With gasoline rapidly approaching $5.00 per gallon, it is safe to say that the days of cheap gas are gone for good. We have been unusually fortunate in this country. Truth be told, we still are. When compared to much of the rest of the world, gasoline is still a bargain here. Although cheap gas would appear to be a blessing, the other edge of that sword is anything but. We have been lulled into a false sense of security - the wake-up call is loud and clear.
The Arab oil embargo of 1973 saw the end of the muscle car. The big inch, big horsepower and very fuel inefficient cars of the era disappeared almost overnight. They were replaced with detuned and only slightly more efficient cars and the influx of economy imports. Toyota, Datsun and Honda became household words. Along with their European counterparts, these manufacturers were already used to producing cars that treated gas as a valuable commodity. Eventually, U.S. automakers began to get the message, but demand for gas-hungry vehicles returned as quickly as we became acclimated to the new higher prices.
The second oil crisis in 1979 brought with it gas prices in excess of $1.00 per gallon. It was a price so unheard of that pumps had to be modified to reflect the extra digit. It was also the death knell of the “full-service” gas station. Although that was the last oil-crisis that would brings lines and rationing, it did not, apparently, teach us to get ready for the prices we are stuck with today. Again we got acclimated and again the urgency to prepare for this day went away. Prices went up a lot and down a little - we hardly noticed. Now that they just go up, we are paying attention.
So here we are. Gas prices are increasing daily and it’s not over yet. Now we are scrambling to produce more fuel-efficient cars, hybrids, all electric vehicles and fuel cells. The urgency looks like it’s here to stay. Gas-guzzling SUVs are not selling like they were a year ago and the used car price of some older econo-boxes is rapidly appreciating. Government mandates for fuel-efficiency seem almost silly, as the market is now the predominant force driving auto manufacturers. And if you still wanna play, you’re gonna pay - that’s how it works in a free market. Priorities are now shifting towards public transportation, telecommuting and other alternatives that reduce the demand for market priced fuel. Eventually, the price will stabilize.
But it won’t be at $2.00 per gallon - ever again.