The Increase of Gas Prices in the United States.

Sandy Chew

Dr . William Roe

Franciscan Dimensions of Peace Justice

30 November 2005

The Increase of Gas Prices in the United States

Scientists and specialists in energy industry believe that energy tops the list of problems facing humanity today because it impacts all other major problems , including water , food , environment , poverty war disease , education , democracy , and population . Energy impacts everything that occurs in modern society . Most energy analysts today agree that energy at the aggregate level is primarily driven by economic activity income , and prices - both energy prices and

prices of substitutes (Haugland et al , 23 . The US was built on the shoulders of reliable and affordable energy . For the past 50 years , oil has been the primary source of energy in the country , and the price of oil is closely tied to economic growth . The four US recessions in the past 35 years were each related in time to an oil price spike . Although for well over a century the global transition away from solid fuels (wood and coal ) to liquid fuels (oil and natural gas liquids ) to gas fuels (natural gas and hydrogen ) and other energy sources has been quite predictable and will most likely continue , contemporary increases in gas prices will continue to threaten various areas of America 's life . Quite logically , this particular trend is expected to intensify with time accompanied with supply drop and further increase in demand . From the critical viewpoint it is one of numerous reasons for why the US energy policy should be no longer focus on and prioritize fossil fuels as almost exclusive energy resources and technologies associated with their utilization . It is evident that in new century and thus in a new era of technological and scientific development , the US government should adopt a transition away from solid and liquid fossil fuels toward alternative energy sources

Worldwide economic specialists are worried that high energy prices would lead to global economic standstill and these fears prompted OPEC as well as exported outside this organization to act to achieve reasonable oil prices . Experts indicate that the price of oil in the global context was not being driven by market fundamentals but rather by a combination of factors outside its control . Among these factors is higher-than-expected oil demand growth , especially in the US and China Furthermore , Russia , which has ramped up production considerably and is now the world 's second largest oil exporter , has raised oil production sharply in recent years , and also this country is running into export constraints due to pipeline bottlenecks , it too contributed significantly to overall trend . In addition , prices are believed to be propped up by a large number of speculators and fund managers in the futures market , by a security premium amid attacks aimed at disrupting supplies , by geopolitical concerns including instability in Iraq , and by tightness in the US gasoline market buoyed by stringent new product specifications

After OPEC tripled oil prices in 1973 , consumers worldwide reduced their oil consumption (Shojai , 112 . While the increase in...