From Iceland — Fuel Crisis in America

Fuel Crisis in America

Published August 5, 2005

Fuel Crisis in America

I read an online article this morning about a ‘war games’ simulation conducted in America showing how fuel prices could soar as a result of certain events, such as terrorist attacks in Saudi Arabia and Alaska, political instability in Nigeria and other scenarios. In short, fuel supplies would be choked, the cost of oil would soar to $120 per barrel, gas would rise to $5.30 per gallon and the U.S. would slide into an economic recession.
Let’s put this in perspective, current fuel prices in Iceland are approximately 110 kronur per litre. At today’s rate of exchange of 65 kronur per dollar, the cost of a gallon of gasoline in Iceland is $6.43. Talk about “crisis level” prices! The current U.S. national average for gasoline is $2.21 per gallon, that would be 37.8 kronur per litre. If we saw this price at our local gas station, we would be shocked by the amazing deal being offered. We would immediately fill our gas tank to the top and then alert all of our friends. The “crisis level” price of $5.30/gallon as stated in this article, correlates to approximately 91 kronur per litre. This would still be considered a deal.
Americans are cry babies. They need to face the reality that their energy policies, attitudes and behaviours are woefully ignorant and backwards. Most Americans believe that driving is a birthright and if they want a 500 horsepower, 10-cylinder, Viper-powered sport truck that gets six miles per gallon then, so be it. Wait till these people have to spend $250-300 to fill their 40-gallon (152-litre) tank. The average European is already dealing with what the average American would called “crisis level” gas prices. They do it by purchasing automobiles with small displacement gasoline and diesel engines. Most of the trucks (SUVs) here are diesels, very few are in America. In fact, in many cases, in America diesels aren’t even offered.
I am always converting prices in Iceland to U.S. dollars. This is something I should stop doing because I can’t help but be consistently amazed at how expensive things are here. But living in Iceland has taught me to adapt. Yes, fuel is expensive here – so is everything. So, drive a smaller car. I am not saying that Icelanders are somehow inherently more environmentally enlightened than Americans. If you ask me, Icelanders are a lot like Americans: they love their cars and they are major consumers. It’s just that the tax climate and general high costs of life in this country are very prohibitive. And, Icelanders remember more vividly what it is like to go without.
The current consensus is that fuel prices will not stay at this level and will most likely drop again. Many experts claim that this is an issue of refinery capacity, not a lack of oil. Nevertheless, it seems obvious that this is a sneak preview of what’s to come for the world in general and the United States specifically. I don’t know about you, but this sneak preview frightens me. I don’t see much movement in Americans’ willingness to embrace change in the energy arena. We can only hope that they wake up to this looming global reality and that the next U.S. president will be a strong leader, willing to promulgate a more sensible and logical energy policy.

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