At what gas price would you telecommute?

Don't forget there has not been any refineries built in 30 years, even though there has been more types of gas that the states have required. Don't forget that not only has our demand for oil continued to grow, but the world demand has also continued to grow.

lack of MPG targets for manufacturers
The other two are at least somewhat addressable by some means of legislation or industry curtailing.

A more sane way of solving the problem is to have the consumer pay the true cost of energy. Does the gasoline you buy require us to import from unstable governments, resulting in a higher defense bill when we are in more conflicts over it? Put a tax on gas to foot the bill. Does gasoline hurt the environment? Put a tax on it to cover the cost.

Worried about tax payer backlash? Give out a refund check to cover the average cost. Those who buy the fuel efficient car or choose not to live an hour from work will make a killing. Those who don't will get killed. I bet you'd see habits change REAL quick.

In

Gas prices in the USA are not particularly high -- even at $3.50 per gallon. Gas in Europe [toledoblade.com] costs $10 per gallon.

Such high prices in Europe does not hurt the European standard of living because many Europeans use public transportation; bus and trains are relatively cheap to ride. In the USA, many Americans refuse to use public transportation due to class snobbery. In my neck of the woods, about 80% of the passengers on the bus is either impoverished Americans (from ghetto neighborhoods) or illegal aliens from Mexico. The occupancy of the buses is about 50% during most of the day. Meanwhile, the freeways are packed with late-model cars driven by the wealthier class.

Frankly, even if gas prices increased to $10 per gallon in the USA, Americans would not necessarily experience a decline in their standard of living -- if they use public transportation. It is cheap although it may be slighly inconvenient because you must time your life according to the bus or train schedule.

Note that American politicians never compare European gas prices to American gas prices. The politicians just tell Americans what they want to hear: "Gas at $3.50 is too expensive. We Americans are a sad, pathetic victim of the greedy oil companies. We should force them to lower gas prices back to $1.50 per gallon so we can enjoy your monster SUV."

These are the same Americans who overwhelmingly supported the invasion and occupation of Iraq.

I disagree:

http://www.personalrapidtransit.com/ [personalrapidtransit.com]

 

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).

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 [wikipedia.org]

Why is tax on gasoline in the USA so ridiculously low?

Because, unlike in Europe, our cities are new enough to have been (stupidly) designed for cars instead of people. Now we're screwed, and have to have artificially low prices on gas to compensate.

Dude, go take Economics 101 before you spout off nonsense in public, it might save you the embarassment.

The Tragedy of the Commons is a problem with a free market system, because the Commons is an externality: the users of the Commons don't pay the cost of the maintenance equally to the profit they gain from exploiting it, therefore they have an incentive to exhaust the Commons.

Collective action, either by taxation (so that the externality is reflected in the costs) or by outright rationing access to the Commons is the only thing that can stop the Tragedy occuring. And collective action to regulate access to a Commons is one of the defining characteristics of Socialism. Depending on how this is implemented it may be either old-fashioned authoritarian Socialism, Libertarian Socalism, or a mixed model like European-style Social Democracy, but the free market is definitely no solution here.

Mart

It isn't just what we personally spend on gasoline. I've noticed prices on fresh produce and other things in the grocery store are up too. High fuel prices affect the price of everything. Almost everything in the store came by ship, truck, or train. That takes fuel and higher fuel costs are passed on to consumers. High fuel prices are costing you more than a 0.15% household budget increase. Some families have to do more driving than you do so the direct costs for others is higher as well. That means many people stay home more and spend less when they are out. That will ripple through the economy as well.

This is a much larger issue than your monthly gasoline bill.