America’s oil turmoil

From wood to coal and coal to gas and gas to electric, supply and demand has always been an issue ever since civilizations around the world first began to flourish. It is for that reason that the blame for ever-increasing gas prices goes to supply and demand.

Quick fix — A shift to domestic drilling could solve America’s oil dilemma. Photo credit: California Environmental Protection Agency

President Barack Obama and his administration are not the sole contributors to the unpleasant economic reality. All that to say the perhaps America, who consumes more than 20 percent of the oil supply worldwide, should consider easing up on the amount of wasted energy — in this case, fuel consumption. While Obama blames high costs of gasoline on market manipulation, hard-working individuals are paying around $4 per gallon on gas. I guess it’s time to invest in a Chevrolet Volt — assuming I had close to $40,000 to spend on one.

“Gas would have to approach $8 per gallon before many fuel-efficient cars could be expected to be paid off in the six years that an average person owns a car,” Jesse Toprak, vice president for market intelligence at TrueCar, said, according to the NY Times.

Analysts are saying that added cost of the new technologies is limiting the ability of fuel-efficient cars to gain acceptance. Hybrid sales only account for less than three percent of the total market, not to mention plug-in cars experiencing even lower sales than expected.

“If they want these technologies to be mainstream, pricing still needs to come down,” Toprak said.

Analysts say that many people don’t take into account how much they will actually save when purchasing a fuel-efficient car. Car buyers likely overestimate how much the added miles-per-gallon relates to actual savings.

According to TrueCar, a buyer who chose the Leaf instead of a Nissan Versa would need to drive it for almost nine years at today’s gas prices or six years at $5 per gallon before the fuel savings outweighed the roughly $10,000 price difference. The Volt could take up to 27 years to pay off versus a Chevrolet Cruze, assuming it was driven beyond the battery-only range. However, the payback time could come down to about eight years if gas costs $5 a gallon if the driver remained exclusively on battery power.

The Lundberg Survey said in March that gas prices would need to reach $12.50 a gallon for the Volt to make sense on financial terms. It said the Leaf would compete with gas at $8.53 a gallon.

Ironically, in a recent survey by Consumer Reports, the most satisfied drivers own Volts and 93 percent of Volt owners would definitely buy the car again — though only 12,000 are on the road today.

“If you provide consumers with what they want, they won’t mind paying a premium to get it,” Toprak said, according to the NYTimes.

Another point to consider is the fact that Obama has, so far, been unwilling to even consider drilling for more oil on our soil. At the moment, Obama seems more concerned with proposals of throwing money at enforcing oil prices than he is with finding ways to lower them. And the last thing America needs is more money going to federal authorities.

Based off of these results, the adage “you get what you pay for” is misleading and outdated. I do believe, however, that reducing the cost of eco-friendly cars will allow consumers to afford them.

Of course, that is if you are fortunate enough to be able to pay the premium for anything these days. For now, I will stick with my gasoline-powered car and continue to trudge through the rising gas prices.