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Sierra Club
Explore, Enjoy and Protect the Planet
RAW: Uncooked Truth, Beyond Belief

Issue #255
May 23, 2008
Pain in the Gas
Josh Dorner

Hidden somewhere in the bowels of Southwest Washington D.C. is what I can only imagine is the giant 1970s-era computer that spits out the administration's energy statistics and projections. I'm pretty sure that it's the same model as the one that determines the random and inexplicable prices for plane tickets.

It seems that the folks over at the Energy Information Administration are wildly optimistic about our energy future. Or somebody simply spilled their coffee into the supercomputer and now it's run amok, because EIA is projecting that in 2015 gas prices will be a mere $2.50 a gallon (!), in 2016 oil will only be $57 a barrel, and it will still only be about $70 a barrel (in 2006 money) in 2030.

Well, shoot! Looks like we only have to suffer through another few years before sweet, sweet relief sets in and we can all comfortably cruise around in our H2s and grind up all those unnecessary Priuses we thought we needed!

(For reference, gas is sitting pretty today at a new record high of $3.87 a gallon and oil just is at $132 a barrel -- though it's liable to be even higher by time you read this. Meanwhile, everyone from Goldman Sachs to the head of OPEC is saying $200 oil is coming.)

So why does it matter that a few Bush administration bean counters have gotten it so badly wrong, you say? Wouldn’t be the first time, after all.  Well, it just so happens that some other government bean counters -- the ones who determine fuel economy standards -- are required to use those EIA gas price figures when doing their cost-benefit analyses.

In other words, if gas is say $2.50 consumers are a lot less likely to want to pay more for fuel efficient cars than if it's say $4.00 a gallon. By operating under the assumption that gas will magically be only $2.50 in 2015, they only require automakers to install as much fuel-saving technology (which is sitting on the shelf, by the way) as they think $2.50 gas-paying consumers will pay extra for. If they used more realistic figures for gas prices, they'd probably have concluded consumers were willing pay for a lot more fuel-saving technology -- and we'd have ended with fuel economy standards much higher than the 31.6 miles per gallon in 2015 that were just proposed.

What a pain in the gas

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