Gas prices under $2 per gallon! Good ... I think
My girlfriend and her friend both screamed as we pulled into the gas station this weekend.
"Oh my God ... It happened!" I broke into a smile.
We were driving back to Mount Pleasant on Friday, having spent the day in Traverse City. The sign at the gas station in Cadillac held a shocker: Regular Unleaded: $1.96.
A crowd of people were standing underneath, taking pictures with their cell phones. I stopped at the pump and my two passengers jumped out to join them.
"Never thought I'd see it," said a guy filling-up next to me, with a great big grin on his face. I concurred. This was cause for a mini-celebration, yet the whole thing was slightly troubling.
I had watched the price fall over the past couple months, each 10-cent decrease taking it lower and lower ... and lower. When it neared $2.50 per gallon a couple weeks ago, I hesitantly acknowledged the possibility it might drop below $2.00 per gallon.
I sold my 1994 Jeep Cherokee this summer during the height of the price spike. It hurt to see her go. That Jeep was a trooper and I'm convinced she will run forever.
But it belched smoke and cost close to $10 a day to drive. I bought a little Saturn four-door, which gets about 27 miles per gallon, and $20 fills her up for a week.
This story is not unique. Millions of Americans shed their gas-guzzling vehicles this summer when oil shot over $140 per barrel and a gallon of gas averaged more than $4.
Now, it appears we might be falling off the wagon again. On Oct. 30, the New York Times headline read "As Gas Prices Go Down, Driving Goes Up." Here is the money quote:
"'Driving habits die hard, and they can reincarnate quickly,' said Christopher R. Knittel, an economist at the University of California, who studies gasoline demand. 'If oil prices continue to fall and the economy recovers, I would expect consumers to return to wanting larger and less fuel-efficient cars.'"
And that, friends, is the curse of falling gas prices. With all the talk about renewable energy, green building, foreign oil addiction and energy independence, it really sounded like a paradigm shift.
Now, if prices stay low, expect to see commercials about how now is a great time to get a deal on an SUV, which are overflowing car lots, unable to sell.
Inescapable from all this is the question of oil supply. The International Energy Agency is warning that the supply problems that caused the spike this summer are far from over.
The IEA expects prices to average more than $100 a barrel through 2015, and possibly hit $200 a barrel by 2030.
I saved my receipt from the Friday fill-up. Why? Not sure, but call me a healthy skeptic. Hopefully I'm not the only one.
