It’s not a secret anymore folks, the world has a growing addiction to oil. Booming economies like China and India are rising powers in world oil consumption. Worldwide, more cars and trucks are on the road than ever before, and regardless of how hard we push alternative forms of transportation, people are going to keep driving. With that said, an imperative question looms in our future: How do we combat rising fuel prices and overall usage?
As unfortunate as it is, taking on the oil industry is futile in many cases. With their seemingly unlimited (and ever growing) budgets, the oil companies of the world have all of the resources necessary to continue their dominance over energy production. So where does that leave us? Either those in charge convince people to drive less, which is highly doubtful as many rely on their cars for their livelihoods, or we focus on the automakers. According to the EPA, passenger cars account for 40% of the oil consumption in the US alone. The ones who make our cars have just as much of an influence on whether we save money on gas as the oil companies who provide the gas.
Without diving into the political and social issues occurring in the Mid East currently, there is one tried and true economic fact that we face today: any increase in price of a product generally drives down it’s demand. This goes for oil too, but where exactly is the tipping point? The Obama administration recently raised CAFE (Corporate Average Fuel Economy) standards to 35.5 mpg by 2016 and 54.5 mpg by 2025 per automaker. The inherent issue is that while this may increase fuel economy in cars and light trucks, the source of fuel will still be predominantly oil based.
Perhaps giving financial incentives to the automakers who make greener cars using alternative car fuels, not limited to only biofuels but also including hydrogen and electric engines as other options as they become more economically feasible. Just like recent tax breaks for consumers who purchase electric or hybrid cars, there’s reason to believe that automakers might follow suit and start bringing greener cars to the street sooner than we thought.
Earthgarage – Greener Car. Fatter Wallet.