May 27, 2008
Tuesday

"Ah, the summer season has arrived and the wife and I hope to hit the road. That means one thing. I must dump my SUV."

"Dump your SUV?"

"With gas prices soaring, who can afford to drive such a gas guzzler anymore? What's worse: My giant hunk of steel is worth several thousand less than I owe on it."

"Those are the breaks. But isn't that the risk you took when you bought it?"

"Risk?"

"Surely you know that a third of the world's crude oil comes from the Middle East, one of the most volatile regions in the world. That volatility has led to erratic gasoline prices before."

"It has?"

"Sure, back in 1973, the Arab members of the Organization of Petroleum Exporting Countries (OPEC) stopped shipping oil to countries that supported Israel during the Yom Kippur War. An oil shortage resulted and Americans were hit hard."

"I don't remember that far back."

"There were more problems in 1979. A revolution in Iran resulted in reduced oil output. Prices shot through the roof. Some American states rationed gasoline."

"Gas rationing in America?"

"Sure. Then Congress got into the act. Congress established Corporate Average Fuel Economy (CAFE) regulations with the goal of increasing fuel efficiency and reducing America's dependence on foreign oil. As is often the case with government, unintended consequences would result."

"How so?"

"Detroit had already started producing more fuel-efficient vehicles, such as the Ford Pinto my father bought as a second car, on its own. But when the CAFE standards arrived, Detroit had to stop producing the big station wagons my family used to tool around in the early 1970s."

"What did families do?"

"Initially, families switched to the minivan, a "light-duty" truck. Such "light-duty" vehicles weren't subject to rigorous mileage requirements. Detroit invented the minivan to exploit that loophole."

"I was always embarrassed when our dad drove our old minivan."

"And as the economy continued to grow into the 1990s -- as new oil reserves were found in other parts of the world and fuel costs temporarily stabilized -- Detroit exploited the light-duty-truck loophole more. Automakers gave us the luxury SUV and Americans fell in love."

"So that's where the SUV craze came from!"

"Soon every soccer mom was driving a large machine originally designed to carry hunters into treacherous wilderness areas. The giant machines could hold a lot of kids and cargo, but they sucked up fuel."

"The wife and I loved ours until gas shot through the roof."

"That's the problem. Gas is going to keep shooting through the roof. The emerging economies in China, India and elsewhere are growing at rapid rates. The global demand for oil is higher than the amount that can be produced. That is the main reason gas prices have soared."

"You're beginning to worry me."

"What's just as bad is that America is unable to develop its own oil resources. We import 70 percent of our oil. Environmentalists won't let us tap the tremendous oil reserves we have in Alaska. Yet we consume 25 percent of the world's oil!"

"That doesn't sound so good."

"It's long been time for America to get off oil. Even if it is one day proven that fossil-fuel-burning vehicles are not contributing to global warming, oil is still causing us a lot of woes. America is pumping billions of oil dollars into countries that have it out for us. We're giving them the means to cause us grief."

"We are?"

"It makes no sense that a country as ingenious as ours hasn't already switched to cheap, clean alternatives to gasoline, coal and natural gas. Why not nuclear power? Why not some invention nobody has heard of yet? We can't continue importing 70 percent of our energy needs. In any event, that is why you should have thought twice before you bought your gas-guzzling SUV."

"I wish I had. Now I'll be lucky to trade the thing for a lousy Ford Pinto."