Hooray for high gas prices!

The North County Times Editorial, Sunday, April 23, 2006

$3 gas may help in long run

Our view: Record prices at the pump are signal that behavior must change

Whenever we gas up at North County pumps, we’re getting a loud, clear and expensive signal from the global energy market telling us the days of cheap fossil fuels are history. There are many encouraging signs that people are paying attention —- gas more than $3 per gallon will do that —- but whether local drivers will act quickly and decisively enough is unclear.

Gas prices have jumped 30 cents in just two weeks. Stations throughout North County flipped all three digits on the signs recording their rapidly rising prices, but most drivers were more inclined to flip only one.

The last time gas prices were soaring so high, Hurricane Katrina was ravaging drilling and refining operations in the Gulf Coast. But the winds propelling the latest spike are more diffused.

The main driver is the soaring price of crude oil, which Thursday hit a record of $72.49 a barrel before dipping slightly Friday. But the uncertainty in key oil-producing regions such as Iran, Nigeria and, of course, Iraq that is widely cited as driving the runup in oil prices is unlikely to settle down soon.

But in California, the steps between oil derrick and gas pump are also important. California’s unique blend of reformulated gas leaves us stranded on a gasoline island, enabling refiners to exercise market power and keep us paying higher pump prices than the rest of the nation.

Some Gulf Coast refineries are still closed after Katrina, influencing gas prices elsewhere in the country. More important to California’s refineries, which also supply much of the gas used in Nevada, Arizona and Oregon, are new federal standards requiring ethanol in gas sold in those states. Five of California’s 13 refineries equipped to make the blended gas we use are closed for maintenance, including the retooling necessary to add ethanol for our neighbor states. Meanwhile, California rules requiring cleaner-burning diesel fuel has given refiners another excuse to shut down at this most profitable moment. It’s no wonder refineries are reaping record profits.

But $3-per-gallon gas only feels like highway robbery. In fact, it’s the world telling us that our rate of consumption of fossil fuels is unsustainable. There are many other such signals —- wars and climate change among the most hotly debated —- but none is so quick, so clear and so close to home as what we pay to fill ‘er up.

Sales of hybrid cars are just one measure that we’re changing our oil-guzzling ways. In the first quarter of this year, sales of the gas-electric vehicles were up 37 percent compared with the same period in 2005. Meanwhile, total sales of all automobiles grew just 1.1 percent. Even hybrid buyers are choosing the more fuel-efficient models such as Toyota’s Prius and Honda’s Civic Hybrid. Such trends are expected to continue as more hybrids enter the market, more buyers opt for better fuel economy and more manufacturers drop prices to attract harder-to-reach customers.

Ever since California law started allowing approved hybrid cars to drive in car-pool lanes in 2004, one need go no farther than the managed lanes dividing Interstate 15 between Highways 56 and 163 to see people getting the message.

But as more hybrids take the road, fewer people seem to be car-pooling. San Diego Association of Governments data show that the number of car pools dropped along that stretch of I-15 since the agency opened Highway 56 in 2004. Similar studies showed that car-pooling has dropped dramatically in the rest of Southern California.

On their own, the number of people buying hybrids and the number sharing rides to work won’t tell us whether we’re adapting quickly enough. But in a world of decreasing fossil-fuel supplies and petroleum prices plateauing at previously unimaginable levels, the incentives aren’t likely to disappear.

That’s why shockingly expensive gasoline may, in the end, be a good thing. They may shock us out of our dependence on cheap oil.


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