Jones Outlook

Thursday, August 9, 2007

Waiting for new alternative fuel

I agree that we need to cut our addiction to crude oil, not just foreign but oil in general. Not just because of the environment, or just because possible threats that could come from the middle east - but because I'm also tired of a good solid part of paycheck going towards gas for my car.

During a recent trip home, I filled up my car in Storm Lake and it was over $3 a gallon (89 octane with ethanol). On my way home I stopped in a community of Bolivar, Missouri, about the size of Alta, to fill up on fuel and only paid $2.45 a gallon on 87 octane. I'm not a gas expert - I look for ethanol fuels wherever I can and I generally buy the cheapest fuel that will work in my car. But why is there such a price difference? Southwest Missouri is not part of the ethanol boom and still has lower gas prices.

What I remember from economics classes is that businesses will charge what the market accepts - I suspect fuel prices will rise until people refuse to pay for it. Then back it goes down.

Gas prices seem only loosely related to what is going on in the supply-and-demand system. Prices shoot up until people complain, then they drop down, then slowly rise again to another spike (usually around a peak driving period). Slowly we get used to the higher prices and come to accept them with little question. When I first got my license at 16 in 2000, gas was under a dollar a gallon and now seven years later it has been over the $3 mark.

With the inflation rate so high in the U.S., I'm actually wondering if the best thing would be for prices to go higher - to reach whatever the point is that some permanent changes get made. Like demanding cars with better mileage. Whatever happen to the hydrogen car that was so highly publicized on many car sites several years ago?

Yes, electric cars and hybrids are great if you could afford them. Honestly, I don't have the cash to go out and buy a new car like that. There is no retrofit option. If I could afford teh price for a new high-tech carm I probably wouldn't be demanding change.

It seems to me that people are looking to the government to help control prices but if we really want to get independent then we need to turn to the private sector. Everything in the private sector is driven by cost, if the demand is high, private industries will innovate to create the product to claim that potential revenue. Over time, technology tends to trickle down and become affordable to more people. I'm not picky about how the technology is developed. With so many advances, there have to be ways to make cars run longer without using so much fossil fuel. We can't sit back and wait for government to design change. We need to challenge and reward industry. As competitive as we are, wouldn't they want to be the first on the market with the historic breakthrough?

Yes, I realize that my idea would have gas prices go higher before the change, but like so many things in life, it will get worse before it gets better.

* Reach Jeff Jones at jjones@stormlake pilottribune.com