3 min read

Here we go again. Last week oil hit $83 per barrel on the futures market before retreating below the $80 mark. Last year when it hit $80 we were pumping gas at $3.10 or more. This year it’s about $2.80 at the pump. Why all the fluctuation? What drives the market?

We hear that the rise and fall (but mostly rise) is triggered by many forces. These include cold weather, hurricanes, turmoil in oil producing countries, limited oil refining capacity, the China factor, futures traders, Organization of Petroleum Exporting Companies slowing production, the list goes on. Looking more closely at the issue suggests otherwise.

In a well balanced free market system oil companies would be fighting for market share. Exxon-Mobil stands out from most other oil companies in that they drill, transport, refine and sell oil relatively free from foreign involvement. This suggests that when OPEC flexes its muscle or when there is unrest in Nigeria, Iraq or Iran their oil is unaffected. This would further suggest that the price at the pump would remain stable, a chance to pick up market share.

Not so. Just watch the price per gallon on an Exxon-Mobil station across the street from a CITGO station (read Chavez of Venezuela). The two stations’ prices remain in lockstep. Why? Because they can. Why gain market share when you can pump less and make more?

The bottom line is supply and demand. With only six giant oil companies controlling more than 90 percent of our oil production we see the equivalent of price fixing. The real problem here is demand. We Americans have built our communities, jobs and lifestyle around cheap energy. We are hooked. This addiction came slowly and subtly and as with the smoker, alcoholic or drug addict we have few choices. We can’t even go “cold turkey” to kick the habit.

So, what do we do? How can we, as individuals, address this problem? The long-term answer is alternative energy. We must build wind farms, add solar panels, develop tidal energy, use hydrothermal energy. In the shorter term, and much less environmentally friendly, we could increase our use of coal with sequestered carbon, build more nuclear plants and use tar sands and oil shale. All of these could lessen our use of foreign oil and increase the energy pool. Then there is the magic word “conservation” or maybe better “efficiency.” Cut our personal use of oil.

Small lifestyle changes could make a dramatic difference. The average driver consumes 10-30 percent more gasoline than is needed to perform the same tasks. The simple act of driving smarter and more carefully can alone save 10-15 percent or more on gasoline. Examples include 1) drive the speed limit (a biggy); 2) accelerate more slowly, watch the tachometer and don’t race the engine; 3) shut down the engine to reduce idling; 4) keep tires inflated; 5) get regular oil changes; 6) avoid extended warm-ups; 7) use your air conditioner only when needed; 8) plan your trips to combine chores and activities; 9) car pool or use public transportation; 10) and maybe the biggest of them all is park the car and walk. Multiple benefits will come from developing this habit.

Oil companies will not solve the energy crisis. Government is unlikely to do so but if we were to cut our personal energy consumption by say 20 percent, the equation would shift dramatically. We have the power to make a change. It will take the cumulative effort of many but it is within our grasp. Pass the word!

Jack Bash is a resident of Cornish and the executive director of the Hydrogen Energy Center in Maine. He has recently retired from the Graduate School of Oceanography at the University of Rhode Island where he served as Marine Superintendent and Science Officer. He can be reached at bash@hydrogenenergycenter.org

Comments are no longer available on this story