Elissa V.
Weary American drivers are desperate for some relief at the pump, but they're not naïve enough to think they're going to get it. With limited affordable options, they are instead choosing to use less gas on a daily basis - and the oil industry has taken notice.
Reports show that U.S. retail gasoline demand fell 1.96 percent from the same time last year, with the most substantial decline seen in western states. The West Coast consistently posts the highest fuel prices in the nation, and the over $4-a-gallon reality motorists face nationwide has led industry insiders to determine that the lowering demand for fuel will continue for the rest of the year.
Despite political leaders' promises of help, Congress can only do so much to ease the strain of high gas prices. Claims that offshore drilling and exploration of the Artic National Wildlife Refuge will ease America's dependency on oil are largely false since it would take decades for consumers to see an impact. Even the leaps made in the renewable energy industry will take time to come to fruition. And despite their best efforts, lawmakers have no control over the global oil economy - namely, China's and India's rapid energy consumption.
"China is undergoing this economic boom and is effectively willing to pay any price," [Bob O'Brien, the online stocks editor at Barrons.com] said. "Just by the nature of the market, the product is going to seek out the end user that is willing to pay the most. And that dynamic is not going to change anytime soon." - USA Today
With the demand for fuel decreasing, refinery executives are buying large chunks of their own stock in response to the biggest share decline in over 10 years. Profits at U.S. refiners plunged 98 percent at the beginning of 2008, but analysts predict that the Energy Information Administration would soon report a boost in gasoline stocks as a result of the increase in refinery output.
The silver lining in this financial disaster is that Americans are pursuing more eco-friendly lifestyle choices that will have lasting positive effects on society. Hybrid vehicle sales are on a steady rise, and last year Americans purchased more Toyota Prius vehicles than Ford Explorers (which have been the top-selling sport utility vehicle in the U.S. for more than a decade).
"The impact of this shift towards greater fuel efficiency is only beginning to be felt," says Samantha Gross, CERA Associate Director, Global Oil. "The change is evident in the strategies of car makers and in the new focus on electric batteries. Stricter government efficiency standards, set to begin in 2011, will continue the trend." - The Auto Channel
Hindering this progress is bipartisan politics during a heated election year. Last month, officials strongly favored the renewal of tax credits for Americans who purchase hybrids or use energy-efficient building materials and appliances in their homes. Unfortunately, the measure failed to pass again this month as a result of political battles between Democrats and Republicans.
Translation? Business as usual in Washington, D.C.
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