Gas prices plunge; return of the guzzler?

Moderated by Rick Badie

Auto sales are going gangbusters, thanks in part to drastic declines in gas pump prices. Fuel-efficient vehicles, however, aren’t necessarily drawing consumers to car lots. It’s gas guzzlers — big trucks, SUVs and such. Today, an environmental lobbyist suggests we forego the Chevy Suburban for a Volt, while a research fellow says, buy whatever floats your fancy.

Think twice before buying that SUV

By Mark Reynolds

People filling their cars lately have seen the price of gasoline drop dramatically. Americans with big-car lust might be thinking, “Woo-hoo! Time to buy that Chevy Suburban.”

Think again.

We’ve been down this bumpy road before. In the early 2000s, with gas hovering around $1.50 a gallon, Americans fell in love with gas-guzzling SUVs. By 2008, however, Hummer owners found themselves dropping Benjamins left and right when gas hit $4 a gallon.

Our memories are short, though, and with the siren song of cheap gas beckoning, sales of big vehicles are on the upswing. November sales of the Cadillac Escalade SUV were up 91.5 per cent over November 2013, and sales of Ford’s Navigator rose 88 percent.

Our gas is cheap now because of the glut of oil on the world market, resulting primarily from new and harder-to-extract sources like the tar sands in Alberta and shale formations in the U.S. These sources – more costly to extract and process than conventional oil – became profitable when oil shot above $80 a barrel. When oil breached $100 a barrel, the gold rush was on, producing the current glut.

The Saudis, of course, would like to see higher oil prices, but the oil glut ensuing from North American sources has sent prices plummeting. In times past, the Saudis and other OPEC nations would cut back on production to stabilize and boost the price. But they have other ideas this time: Squeeze out the competition.By keeping the spigots wide open, the Saudis are pushing the price of oil below levels that are profitable for unconventional producers. Their strategy appears to be working. The Houston Chronicle reports 550 oil rigs in shale formations are shutting down because of falling prices.

It’s time for us to get off the oil market roller coaster, and the only way to do that is with a significant and predictable price on carbon.

The point that many Americans overlook is that cheap gas really isn’t all that cheap when you factor in the damage being done to our environment and the impact of global warming – droughts, floods, food shortages, wildfires, property damage from extreme weather and rising sea levels.

The good news, though, is that the same market forces pushing sales of gas guzzlers can be used to reverse the trend toward smarter, cleaner purchases. Toyota Prius sales spiked when gas hit $3 a gallon for the first time, and again when it reached $4 a gallon.

The trick is to avoid peaks and valleys in the market that lead to erratic consumer behavior. A steadily rising fee on the carbon dioxide content of fossil fuels would smooth out peaks and valleys and motivate consumers to make choices that are economically wise for them and ecologically smart for our warming world.

But wait. Won’t a price on carbon raise fuel and energy costs and be bad for our economy? Not if it’s done the right way.

A study from Regional Economic Models Inc. looked at a carbon fee starting at $10 per ton of CO2 and rising $10 per ton each year. Revenue from the fee was divided equally among households and refunded as monthly dividends, offsetting higher energy costs and then some for most Americans.

Under this approach, the study found that after 20 years, CO2 emissions went down 50 percent and 2.8 million jobs were added, primarily because of the economic stimulus of recycling carbon fee revenue into the pockets of people.

We have two choices: Continue to dance to the tune being called by Saudi oil merchants, or get off the roller coaster and move away from our dependency on all oil by putting a revenue-neutral price on carbon.

My advice: If you’re buying a Chevy, go with the Volt instead of the Suburban.

Mark Reynolds is executive director of the Citizens’ Climate Lobby.

Choose the vehicle you want

By H. Sterling Burnett

Environmentalists are coming after your car — again. And what they don’t want you to know is their crusade, if successful, would result in a multitude of unnecessary deaths.

With the false promise of reduced dependence on foreign oil, environmental radicals convinced Congress to establish Corporate Average Fuel Economy standards beginning in 1975. The standards required cars to meet federally mandated fuel economy targets or pay a hefty tax on gas-guzzling sedans. The results? Many people switched to smaller, more fuel-efficient cars. Others, however, started driving trucks, and a new category of vehicles was born: SUVs and minivans.

As a result, the economy standards did not reduce our dependence on foreign oil. But for those who switched to the smaller, more fuel-efficient cars, they did cost lives.

The fastest way to increase fuel economy was to shed vehicle weight. In the process, cars were made less safe. Research has shown the size and weight reductions of passenger vehicles undertaken to meet the standards resulted in tens of thousands of unnecessary deaths, a tragedy beyond comprehension.

Before the standards, small cars were a pretty small portion of the total car market. Thus, when cars crashed, they were commonly of equal size and weight. A disparity grew between vehicles, however, as some former sedan drivers switched to compacts and subcompacts, while others shifted to trucks, minivans and SUVs.The laws of physics don’t change. In a crash, larger and heavier is better than lighter and smaller. With comparable safety equipment, occupants of small cars do worse than people in larger sedans, minivans or SUVs in every kind of accident, insurance data show. Naturally, environmentalists don’t like to talk about this.

In the late 2000s, in response to high gas prices, some drivers abandoned their trucks and SUVs for smaller vehicles with greater fuel efficiency. Environmentalists were thrilled. Now, with gas prices falling, drivers cheer, but environmentalists are up in arms.

The activists now argue people should drive small vehicles not to defund Middle East tyrants, but to prevent global warming. Problem is, the U.S. Environmental Protection Agency and National Academy of Sciences have found shifting to more fuel-efficient cars will not prevent or even slow purported global warming.

EPA estimates U.S. car and light-truck emissions make up, at most, 1.5 percent of all human-caused greenhouse gas emissions. Thus, if everyone bought 40-mpg cars, greenhouse gases would decline by less than a negligible 0.5 percent.

A National Academy of Sciences study found higher Corporate Average Fuel Economy standards would only shift greenhouse gas emissions from the tailpipe to the factory, because vehicles using lighter-weight materials (such as aluminum, plastics or composites) require increased indirect energy consumption from the production of substitute materials, thus offsetting any decreases of greenhouse gas emissions achieved through fuel efficiency.

If social conscience is the driving force in your purchasing decisions, and high fuel economy floats your boat, you are free to buy electric, hybrid or clean diesel vehicles. If comfort, power and the ability to haul a boat or ferry a soccer team is your goal, you should be free to get the large, powerful vehicle that fits your needs.

The moral of the story: Choose the car you want. The life you save may be your own, and the planet won’t care!

H. Sterling Burnett is a research fellow with the Heartland Institute.

 


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