Obama Tire Guage Energy Plan

Barack Obama just suggested that Americans can help conserve energy by inflating their tires. The McCain campaign is making a bit of a joke from this suggestion. In fact, this morning the McCain campaign distributed tire pressure guages to reporers and emailed supporters offering them “Obama Energy Plan” tire pressure guages if they donate $25.

Is this whole tie pressure bit just a lot of hot air? Not really…although it won’t be a major solution to our energy problem, little things do help. Keeping tires inflated properly can improve gas mileage 3-4% resulting in a savings of about twelve cents a gallon, according to the overnment’sd website www.fueleconomy.gov

According to the Energy Information Administration, in the US we consume 9,286,000 barrels/day (390 million gallons/day) of gasoline. Three percent of that consumption is a savings of 11.7 million gallons a day. Here’s some interesting related stats:

Consumers would spend 46.8 million dollars less a day for gas (assuming $4 per gallon price)..so that’s 1.7 billion dollars a year less that consumers would be spending on gas that could be spent elsewhere in the economy! Interesting numbers…the fact is that we’re consuming so much oil that even a minor savings can mean a substantial dollar impact!

No, I think Obama’s point about inflating our tires was presented incorrectly (at least in tone) as a major solution to our problem, but it has a bigger dollar impact than many of us might think! Don’t these dollar numbers surprise you? Of course, to get 100% of Americans to inflate their tires (or do anything) is unrealistic..but even if half of the population did it, the impact could still be helpful.

Watch Boone Pickens Plan

If you haven’t heard billionaire T Boone Pickens has taken out advertisements to promote a plan for energy independence. Here are some videos of Pickens:

Here’s a video of the Pickens plan:

Here’s a longer version of the plan:

Here’s Pickens on CNBC:

Gas prices versus demand

What is the impact of lower demand for gasoline on gas prices? You would think that lower demand means lower prices but is that always the case?

Here’s a summary of an article about this from USA today:

- WASHINGTON — A decline in Americans’ demand for gasoline is keeping record prices from skyrocketing even further, a USA TODAY analysis of gas and oil prices shows. If crude oil prices come down, refiners and retailers say they will seek to recoup their losses, and the price at the pump is likely to remain high.

Here’s some related stories on this issue…what do you think?

Gas prices

So we have two competing theories of how to bring down the cost of oil, increased supply or decreased demand (the decreased demand is the European solution of high taxes on gas). The increase in supply is straightforward, although some …

The world in general.

Do I like paying higher prices? NO but I do understand supply v. demand as well as what is a need and a want. We as Americans are truly spoiled and want to live extravagant lifestyles as long as we do not have to pay the piper.

gas prices / offshore drilling

Now, price must drop until demand increases enough to match demand with supply, and again, it takes a big price change to make a small demand change. So expanding our supply of oil by a little bit can have a big impact on prices at the …

Soaring Gas Price Will Push Millions Off the Road, Says CIBC Report

“With half of the world’s population never having to pay world oil prices, it shouldn’t come as a great surprise that $130 per barrel crude prices have yet to quash world demand. And the only supply response to date has been yet another …

High Gas Prices and Your Future

It’s the way of things, the writer added: “When supply and demand go through their natural fall and gas seems cheap again, people will buy big cars.” Today’s oil troubles are unlikely to fade away like the 1970s Arab oil embargo. …

What Exactly is an Oil Speculator?

That was the supply side, what about demand? The key talking point here is leverage. Leverage allows any investor to supplement their investment by borrowing to invest more. If I wanted to buy a contract for a barrel of oil at $100 I …

News: Federal Reserve Expects Gas and Food Prices to Drop Soon

“In those countries where strong commodity demands are associated with rapid growth in aggregate demand that outstrips potential supply, actions to contain inflation by restraining aggregate demand would contribute to global price …

Pay attention! The real deal on gas prices

The law of supply and demand applies to oil prices, but it also applies to oil futures. Futures markets operate on commitments to buy so much of a commodity on a certain date at a certain price. By way of example, soy is a futures …

John Sharp: Let Marketplace Govern Energy Industry

With these tax policies, American free markets will amaze the world with our energy production, including all forms of alternative energy, and the laws of supply and demand will bring adequate energy at a fair price.

Bush sings “Addicted to Oil”

Gas prices are so bad, we have to laugh (instead of cry). That’s why I’m providing some humor about the gas crisis in this blog. Watch President Bush sing about our addiction to oil!