I?ve been suffering from sticker shock lately every time I gas up my sport utility vehicle. With gas prices soaring, I?m bracing for a replay of the 1970s and early ?80s when gasoline prices tripled and inflation gripped the country. Let?s keep our fingers crossed that it doesn?t happen again.
According to U.S. Energy Department, the average cost of gasoline could reach $1.80 per gallon by summer and may even reach $2. And government analysts forecast that if higher oil production is put off until fall, there likely will be a repeat of the soaring heating-oil prices that have plagued the Northeast this winter.
In 1975, I traded in my old Ford Fairlane with a Thunderbird V-8 for a Volkswagen Beetle with a 40 horsepower 4-cylinder. It was quite a comedown but I felt it was my duty as a responsible citizen to conserve energy. At the time I fully believed the dire predictions that the world would run out of oil in 20 to 30 years and we would all be riding bicycles to work.
Now, 25 years later, we?ve given new meaning to the term conspicuous consumption as auto makers vie to create huge, extravagant SUVs and passenger trucks that make my old Ford look like an economy car. I remember shaking my head at those poor misguided souls driving cars that got less than 20 miles per gallon. Now, on a good day, I get 17.
It doesn?t appear that the world is going to run out of oil anytime soon. The current jump in prices resulted, in part, from an oversupply of oil on the market. Oil prices have been rising since OPEC and non-OPEC producers began cutting back production in the spring of 1998 to counter a drop in prices to 12-year lows. Total cutbacks amount to some 5 million barrels a day. Prices now are so high ? and inventories are so low ? that the United States and other Western countries have been urging OPEC to increase output.
By the time you read this OPEC probably will have increased production to stabilize prices, but I suspect we are entering an era of higher energy costs across the board. It?s been my experience that prices go up on a regular basis but seldom go down.
In terms of fuel costs I would say we?ve had it pretty good for the past 15-20 years. During a time when everything from a loaf of bread to the family sedan has doubled or tripled in cost, the price of gasoline has stayed about the same. Maybe it?s time for a cost correction.
I know that can?t be a pleasant thought for those of you who manage a fleet of utility vehicles.
Perhaps because of my experience with energy conservation in the 1970s, for the past two years I have been helping organize the Energy Efficiency Forum for the Water and Wastewater Industry. The third annual forum will be held Aug. 27-29 in Philadelphia. While the forum traditionally has focused on big energy users like pumping and aeration, we plan to have presentations on the state of the energy industry and what managers can expect for the future.
If you have an interesting project that might be suitable for discussion at EEF, give me a call. I would be interested in hearing about it.
Right now I?m thinking about buying another Beetle. The one I bought in ?75 cost $2,100 new. I wonder how much they?ve gone up since then ?