Meanwhile, Al Gore is blaming the cyclone that hit Burma on--yeah--"global warming". (Not "climate change"?)
Up in Maine my sister still has snow in her back yard.
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I don't remember when I said it, but I predicted this some time ago.
As prophesies go, it's not much. I mean, it's not like I predicted the winning Powerball numbers for this week. (Believe me. If I could do that, I wouldn't be here.) But I take some satisfaction in knowing that I have finally, somehow, managed to acquire enough wisdom to look at a current situation, and apply my knowledges of history and economics to make a sound prediction.
I have to scoff, though, at people who bought big gas-guzzling SUVs solely because they could and wanted to, without thinking about "cost of ownership". The article begins with a picture of some guy with a gigantic truck with a four-door cab.
It's shiny. And has big shiny rims on it. The bed has a bedliner in it, but it looks like it's been treated with "Armor All". Not exactly a "work truck", ie the kind of truck which construction guys need in order to do their jobs, and which usually look slightly "distressed".
It's one thing to buy a big expensive gas-guzzling truck that you need because you own a construction or contracting business. (Or because you're into cars or boats and need something that can pull a big trailer.) It's another thing to buy one because you can't stomach driving a minivan or station wagon, because they're so "bland" and "for old people" (or WTF-ever).
But the flipside of this is that if you want the big impressive truck you had better be prepared to pay the operating costs. A huge truck with a big engine consumes a lot of fuel, because they're somewhat less than aerodynamic and they weigh a lot. It may be "cool" but if you don't need the capability, why pay for it? Why spend money you don't have to? Just to be "cool"?
That's a bad investment, buddy.
Now that gasoline is costing a lot more, suddenly people are realizing that they own much more vehicle than they actually need. Witness the last line in the article, where a guy who owns an Acura SUV says he doesn't need that much space and that "it's ridiculous." All of a sudden, SUVs are "ridiculous", because the cost of being "cool" is skyrocketing--and because so many people are figuring this out, suddenly the used car market is saturating with SUVs, their prices dropping, and the resale prices of econoboxes are going up.
All of which, I may add, I predicted.
The real irony here is that I bought my Cherokee last summer, and it gets 18 MPG--and while I'm not rolling in dough, my situation is such that I can actually choose whether I want to drive it or not. I still have the '95 Escort sitting in the driveway, and it gets 33 MPG...but I don't have to drive it if I don't want to, because driving the Cherokee, it takes a bit more than two gallons for me to get to and from work--about $7 or $8 worth of gasoline, which isn't prohibitively expensive.
I'm driving an SUV which gets 18 MPG and I'm still debating whether or not I should spend the $$ on activating the Escort's insurance, so I can drive it--and can't decide if it's worth it or not. Liability insurance on the Escort will run around $260 or so for 6 months and I don't see myself driving enough to make it worth the cost--I won't save enough on gas to pay for the insurance.
"It's worth it to have a second vehicle handy?" I can drive the van, if need be, even though it gets 12 MPG with a tailwind.
But most of my driving is to Orland Park, where I work, or around town in Crete. My average trip length (excluding going to work) is not more than about 4 miles. Even if I put the Cherokee on blocks for the rest of the summer, with an average of about 150 miles driven per week, I would save approximately $20 per week on gasoline and other consumables. I'd have to use the Escort exclusively for 13 weeks in order to pay for the insurance--it'd be three months before I would amortize the cost of the insurance, and I'm not sure it's worth it.
Yet. If gas hits $4 per gallon, though, then I'll probably say "hang the sense of it" and just do it. I have my limits. Besides, I have to consider that if I save $20 per week through the end of the year, that's a lot more than $260 saved. But I don't expect gasoline to remain above $3 per gallon past September, or not far above $3.
Still, I bought the Cherokee expecting that the fuel economy would not be nearly as good as that of my Escort. I took that into account when I bought it: yes, this is going to require more fuel. But after thinking all that over, I decided that the cost of ownership would not bankrupt me, and decided to buy the thing expecting to sell the Escort shortly thereafter. (It didn't work out that way. Oh well; it works out fine for me.)
With people desperately trying to get out of their gas guzzlers, over the next couple of years the demand for gasoline will decrease. This will alleviate some of the pressure on our overtaxed refineries, though not enough to make for a real reduction in gas prices. (As in, "don't expect gas to cost less than $2.75 for the forseeable future.")
Ethanol won't help, either. It takes more than a gallon of petroleum to make a gallon of ethanol; it's an energy cost for us to use the stuff. (Add up all the fuel used to make ethanol, from planting to fertilizing to harvest to processing to delivery. And as a bonus, consider that most electricity generated in the US is generated by burning coal; it also takes electricity to make ethanol.) Ethanol is not an energy source; it's a transport mechanism, and as any first-year physics student will tell you, any time you convert one type of energy into another there are going to be conversion losses. This is because of the Laws of Thermodynamics.
Interesting point heard on the Limbaugh show yesterday: we're not in a recession. Did you know that? A recession is defined as a period when there are two or more consecutive quarters with zero or negative economic growth. So far, the US economy has had less economic growth than previously but the growth rate has been nonzero and the economy has not been contracting.
Therefore, it's not a recession. It's just a period of slower growth--and most of the reason the growth rate is slow is that energy costs so damn much.
Thanks, eco-nazis. Because if it wasn't for you jerks, we could be exploiting domestic energy sources and building new refineries, leading to an increase in supply, which would place a downward pressure on energy costs.
Maybe I could still sell the Escort. You never know; I might be able to get $1,000 for it now....