will find this a good reason to levy higher taxes on fuel.

4. Alternative fuels will be given consideration, but with prices this high, a lot of these come inside the horizon, which means that the chances of really moving on any one in a big way may be limited and you'll end up with two or three being pursued less dynamically.

In the short-term, people will hold back on driving and use alternative forms of transport where possible and/or only make shorter journeys using the car so that there is less of a drain on their pockets. The cost of fuel will feed through all aspects of the economy as goods and services have to be moved either physically or because they burn other energy like electricity. All prices will rise and the spending power of the individual will decrease putting businesses at risk - disposable income just gets hit big time. There is then a real risk of major recession and unemployment. Against this doomsday scenario, the oil-producing economies won't want to lose revenues as a result of a too-high oil price killing global growth so there will be a period of adjustment and balancing that will soften the effect, but it will still be a bumpy ride.

[Elspode]

The wife's boss is selling us a 1993 Mercury Tracer wagon. 1.9L automatic, PS, PB, air, dead stereo, interior lights blowing the fuse, but it should get much better mileage for us, and it doesn't look bad at all. Engine is damn clean. I just had a synthetic oil change done this morning, and gave it good once over. Brakes were just redone before we bought it, and it looks to have been maintained very well.

Stats on our vehicles for gas mileage, according to the US Government:

1991 Ford Taurus - 23 mpg avg user combined city/hwy mpg
1999 Ford Explorer - 16.5 avg user combined city/hwy mpg (mine is actually getting about 15mpg in the real world)
1993 Mercury Tracer - 28 avg user combine city/hwy mpg

Pretty good step up, all in all. We've been pretty lucky in the past year, having gotten a free Taurus with only 35k on it, and now the Tracer with only 70k.

Gotta find two stereos, now, because the one from the Taurus was stolen, and the one in the Tracer is dead.

[russotto]

You misunderestimate the stubbornness of Americans -- both the people and the governments. Smaller vehicles? Probably, but that's compared to Suburbans, Navigators, and Explorers. But the nasty high-mileage diesels Europeans like? Not likely, particularly since diesel prices shoot through the roof in winter. The SMART and similar cars? There the stubbornness of the government comes into effect.

As for alternative fuels, I've been hearing about most of the since the 70's, and nothing has come of them. I won't believe in them until they are benchmarks on the commodities exchanges.

[Trilby]

Gas here is 3.09.

[slang]

Motorcycles are out in high numbers in the suburbs this weekend. It's surely not the high gas prices that are causing this here but it certainly doesnt hurt.

High fuel prices got you down? Take a ride on your favorite bike for a carefree cruise around Cinncy on Labor day weekend.

[Griff]

When I see bikes running between the snowbanks this winter...

[Cyclefrance]

Originally Posted by russotto

But the nasty high-mileage diesels Europeans like? Not likely, particularly since diesel prices shoot through the roof in winter.

Times are a changing - common rail diesels give performance, economy and lower emissions. I ran a gulf TDi for four years - drove like a petrol/gasoline-engined car but returned between 50 and 60 mpg average depending upon driving conditions. Don't see greatly fluctuating diesel prices over here - guess yours are geared to light heating oil (gasoil - same product as diesel). Incidently the old faithful Passat mentioned before runs gasoline.

As for alternative fuels, I've been hearing about most of the since the 70's, and nothing has come of them. I won't believe in them until they are benchmarks on the commodities exchanges.

Think you will wait a long time for these to be quoted as benchmarks - most crude/ petroleum hedges are OTC trades with only a few grades like WTI and Brent on crude and NYMEX Gasoil (European barge market), and SIMEX Heavy Fuel Oil (Singapore bunker market) on products having the volume and liquidity to warrant exchange-based trading

[russotto]

The better diesel is another thing I've been hearing about all my life. Not a chance, they still spew soot. And yes, diesel competes with home heating oil here; it also does not receive favorable tax treatment as a motor fuel.

[xoxoxoBruce]

They are coming for the big rigs. The oil companies have been given a short time to get the sulfer content down so they can add the equipment to stop the soot.They'll be a lot cleaner in a couple years but it'll take a while to replace the ones now in service.