The Lafayette Journal & Courier has a story on how gas prices have jumped in Lafayette, a subject near and dear to my heart since my present commute to work is about 25 miles. However, I’m moving to Lafayette in about 2 weeks which will cut my commute to about 3 miles. So each increase in gas prices make the enormous hassles of moving seem more worthwhile.
So, while I might find a short-lived and perverse sort of silver lining, on the statewide scale, it seems possible that the ever upward march of gas prices could tarnish the two brighter lights of Indiana’s economy in the news today: Toll Road privatization money and the new Honda plant. With increasing tolls and increased gas prices, driving on the Toll Road is a far more expensive proposition now than it was, say 6 or 7 years ago. Presumably increased gas prices will also reduce the demand for automobiles, even if the one’s produced by Honda in Greenville are comparatively more gas efficient.
With respect to these stories, mainly, I suppose, the cost of gasoline calls into question the wisdom of spending the Toll Road privatization money on more roads. I can’t say I know what the correct expenditure would be — I guess that’s where vision and leadership come in handy. (And judging from the quote in the toll road story, we’re not likely to get it from Pat Bauer any more than we’ve gotten it from Gov. Daniels. Bauer complains that, while we’re making interest on the privatization dollars, the foreigners are making a bunch more money. I don’t think foreign businesses making money is the problem — it’s the fact that Hoosiers are going to be paying an ever-increasing tab for the next 70 years. The two are related, of course, but I think it’s important to articulate what the real beef is. )
Greensburg is where Honda is building.
Pat Bauer doesn’t want to mention the increased tolls because it was under Democratic leadership that the tolls weren’t raised. While I admire a politican who doesn’t raise taxes wastefully, the Toll Road taxes should have at least kept up with inflation. Perhaps if that had been done, the Toll Road wouldn’t have been a target for prioritization. I suspect he would have fought anything to do with the Toll Road besides the status quo.
As far as an alternative at a statewide level, I can’t see a superior one to better roads and alternative fuels. Mass transit around Indianapolis makes sense there, but that’s a regional issue that should be primarily funded by the region.
While I admire a politican who doesn’t raise taxes wastefully, the Toll Road taxes should have at least kept up with inflation.
You are so right. State Democrats could have raised tolls and even gas and vehicle license taxes during the 1990’s when insanely cheap oil made the cost of driving very reasonable for Hoosiers. Had the Indiana Toll road been upgraded to use an automatic electronic system like Illinois did between 1998 and 2003, Gov Daniels never would have been able to justify its sale.
Doug,
Oil Prices have hit $75.00 a barrel. That is over $15 a barrel higher than they were last year just before the first major hurricane of the season. First category 3+ hurricane in the Gulf of Mexico and we are looking at $85+ oil spike, the adjusted for inflation all time high.
If rumors prove true that BushCo fooled around with the elections in Mexico delivering an unexpected conservative victory, Mexican oil workers could go on strike like they did in Venezuela. $90+ oil anyone? Not only will Chavez be pissed at the US but even if Chavez wanted to he will not be in the position he was last year to bail the United States out post-Katrina. Countries like China and India have signed contracts with Venezuela for its reserve capacity in case of international shortages.
Like I have been saying for 6 months now. If Hoosiers are looking at $3.50+ a gallon gas come Labor Day, spending the Tollway money making US 31 an 6-8 lane surface road monster effectively dividing Indiana down the middle from Kokomo to Franklin will look pretty silly. Spending money expanding I-69 so Martensville can be another bedroom suburb with deluxe gate communities and PGA quality golf course will look even more stupid. Unless stupid includes making lots of Republican real estate speculators fantastically wealthy.
Any thoughts as to what the future holds, llamajockey? Do you suspect we’re going to be looking at highways and automobiles just with better mileage and alternative fuels? Public transportation, even in the less densely populated parts of the state? Or are we holding our breath, hoping someone invents teleportation before the oil runs out?
What difference will $3.50 make?
$2 didn’t make a difference.
$3 didn’t make a difference.
Right now the big difference I see is that some people are at least thinking about ditching SUV’s for more efficient vehicles.
What difference will $3.50 make?
For most folks it will pinch but nothing more. For folks at the margins it will really start to hurt. Combine it with another season of high natural gas prices and the pain will be very real. That means more bankruptcies and morgage defaults.
Most economists predict that oil will have to reach $4.50 a gallon or oil at more than $100 – $110 a barrel to trigger a major reccesion in the US and a grass roots public out cry for government intervention and conservation measures to contain prices.
What does the near tripling of gas prices in just over 5 years mean? It will start to indicate that world oil supplies are not very elastic. Higher prices have not brought forth new discoveries. Simple fact is that it is very unlikely for there to be any new significant sources of light sweet crude to be found. The world is simply drawing down its existing reserves that were discovered decades ago. Sure higher prices now make it prossible to produce fields that before would have been unprofitable but this production is for now just making up for major oil fields that are going into depletion.
In other words world oil supply is plateuing at best. Peak Oil is only a few years off a decade at most. After that all hell breaks loose as world oil production begins to drop at 2% to 4% a year.
The problem does not lie with the availability of oil, the problem lies with our inability to force the oil companies to build enough refinery capacities to get us thru any glitch. Don’t get me wrong, I hope conservation, new technology, increased gas mileage, etc all comes to the rescue – but…the oil companies have no desire or reason to up refining because that can be used to justify the high cost of fuel. Everytime somebody sneezes overseas that has anything to do with the supply of oil, the market reacts. If there was enough refining capacity and the result fuel, these bumps would not be noticed. Speculation on shortages is driving this market and personnally I hope the day is right around the corner when I can use my garden hose to fill the replacement fuel cell in my car. Of course when that happens the middle east will have nothing the rest of the world needs and have to start forking over $20.00 for a loaf of bread because they can’t raise enough food to feed themselves.