The transformation of the US for largest importer to largest exporter in only a few years is stunning.
Unfortunately, this is a geopolitical tactic to crush Saudi Arabia and other oil-producing nations like Iran so that it defunds terrorism. The tipping point for the US between electric cars and gas is about $6/gallon from what I've read. CA is getting close, I'm paying $4/gallon but most of that is taxes these days. We can't move forward until we get rid of $2/gallon gas throughout the country.
The US has a radical cost difference in gasoline prices vs most of world.
Some reference per gallon prices right now: China $4.41, India $4.47, Japan $4.93, S.Korea $5.46, Spain $5.90, Germany $6.45, UK $6.59, Finland $6.83, France $6.99, Denmark $7.22, Italy $7.29, Netherlands $7.48
The US by contrast is at $2.99.
The US is now exporting immense amounts of oil and that is set to grow by a lot in the coming years. That hasn't occurred since the export law restrictions in 1975. The US is heading to 2 million plus barrels per day of exports this year. Chart:
More likely the price of US gasoline will continue to drift slightly higher toward the rest of the world, as the exports bring the US closer to a normalization with everyone else (emphasis on closer). Those exports are seeking higher prices internationally, which will result in at least somewhat higher domestic prices (dramatically less domestic captive supply).
Further, the dollar is on a longer term trajectory down, due to the vast US budget deficits that are set to continue perpetually. That will push up the price of commodities priced in dollars, ie oil, which will also push up domestic gasoline prices as a consequence.
Tesla is going to sell a lot of cars as domestic gasoline prices gradually head toward $5 as a normal level (combination of less captive oil supply, and a perpetually eroding dollar value base).
It boggles my mind that I pay only $3 per gallon of gas in Nevada (and $5 in Communist Republic of California) despite the fact that it is obtained by drilling into oceans, in extreme cold weather of alaska or the super hot regions of texas, refined at some place and then transported 1000 miles in ships, trucks, trains.
That price is an example of extreme economic efficiency. Battery prices will go down over time as the industry grows.
It is a good time in the US to stop subsidizing car economy. And let the price of gas increase. At least to the same level as in Europe.
It is heart-breaking to hear that we exclude energy from the embargo fighting to keep the gas prices low at all costs. We should pay $10 per gallon at the pump. And work at curbing our gas consumption.
$4 a gallon is peanuts. Price of gas in Rome, Italy was 1.87 euro per litre when I was there in July. Per litre, not gallon!
So people get around town on little mopeds, motorbikes, small cars and a lot of SMART cars around as well. I agree there is a lot of forward momentum with hybrid/electric cars in terms on technological advancement, but the uptake in the US is abysmal. Just because you drive an electric car does not mean there is no CO2, that electricity needs to be generated from somewhere and unless that source is renewable energy then you are back to square one. But it's not just cars you need to think about: generation of electricity, airplanes, ships, cheap exports from the rest of the world... I remember reding a study a few years ago stating that shipping outputs a lot more CO2 than air travel. Also, ships use the cheapest, nastiest, left over fuel from the refinement process so ends up throwing our more CO2.
http://www.guardian.co.uk/environment/2007/mar/03/travelsenv...
I agree the US probably feels like it has to do something, but constantly patching over the cracks is never really going to fix the problem.
It can't allow itself to become wholly dependent on oil produced by enemies of the state in an inherently unstable region ran by crazy dictators and terrorists.
Yes. Thanks for the insightful comments. I'll be sure to vote you in for president when you run for election.</sarc>
In the part of Canada I live in it's $1.33/liter, which is $5.00/gallon.
I don't see a rush to buy electric cars here. But smaller cars are more popular in Canada compared to the USA. For example, smart fortwo was introduced in Canada four years before it came to the USA. It's rare a product comes to Canada before the USA.
Americans don't have to go from gas to electric. They can go from gas guzzler to gas sipper.
Just wait another year when the oil cartels/speculators have us accepting $4 prices.
The only "good" thing this is making happen is it's slowly taking extra huge/heavy vehicles off the road as people stop replacing them with the same thing every few years. Low 20s mpg for the city isn't worth it anymore.
Oil is expensive because we'll pay that much and use even more.
Did you know the armed forces pay full top price for fuel in Iraq and Afghanistan?
We should probably just tax at $1.5 a gallon right now just to get the demand down ;-). There’s a reason why cars consume less in continental Europe and that’s not just because people there are smarter.
There's a sorta precedent in countries other than the US. Gas in the UK costs at least $9 per gallon, and there hasn't been a huge shift to electric cars: http://www.roadtransport.com/blogs/road-freight-industry-ann... (that link is for businesses only, but if anyone had an incentive...)
Fuel in the US is already much more expensive than two decades ago. I remember buying a gallon for around 90 cents in 1999, and at the same time I read a newspaper article about some immigrant-run stations on the Jersey shore that had slashed their prices to several cents below that, as they were content to make a tiny profit margin and play a long game. Now a gallon costs more than twice as much as then, but as far as I can tell the average American has not made significant lifestyle changes with regard to vehicle usage: they just suck it up.
Just let gas prices be higher than we are used to, people will figure it out for themselves. Blame it on Russia, Saudi Arabia, ramp up local production and call it a day.
I recently sold my large luxury SUV in exchange for a smaller sedan ( that happens to be electric). I’ve always thought I needed a large SUV to do the things I want to do, so far nothing is changed. I personally made a huge quantum leap in personal vehicle choice, tesla convinced me, but frankly the new car could’ve been a more mundane sedan and still saved me a fortune. Lots of low hanging fruit out there if gas prices really are “too high“
> There's an alternate feedback loop. As more people drive electric cars, demand for oil drops and decreases the price of gasoline, making gasoline cars more economical.
A car payment is maybe $200/month. Car insurance is maybe $100/month. 12,000 miles/year at 30MPG and $2/gallon is $67/month.
~$1.20 of the $2/gallon is taxes, refining, distribution and marketing.
So if the market price of crude oil falls by 75%, its contribution to a gallon of gas goes from $.80 to $.20. That's $20/month difference, or ~5% of the cost of operating a car.
And that's assuming crude prices actually fall by that much, and that governments don't raise the fuel tax to make up revenue and/or fight climate change. It's not hard to imagine adding $.49/gallon to the gas tax.
America no longer wants cheap oil; it crowds out the natively produced stuff. Gasoline is currently < $1/gal in many states due to the production glut and pandemic, and the president is currently talking about how to increase the cost of oil.
I don't think that everyone has fully grasped how America being energy independent changes the game.
This is mostly the US because the externalities aren't taxed. In EU the taxes on gas are much higher. With VAT and everything Sweden currently has $4.5 per gallon, down from $5.8 last autumn, this makes any electric car much more compelling.
I've seen a gas station photo advertising $8/gal prices in the LA area. When that goes nationwide, the energy-intensive lifestyle of Americans will come to an end including driving 700 miles to a ball game and towing jet skis around.
Unfortunately, this is a geopolitical tactic to crush Saudi Arabia and other oil-producing nations like Iran so that it defunds terrorism. The tipping point for the US between electric cars and gas is about $6/gallon from what I've read. CA is getting close, I'm paying $4/gallon but most of that is taxes these days. We can't move forward until we get rid of $2/gallon gas throughout the country.
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