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Friday, December 19, 2014

Why cheap gasoline is the best thing for America

YAHOO AUTOS

Vehicles line up for cheap gas at the Fuel City gas station in Dallas, Monday, Dec. 15, 2014.

Vehicles line up for cheap gas at the Fuel City gas station in Dallas.

(This is a counterpoint to our previous story: Why cheap gasoline is bad for America — Ed.)

Do you remember when gas was cheap? Every single year I pass by a landmark that reminds me of those wonderful days of not too long ago.

There is this old abandoned station I see on my family's annual trip to Myrtle Beach. It's an abandoned gas station from the Y2K era, and the prices for unleaded gas back then read out like a financial hallucination compared to today: $0.99 regular, $1.09 mid-grade, $1.19 premium.

I am in love with the old gas sign on that building just because those three numbers remind me of a time when it wasn't so hard to make ends meet.

Gas was cheap. Used cars were fairly reasonable for those starting out, and everything from the price of food to the cost of a public education seemed to be quite doable for my young family.

Now, I fear for the monetary pitfalls my children may face in this brave new world where too many folks are lead to believe that legalized oil cartels and government tax policies should dictate gas prices.

 Sometimes it seems like I am visiting a parallel universe where inflation and a lack of mobility are actually seen as a good thing.
So let me just come out and say it.

"Cheap gas prices are the absolute best thing that could ever happen to our country, our civilization, and probably our planet in the long-run."

Let me explain why:

Cheap Gas Makes It Easier To Transport, Travel... And Innovate

This is as true for 20-somethings who want to commute to a nearby college and pursue a better life, as it is for 70-somethings who want to finally see the world and enjoy their golden years. Lower gas prices means more money to do the things that matter within our country, and the world for that matter — and less money for dictatorships and criminal mafias worldwide.

Low gas prices are not the main cause of air pollution.

You know what is the number one cause of air pollution today? Coal. The fuel source that helps power electric vehicles in 46 out of the 50 states is responsible for more air pollution — in smog and carbon dioxide — than any other source.
As for our cars?




London shrouded in smog, April 2014
London shrouded in smog, April 2014

Our emissions primarily depend on two things: fuel standards and catalytic converters. Those fuel standards are rising, and will keep doing so for the next decade at least; every new vehicle will be more efficient than its predecessor for many years to come, lowering our carbon emissions.

If a modern vehicle is operating properly with a Tier 3 fuel, a proper mixture of additives, and a working catalytic converter, the smog emissions level is going to reflect what most of us already see: Clear skies with only modest adjustments in the additive mix in heavily populated areas during the summertime, which equate to a cost of less than a penny a gallon a day.

U.S. pollution standards are tough — in some cities, the air coming out of a car's tailpipe is cleaner than that going in — but they're also the best in the world. You're more likely to find smog blanketing skyscrapers in London and Beijing than Atlanta or Philadelphia, and European officials have now begun moving toward American rules.

But what if people drive more?
The big problem that I see are catalytic converters that fail, and whose costs are almost always transferred to owners who can't afford to repair them.

More than half the trade-ins I see at auctions and car dealerships are due to cars that can no longer pass emissions. The government only requires a warranty of 8 years / 80,000 miles on a vehicle's catalytic converter (whichever comes first), even though most cars are designed to run well past 200,000 miles.

A lot of these vehicles that wind up in what we call in the car business "wholesale heaven" are simply ones that require an expensive repair that manufacturers gleefully mark up to several times their real cost, in great part because it's illegal for anyone to sell a used catalytic converter in the United States.

No competition and the creation of low long-term quality standards results in higher costs. Just like the legalized theft cartel that is OPEC, manufacturers have created legislation that effectively raises the cost of ownership, and creates an artificial planned obsolescence for a product that can easily last for many more years.

Cheap Gas Allows Our Hard Earned Money To Get Into The Right Pockets... Our Own.

The average American family with at least two drivers would spend $4,190 a year on fuel if prices were to stay at the $3.67/gallon they hit back in June when the price of oil spiked to $106 a barrel. (This assumes 598 gallons of gasoline consumed by the current average American driving 13,476 miles a year.)

If the price of gas were to remain in the inflation-adjusted average of $2.60 a gallon from the heights of last summer, the average family would save over $1,200. Every single year.

For millions of people, this could make the difference between a life of perpetual debt and poverty, and a life where the parasites of modern-day humanity — from cartels to usury lenders — have to find some other way to fill up.