Bogged down
Most expensive places to buy gas
Rank Country Price/gal
1. Eritrea $9.58
2. Norway $8.73
3. United Kingdom $8.38
4. Netherlands $8.37
5. Monaco $8.31
6. Iceland $8.28
7. Belgium $8.22
8. France $8.07
9. Germany $7.86
10. Portugal $7.84
108. United States $3.45

I think I’m net ahead… Geez.

We are looking at another 30mpg or higher car to replace my Jeep when it dies though. Previously we had been thinking another SUV, so I guess that qualifies.

Also, we don’t go very far away from home when we want to get out of the house. If we can walk there, we do it. And that’s great because the boys would rather be outside walking than riding in their car seat any day.

At the same time, I do spend extra on electricity, so as to purchase electricity from renewable sources. This costs me an extra 1¢ per kilowatt-hour, and really only adds a few dollars to my bill.

That said, let me get to the point of the question. No, these gas prices will not stick. Unlike the 70′s crisis, the current problem is a supply and demand problem, whereas before it was purely a supply problem. Also unlike the 70′s, the supply problem is natural, whereas it was, at least partially, artificial.

I should detail that a tad.

In the 70′s, there were two root causes. US oil production had peeked and was in decline, which was the natural part of the problem. At the same time, our actions had offended a critical supplier of oil, and they responded by telling us that they no longer wanted our business, and getting their allies to do likewise. The solution to this problem was diplomacy.

At the present, there is a question of whether or not world oil production has peaked. I believe it has, but I am not an expert in the appropriate field to know for sure. Assuming that this is the case, the stuff is only going to get more and more rare, even in the face of increasing world demand, and so the price has no option but to trend up. Diplomacy can provide temporary relief, but neither diplomacy, nor its evil twin, war, can solve it.

There is much complaint about the profits being made by the oil companies right now. If you look at it, though, the oil companies are behaving rationally. They can see that they are approaching the end of their ability to supply their core product, and are socking away money so as to make it possible for them to transition to something else, rather than meeting their otherwise-inevitable demise.

Now for the cynical part of this comment. I suspect very strongly that, if there is not political wrangling going on right now, that there is at least political consensus. Maybe the Bush family did not call their friends in the oil industry, who knows. Even if they did not, however, it goes unquestioned in my mind that the oil producers would like to see a Republican still in the White House next year. As such, dipping into their profits a tad, they can temporarily lower prices, so that it looks like the Republicans came through for us. As such, I expect the prices to rise again, starting in mid-November.

http://blogs.moneycentral.msn.com/smartspending/archive/2008/08/01/how-long-will-the-new-frugality-last.aspx