Gas Consumption Rising Conservation Key

Sean Brodrick takes a closer look at oil and gas consumption in the U.S. Mr. Brodrick discusses how the rising price of gas has caused the public to panic and problematic ideas to arise.

The price of gasoline is soaring. Regular gas has hit an average of $3.72 nationally, according to the Energy Information Administration. On average, consumers pay over 20% more for gasoline than they did in 2007. Rising gas prices are costing drivers' more and throwing politicians, car makers and others into full-blown panic.

Despite the negative ramifications on jobs and Federal Highway Funding, Presidential candidates Hillary Clinton and John McCain support suspending the federal excise tax on gasoline for the summer of 2008. The problem is that oil companies will probably receive most of any tax cut. Plus, without a change in drivers' behavior, prices will probably continue to trend upward. Even if the entire tax cut is passed through to consumers, the savings to motorists would be minimal. For the average motorist, driving approximately 12,000 miles per year, suspending the gas tax would result in a savings that would amount to only $28.

Chrysler is offering new customers who buy a Chrysler, Dodge or Jeep a fuel card that will lock their gas price at $2.99 a gallon for three years in lieu of a standard rebate. However, the driver doesn't get unlimited gas for $2.99 a gallon, just enough to drive about 12,000 miles a year based on the EPA fuel estimates. According to the website "Common Sense With Money," (http://moneycommonsense.blogspot.com/ ) even if a car gets 28 mpg, gasoline would have to cost $4.94 per gallon for the deal to make sense, so the standard rebate would be a better option regardless.

Many people believe that if it weren't for environmentalists, the U.S. could solve their energy problems by drilling in the Arctic National Wildlife Refuge (ANWR). It is true the U.S. already does get oil from remote Alaska. However, acquiring more oil would require exploration, test wells, building of infrastructure and more. It would probably take 10 years for oil from ANWR to start reaching consumers. ANWR isn't a short-term solution to high gasoline prices. Also, nobody knows the size of the recoverable oil reserves in ANWR. Estimates vary, but the mean recoverable estimate is 7.7 billion barrels. The U.S. uses 20.6 million barrels of petroleum per day. The recoverable reserves in ANWR would give us 373 days of supply, or slightly over a year.

"Americans use three times the amount of energy per capita as Europeans and 10 times the amount of energy per capita as people in emerging markets. With the rising prices of both oil and gas, I wouldn't be surprised to see consumers making the shift to electric cars sooner rather than later if oil and gas both continue along their upward trends," Brodrick states.

To read this issue online, please visit:

http://www.moneyandmarkets.com/Issues.aspx3-Ways-NOT-to-Lower-Gas-Prices-1785

About SEAN BRODRICK & MONEY AND MARKETS     

Sean Brodrick joined Weiss Research in 2000 as an analyst, bringing more than 25 years experience as a journalist and financial analyst to the position. He is Weiss Research's small-caps specialist, especially in natural resources, and is the editor of the company's Red-Hot Canadian Small-Caps, as well as a regular contributor to its daily e-letter, Money and Markets.

Previously, Mr. Brodrick was the investment director of The Sovereign Society, the world's leading publisher of offshore asset protection strategies and global investment opportunities.

Recognized for his expertise on Canadian and Australian investment opportunities, Mr. Brodrick has been featured on many financial talk shows, including CNBC Squawk Box and Bloomberg Market Line. He is a weekly guest on Market Matters Radio, a contributing columnist to MarketWatch.com and a frequent commentator on one of Canada's premiere financial websites, HoweStreet.com. His report, "70 Days to Empty," has garnered acclaim for its analysis of the forces pushing America toward its next oil crisis and was described by The Daily Reckoning as "the most important report you're likely to read this year," while his knowledge of uranium has helped investors earn solid gains on the commodity.

Mr. Brodrick holds a B.A. degree from the University of Maine.

Money and Markets (www.moneyandmarkets.com) is a free daily investment newsletter from Dr. Martin Weiss and Weiss Research analysts offering the latest investing news and financial insights for the stock market, including tips and advice on investing in gold, energy and oil. Weiss Research, Inc. is located in Jupiter, Florida. For more information about our editors, or to set up an interview, please contact Jennifer Moran at 561-627-3300 or visit www.moneyandmarkets.com.




Gas Consumption Rising Conservation Key



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