$200 a Barrel?

Newsweek just devoted a page in this week's issue to provide a snapshot of what life in America might look like if/when oil goes to $200 a barrel (tho thankfully it fell $6 today before trading ended.) Michael Lynch, of Strategic Energy & Economic Research provided the estimates of changes we can expect. Here are some highlights:

Gasoline Prices: UP 53%
Number of Airlines going bankrupt: 8
Motel stays: DOWN 5%
Sales of Long-distance Bus Tickets: UP 8% (rumor has it that Las Vegas is setting up a special Greyhound bus terminal specifically for the AAPEX and SEMA shows to bring in all the SoCal jobbers and technicians) I know the cost for a Continental flight to Las Vegas from Cleveland is $100 more today than it was a month ago.
Hummer Sales: DOWN 13%
Corn Prices: UP 25% ($.45 each at this past weekend's local farmers market)
Dow Jones Transportation Index: DOWN 15%
NYSE Energy Stocks: UP 12%
Hybrid Vehicle Sales: UP 40%
Consumer spending on gas is projected to exceed spending on food about the 3rd or 4th quarter of 2009. Can't wait!

Why is Gas So Expensive?

At least once a week, someone comments on the price of gas. It went through the roof, it came down again. Why? Why does it fluctuate so much? Did you know that the price of gas at the station reflects more than just gasoine? As of May, 2007, unrefined crude oil was 46.1% of the retail price. Refining costs and profits accounted for 27.9%. Federal and state taxes were 12.7% and distribution and marketing costs were 13.3%. For more up to date statistics, go to tonto.eia.doe.gov/oog/info/gdu/gaspump.html