A year ago the average price nationally of a gallon of regular gasoline was $1.79, a price that looked pretty good in September when, in the aftermath of Hurricane Katrina, even regular gasoline began spiking toward $3. After that scare, prices gradually began receding. Last week the Energy Department reported that regular gasoline was selling around the country at an average of $2.18.
A few years ago American drivers would have recoiled at that price, but now most are conditioned to feel relief. Before people stop being concerned about prices again, however, and dash off to buy a gas-guzzler, they should consider the odds against fuel prices remaining stable.
It has been reported by energy experts that most major oil fields in Saudi Arabia and throughout the Middle East are pumping at either near or full capacity, yet worldwide demand is increasing dramatically. This situation is bound to send gas prices upward again as demand outstrips supply. Unless, of course, a major new source of oil can be developed.
A Newhouse News story last week reported that the United States is counting on the vast reserves in West Africa's Gulf of Guinea to replace the Persian Gulf as its dominant source of oil over the next 10 years. Unfortunately, however, West Africa is even more unstable than the Middle East, where the U.S. Navy maintains a heavy presence to protect American interests.
But the Navy is stretched too thin to provide any protection in West Africa. Newhouse News reported that the Navy is down from 568 warships in the late 1980s to 261 today. Owing to President Bush's tax cuts, it is likely the Navy's force will continue to shrink. And without a strong Navy presence, it will be impossible for American companies to extract oil from the Gulf of Guinea region, which is beset with war, terrorists, everyday crime and corruption and anarchy.
With our own country unable to provide more than a pittance of our oil needs, and with the world's vast reserves located in unfriendly countries, our view is that motorists will be money ahead to buy high-mileage vehicles, or better yet, ones powered by alternative fuels.
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