Fuel Efficiency and Gas Prices

mefistofeles · Heavy Crude Joined: Mar 21, 2005 Posts: 154

Ironically perhaps the one thing that will lead to ever increasing fuel prices will be increases higher gasoline and therefore oil consumption will be higher fuel efficiency in automobiles. Why?

Yes the Prius uses less gasoline than an SUV but in the end this will make oil prices worse because people will be able to commute and do things at higher gas prices.

For example an 100 mile roundtrip commute would cost US $20 in a 20 mpg vehicle, assuming gasoline prices of US $4 per gallon. While that same commute would only cost $8 in a prius, the price of a roundtrip pass on many mass transit systems.

Therefore people will be less likely to seek out mass transit and there will be less political support for mass transit if people decide to go for fuel efficiency instead of mass transit.

Higher fuel efficiency will only result in higher oil prices.

MrBill · Expert Joined: Sep 15, 2005 Posts: 5215 Location: Eurasia

Gasoline and diesel prices regardless of their level are always a cost. Costs should be optimized and waste reduced. Therefore, it should not matter if pump prices are $1 or $10 per gallon. As a cost of production fuel prices reduce profitability. As an end user any outlay on fuel reduces discretionary spending and consumption elsewhere. In both cases it makes sense to optimize costs for the greatest net benefit. This is just common sense. Unfortunately, common sense is in short supply and with high energy prices demand has never been greater. What we are seeing now is poorly thought-out past decisions catching-up to us now individually and collectively. We are now paying for those bad decisions. Opting for more fuel efficient vehicles at the expense of public transport would just be another case in point of our poor decision making ability. Opting for a less fuel efficient vehicle would be worse.

UPDATE: This is a real, real disaster
_________________
The organized state is a wonderful invention whereby everyone can live at someone else's expense.