May 25, 2008 - 06:49:42 CDT
The price for a gallon of gas has nearly doubled in the past three years, with experts predicting it will rise to $4 a gallon in the summer; oil continues to post record prices, most recently edging closer to $140 a barrel.There's constant speculation as to when people will begin to change habits; during the high gas price jumps after Hurricane Katrina, experts thought $3 a gallon would lead to lifestyle changes. As late as 2007, the benchmark for change was $3.75 a gallon.
Now at $3.70 to $3.89 a gallon for regular unleaded, area residents say they're slowly changing travel habits and becoming more efficient with their driving, according to a recent online survey conducted by the Bismarck Tribune.
The results of the survey contained a comments section that became heated with remarks about profits for big oil; but many comments also reflected a desperation perhaps felt by a nation, as families helplessly watch budgets metamorphosis from comfort to struggle.
"There isn't a lot that an individual consumer can do,"one person commented. "It is not feasible for enough people to ride to work to reduce consumption. I don't feel that I should tell my children they can no longer do activities because Icannot afford the gas to get them there. It is not fair to them. For how long do we make these changes?"
The survey asked what lifestyle changes consumers were making due to rising gas prices; respondents could choose as many options as necessary. There were five options, including eating out less often, changing transport habits, retail purchases, changing vacation plans and an option to indicate no change in spending habits; 653 people gave 1,508 responses. Those responding didn't have to give their names.
Sixty-four percent of the respondents indicated they were purchasing fewer non-essential retail and grocery items; 61 percent then said they eat out less often. Respondents could choose multiple options.
Few of the responses reflected changes in transportation, such as bike riding or purchasing a more fuel-efficient vehicle.
The most significant changes people are making, according to the survey, were in travel and vacation plans.
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Jacqueline and Lloyd Bentley traveled a leisurely road from Alberta, Canada, down through Montana and North Dakota before heading to their new home in Ontario.
They wanted to take their time sight-seeing, take a month off and tent it, fish and bike in the northern states with their dog, The Red Dog. Enjoy the weather, the exchange rate and even ... the gas prices. Driving a bright red jeep, equipped with mountain bikes on the back and camping equipment on top, the two Canadians stopped at Fort Abraham Lincoln campgrounds last week to enjoy the cool breeze - and violent wind gusts. They said they were very aware of area gas prices.
In fact, American gas prices helped their travel budget. When they filled up in Canada, regular unleaded was more than $5 Canadian a gallon; the average for a gallon of regular unleaded hovered around $3.80 in North Dakota last week.
"When we left Alberta, we filled up and it was $75,"Jacqueline Bentley said. "And it hasn't cost more than $50 here. Everyone is staggered over the prices, but they're not bad." They could be like Canada's prices, was her message.
It's frustrating to them, she added. Canada holds some of the world's largest oil reserves; pipelines pump their oil into American markets. But their prices still trump ours.
Tracy Potter, director of Fort Abraham Lincoln Foundation, said the park continues to get a higher percentage of its travelers from Canada for exactly that reason: gas prices are lower and the Canadian dollar is on par with the American.
They anticipate, however, that gas prices are going to negatively affect their budget and keep many travelers away.
"We'd be fooling ourselves if we thought we wouldn't be affected,"Potter said.
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It's easy to look at the travel industry - the state's second largest industry, in fact - and assume higher gas prices will pull it down. But Americans don't like to give up their vacations, said Gene LaDoucer with AAA North Dakota. They'll just change them a little. Shorten them. Drive shorter distances. Be more efficient with their planning. North Dakota, in fact, may benefit, recently having been deemed the nation's least expensive place to visit.
Changing travel plans is nothing new; since the weeks after Hurricane Katrina, when downed refineries began pitching prices per gallon into the $2.50 range, tourism experts have said travelers will counter the costs by staying closer to home.
But travel is supposed to get worse. Not since the terrorist attacks of Sept. 11, 2001, LaDoucer said, has the association predicted a decrease in holiday travel plans. A heavy statement, relating the climate surrounding gas prices to the climate after terrorist attacks.
The decrease should be about 1 percent over Memorial Day weekend, he said.
"The fuel for vacation is not that big of a factor, generally,"LaDoucer said. "But when you have to fill that gas tank over and over again through the summer, it starts to take its toll on family budgets."
It's a frustration that was reflected in the Tribune's survey results. One commenter said they'd cancelled all vacation plans over the last two years; another said they stay home more to keep from using gas. Several people said they would camp and fish closer to town.
"We won't be going anywhere this year because we can't even afford to heat our house, let alone even think about a vacation,"one commenter wrote. "We are lucky to be able to even eat at all. If this goes up much higher, we will be forced to move out of our home to who knows where, maybe the streets."
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Mike Rud with the Petroleum Marketer's Association recently returned form a national marketer's convention in Washington, D.C. The No. 1 topic was how to curb the trading speculation that's pushing the oil market to near-daily records. Break that down into refining costs, taxes and transportation, and profits begin to shrivel up for retailers even as high prices are passed on to consumers.
"Until that can be stopped, there's just no end to this,"Rud said of the speculation.
He said 2002 was viewed as the benchmark for misery in the petroleum retail industry, when profits were at 7.2 percent; now, retailers are only seeing a 4 percent return.
The end of speculation may come with legislation, or could be communicated through decreased demand. Rud said consumers are speaking out by slowly curtailing their gasoline consumption. Rud said there's been a small downturn in sales of gasoline in North Dakota and the U.S.
"We have to keep working on this issue because the fate of the economy, the United States and North Dakota rests in the balance,"Rud said.
Very few respondents to the survey said they had no change in their spending habits; many expressed concerns that lifestyle changes were difficult when kids, activities and jobs were at stake.
"As a low income single mother this has hit my household immensely,"one commenter wrote. "It's to the point where Iwonder where else I can cut in order to pay for the fuel to make it back and forth to work and get my kids to school every day."
(Reach reporter Crystal R. Reid at 250-8261 or at crystal.reid@bismarcktribune.com.)
Michael Lewis wrote on May 26, 2008 8:25 AM:
South Africa is the leading producer. For decades, it has operated plants that produce an estimated 300,000 barrels of gasoline and diesel a day from coal. A number of other countries, including Qatar, Malaysia and China, are investing in either coal gasification or synfuel production. Increased global demand for oil and other energy has driven up prices and made synfuel production an economically viable alternative.
http://governor.mt.gov/hottopics/faqsynthetic.asp "
Career Enlisted wrote on May 26, 2008 3:01 AM:
REPUBLICAN wrote on May 26, 2008 2:41 AM:
Former Northdakotan wrote on May 25, 2008 11:43 PM:
W wrote on May 25, 2008 8:25 PM:
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SE Forty wrote on May 25, 2008 7:08 PM:
Limited sollutions wrote on May 25, 2008 6:31 PM:
okay... wrote on May 25, 2008 5:05 PM:
yup wrote on May 25, 2008 1:39 PM:
Michael Lewis wrote on May 25, 2008 12:21 PM:
If the US Government spent a trillion dollars over 8 years on domestic oil exploration and coal gasification instead of the war in Iraq gas would be $2 a gallon or less. America could quit sending billions to countries that sponsor terrorism. And reducing our trade imbalance keeps jobs in America. Every billion of trade deficit costs 13,000 jobs. $400 billion for oil last year: do the math.
How long will it take for America to produce enough synfuel to make a difference?
There are already a number of small plants being designed around America, but a large-scale national effort must involve the federal government and will take a number of years. Given South Africa's success in this field, we can assume that if the federal government became meaningfully invested in this concept, America could have a strong synfuel industry within the next decade.
http://governor.mt.gov/hottopics/faqsynthetic.asp
In the U.S., Aramco is under attack because of a highly complex tax break. The company pays Saudi Arabia the fixed price for the oil that it extracts and then collects a production fee of 25 per bbl. But 85% of its payments are considered Saudi income taxes, which Aramco's four parents ultimately can use to reduce their U.S. income taxes. Every time Saudi Arabia increases its oil prices, Aramco's local tax payments rise, and so do its benefits under the U.S.'s so-called foreign tax credit. President Carter has vowed to tighten up on the credits, but he has not made much progress partly because Aramco's owners argue that they need the benefits to stay competitive in world markets. http://www.time.com/time/magazine/article/0,9171,947130-1,00.html
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you think wrote on May 25, 2008 7:53 AM:
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