Though high pump prices have begun to affect what kinds of vehicles US consumers buy, it could take years before there is a real reduction in overall fuel consumption, experts say.
For one thing, consumers must be convinced that high prices are here to stay.
"When we get above US$3.50 a gallon, I think people in earnest will consider alternatives," said Anthony Pratt of JD Power and Associates.
"But, there must be a consumer perception that this is the new baseline for gas, not just a spike. If the perception is that the situation is volatile, or short term, there won't be a big change."
Hovering around US$3 a gallon for several months now, the average price of regular unleaded gasoline in the US was US$2.90 a gallon on Monday, up from US$2.13 a year ago, according to the American Automobile Association.
Some of the pump-price blame can be pinned on hurricanes Rita and Katrina. Up to 15 percent of the nation's refining capacity was affected for much of last year, and many refineries are still being repaired.
In addition, rising global demand, spurred by economic growth in China and India, continues to put pressure on world oil prices. And that is only going to get worse. According to the Energy Information Administration, the US is expected to consume 1.4 percent more barrels of oil per day by 2025. India, meanwhile, is forecast to consume 3.5 percent more while China's usage is predicted to increase 4.5 percent.
Consumers in the US have begun to respond.
A JD Power study last year found that only 36 percent of Americans considered a vehicle's fuel economy before making a buying decision.
A Consumer Reports study released last month concluded that 37 percent of consumers now say gas prices are so high they are looking at replacing their current vehicles with more fuel-efficient rides.
Sales figures are also beginning to trend toward fuel efficiency. Compact cars made up 18.9 percent of new cars sold in May, up from 15.7 percent a year earlier while large sports utility vehicles dropped to 3.6 percent of the market from 5.7 percent in May 2004, according to Edmunds.com.
"The most typical pattern has seen middle-income families move from two larger vehicles -- sports utility vehicles or minivans -- to one large vehicle and something more gas efficient. Gas prices have had an impact, but smaller cars are also hip. It's a fashion change," said Jesse Toprak of Edmunds.com. "There's been an influx of new and exciting products."
There are also a growing number of options for consumers seeking fuel-efficiency but all have their drawbacks. Gas and electric hybrids cost between 4,000 and 10,000 dollars more than their fuel-guzzling counterparts. Diesels engines are cleaner than they were in the past, but are still banned in some states. Clean-burning technologies such as hydrogen and fuel cells are still years from being ready for the market.
All of which is why manufacturers such as General Motors Corp are taking a broad view.
"I think the best approach possible is a multi-pronged approach, because ultimately, we don't know what the interest from consumers will be," said GM spokesman Brian Corbett.
"We have three different types of hybrid systems, and we're upgrading our conventional internal combustion engine to make it more efficient. Overall, we're looking at various levels of affordability and fuel economy."
It will all come down to cost, said Pratt.
"Before consumers are willing to pay for any kind of alternative technology, manufacturers have to get prices down to where it's like a powertrain upgrade, the difference between a four-cylinder and a six-cylinder," he said. "Between 800 and 1,000 dollars is around the amount they're comfortable with. And at that level they'll be able to realize an economic payback."
Even then, the combined market share for hybrids and alternative fuel vehicles will be less than 10 percent by 2010, said JD Power's Toprak.
"Things are not looking that great in terms of gas consumption over the next few years," he said. "Look, we're adding nearly 17 million new cars every year to the roads, and even though we may be able to cut some gas mileage here and there, those things are not going to make much of a difference, especially if air fares continue to increase and more people drive instead. I still expect gas consumption to increase."
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry