"They" said we'd never see it again, but while we were otherwise preoccupied this week, the price of a gallon of gas in Minnesota fell below $2. It's below $1.90 in some locations today, according to twincitiesgasprices.com.
If you changed your driving habits when it shot up to near $4, are you changing your habits back now?
Mea Culpa: I am one of the 'they' who predicted we'd never see gas this cheap again. I even predicted recessionary trends. But I did not expect things to get quite so nasty, economically speaking, that would drive global demand down enough to halve the price of gas in three months. I also did not expect the dollar to strengthen, which has helped drive the price of oil down.
To answer Bob: I am not changing my habits, but didn't really change them on the upside either.
When gas was on the upswing, we got rid of our second car, which was "my" car. I bus to work every day (which I did before we got rid of the car), and am part of the HourCar program for the occasional errands that require a second car.
Even with gas coming back down to $2, using HourCar is cheaper than keeping the van would have been. I don't use the program often, and the total per mile/hour cost a month is usually less than a tank of gas. Also, we don't have insurance, car payment, or maintenance costs (that was the big whammy) for a second car.
So no, not planning on going back to the old driving habits anytime soon.
I was one of those who changed my habits when prices shot up. Those changes included driving at or below the speed limit, not accelerating into stops, and filling up only half a tank. In fact, I discovered all of those techniques on NewsCut.
I'm shocked and elated that prices are under $2 again (keep on falling!), but the only habit I've fallen back on is filling up the tank full again. The convenience of not having to fill up every other day is worth the extra price to me.
I have not changed my habits, as I went for a small, fairly fuel efficient vehicle (2001 VW Golf) seven years ago.
During that time, I have beaten the drum for mass transit, conservation and cleaner alternative fuels, here on News Cut and anywhere else people are talking online (MNspeak, Minneapolis Metroblog, Twitter, etc) about fuel, vehicles or energy.
At the same time gasoline fell below $2 in the metro area, the Twin Cities has been under an air quality alert for particulate pollution. Our air is only "moderate" today, even with the rain.
There is reason to hope. I attended a press conference yesterday for the Next Generation Energy Grants. Some cool stuff is happening here. Tom S. from MPR was there, hopefully he will post a story on it soon.
There's no way that this can be purely supply and demand. There's a lot that I don't understand about how fuel is produced and sold, but I have to beleive that the summer peak we saw had more to do with speculators finding a way to wring a ton of money out of petrol. Sure, we're probably using a little less than we used to, but demand hasn't decreased THAT much.
Haven't you heard? The gas prices dropped because Bachmann talked about drilling for oil offshore! Just talking about it drove down the price! It's so simple, why didn't we think of it sooner?
Alex: what's this about filling up half-way to save gas? That makes no sense to me.
I made my changes many years ago when gas was still "cheap". I live close to most of my business, and do most of that on bicycle- year around. My car averages 35, and on a good day can top 40mpg. It doesn't get used all that much though, and I burn about 25 gallons/month. It's an old car and I'm good with a wrench so maintenance costs are pretty close to zero. Combine that with no payments and cheap insurance and the cents/mile costs are quite low. I once calculated how expensive gas would have to be in order for my cents/mile to equal that of the typical SUV owner and it was something like $11/gallon!!! What a bunch of suckers.
Like bsimon, I never thought gas would come down this far. I'm not holding my breath to see how long it stays there though. The elections are over, OPEC is moving to tighten supplies... I think there is nowhere for gas prices to go from here but up.
Frank, I agree with you. The gas prices will "recover" (for the oil companies) soon.
Remember when it went down to 99 cents in the late 90s and everyone said that would be the last time we'd see it below a dollar. I've got the same feeling about our current situation.