Passing (up) gas . . .

I learned to drive behind the wheel of a circa 1952 army jeep.  The gas tank was under the driver's seat.  The gas gauge did not work, but that was okay because all a driver had to do was reach down with his or her left hand, unscrew the six-inch wide cap, and stick the hand into the tank. One could do this while driving, unless one also had to signal for a turn.   If the fingers quickly got wet, it wasn't yet time to pump any more gasoline. I have  fond memories of driving up to the pumps at the  "Egg Barn," an ancestor of  present day convenience stores (yes, they did sell eggs there, at least at first, which was amazingly convenient). Gasoline was priced around thirty five cents a gallon.  That memory is growing fonder by the day.

The prospect of rapidly rising gasoline prices is particularly troubling to those who have a memory.  Around June, 2008, about the time the U. S. economy went into freefall, gasoline prices in the U. S. had climbed to about $4.12 per gallon.

In 1979 the world suffered an energy crisis as a result of the reduction of world oil output.  

The reduction of worldwide oil production in 1979 was the result of political revolution in Iran and the resulting disruption in oil production and transport from that oil rich country. The price of oil was driven to unprecedented heights more by fear and panic than reality. OPEC, the middle eastern oil cartel, upped their production to soften the supply problems.  As a result of the fear and panic the prices remained high, and OPEC, like other oil producers, got richer.

History is repeating itself.  Iran has cut the UK and France off from its oil due to international sanctions imposed on it as a result of Iran's apparent race to produce a nuclear bomb.  A decrease of that magnitude in the international flow of oil drives the price upward.  But just as significant is the potential that Israel will attack Iran, and will diminish Iran's capacity to produce and deliver oil.   While this has not happened, it is the fear of such a shortage that is driving the price of oil upwards on the futures markets, and consequently, in the actual markets.

Let me dispel a lie that you will probably hear within the next few days.  You will hear that the price of gasoline is being driven up because the United  States is not producing oil like it used to. You will hear that environmental policies have reduced production in the U. S.    That is simply not true.

The United States is producing more oil than it has since 2003, and 2011 was the first time in recent memory that oil imports were less than domestic oil production. 

No, the reason for the increase in gasoline prices is fear caused by the uncertainty of the future of Iran.  Especially if Israel continues to rattle its formidable sword.

There may not be much we can do about it.

That's not true.  There really is. There always has been.

We can quit using so much gasoline.  

But that would take a little action, a little sacrifice on all of our parts.  We are not used to that.  We won't even sacrifice when our country is at war, at least not lately.

But wouldn't it be a great time to start?  Tell the rest of the world that we have some national will that comes from the grassroots up instead of the top down?

I'm not an economist, so maybe I'm wrong.  If I am, tell me.  What if every driver in the United States cut his or her gasoline consumption by ten percent?  Or twenty percent?

The first thing that would happen is that the increase in gasoline prices wouldn't hurt us nearly as much because we are not buying as much.  That might be the only thing that would happen.  But if millions of Americans cut gasoline consumption by ten to twenty percent, things will change, I bet. At least I think that's what I remember from the curves in Econ 101.

Tell me why it won't work.  But don't take too long. We really need to get started. We'll need to get t-shirts and bumper stickers and a website.

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