While they are reaping record profits, the Saudis are concerned that today’s record prices might eventually damp economic growth and lead to lower oil demand, as is already happening in the United States and other developed countries. The current prices are also making alternative fuels more viable, threatening the long-term prospects of the oil-based economy.
It’s not your imagination, gas prices are higher than they were in 1918 when adjusted for inflation. Unless Saudis significantly reduce the price of gas and keep it down, the path is set to lessen our need and maybe one day eliminate our need for oil as a means of transportation.
My truck gets 15 MPG (when I’m lucky) and the last time I filled it up it cost me $68. When gas was about $2.50 a gallon, I looked at getting a Honda scooter that gets about 80MPG. Considering my truck is already paid off, the break even costs didn’t work out for the scooter nor is it likely to still work out to purchase a more efficient vehicle (I need to redo the math for current gas prices and I will publish it later). I still want to reduce my expenditures on gas so I’m going to burn fat instead of oil.
Assuming the weather cooperates, i will start riding my bike to work next week. I’m also working on resurrecting Project Maverick (my long languishing project car) and it will be electric. Both of these things I wouldn’t have done if it wasn’t for the high price of gas. Apparently I’m not the only one reducing my use of oil, Exxon is selling off it’s retail gas business because it can’t make enough money off it.
Finally my point is that once people get into these habits they are not going to fall out. The movement against oil has already started and will counter the oil producers greed.