Gas Prices

I filled up my gas tank this morning. It was $2.89/gallon. It was $2.77 yesterday morning. I probably should have filled up then - oh well. I suppose the gas price increase is due to Hurricane Rita, but it hasn't even made landfall yet. I have heard many of the oil refineries have temporarily shut down for the storm, but I find it hard to believe the gas supply has been affected already. No doubt, the price of gas will go over $3/gallon this weekend after the storm hits. Part of me doesn't mind the high gas prices. I drive a Toyota Prius and get about 50 miles/gallon, so I'm not impacted by the price of gas quite as much as some others, but that's not the reason I don't mind the price increase. I don't mind the increase, because it's my hope that the high gas prices will raise the energy issue in our country so that some real progress is made. I think there is real opportunity to make some drastic changes to our energy infrastructure to make it more sustainable. Our country and its economy is incredibly dependent on the oil industry, which is clearly not good. Like any good Wall Street investor would say, we need a diversified portfolio. The US needs to develop alternative energy sources, preferably environmentally friendly and sustainable sources, to create a balanced energy industry. If our energy industry is more diverse, a major disruption of one particular source, such as oil, would have a far smaller impact on the economy. The solution to high gas prices is not to increase the oil supply, it is to increase the availability of alternative energy sources.

Many alternative energy sources, such as solar, are more expensive than oil. If the price of oil continues to climb, they may not be any longer. But even if the price of oil doesn't rise high enough, the US government should step in and help the other energy industries out. One of the main reasons alternative energy sources are more expensive is because they are produced in small quantities. If the demand for these alternative energy sources increased, the price would go down, but the demand won't increase unless the price goes down. This is where the government needs to step in and help lower the price hurdle so the alternative energy industries can take off. The development of alternative energy sources benefits our environment, but also the economy as a whole by removing our dependence on a single energy source.

I am really intrigued by the idea of decentralized energy, especially for more rural areas, rather than massive power plants. It makes sense to me to have a solar panel on the roof of each house, to have each house be it's own sustainable energy source. Of course, a centralized approach does make more sense in densely populated areas. But again, why not have more diversity; a decentralized energy approach for rural areas and a centralized energy approach for cities.