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Editorial: Independence Day
July 2nd, 2006

Editorial: Once Again...
June 25th, 2006

Editorial: Home Ownership
June 24th, 2006

Editorial: Mosquito Control in Cedar Key
May 11th, 2006

Editorial: Will Gas Prices Go Up?
April 30th, 2006

Editorial: Tree Ordinance Violations
April 26th, 2006

Editorial: Why Worry about Global Warming?
April 21st, 2006

Editorial: The Purpose of Government?
March 23rd, 2006

Editorial: Air Boat Regatta, Guests or Pests?
January 29th, 2006

Editorial: The East-West Management Plan
December 21st, 2005

Editorial: Water, Water, Water
December 13th, 2005

Editorial: Bad News for Print News, Good for Online
November 14th, 2005

Editorial: A Bad Tradition
November 10th, 2005

Editorial: For the Birds
October 17th, 2005

Editorial: If It Killed the River....
October 4th, 2005

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Will Gas Prices Go Up?

Will Gas Prices Go Up?

Editorial

NOAA's prediction for the 2006 hurricane season will be announced May 22. Meanwhile, researchers at Colorado State University have concluded that we'll have seventeen hurricanes, with five of them in the severe category. Seventeen is an increase of six over the 2005 season.

Oil production in 2005 was reduced because oil wells and refineries along the Gulf Coast suffered hurricane damage. Twenty percent of the production is still down. When oil supplies are down gas prices go up. Political instability in Venezuela, Nigeria and Iraq has made oil supply even tighter. Lately a barrel of oil sells for over $70.00. A long range estimate of demand for oil includes more demand from China and India where the economies are booming.

Irrespective of the need to reduce fossil fuel consumption, the oil companies are doing very well. The return on shareholder equity in 2005 for Chevron was 22.5%, BP, 22.0%: Exxon-Mobil, 30.5%. Projections for 2006 indicate another good year for oil companies. That suggests that the profit motive combined with hurricanes and political unrest in the oil producing countries explains high gasoline prices at the pump.

At $3.00 a gallon for gasoline, a round trip from Cedar Key to Chiefland takes $6.00 to $10.00 worth of gas. Round trips from Gainesville to Cedar Key for a seafood dinner require about $14.00 for gas. Even if the hurricanes miss Cedar Key (and they usually do) we feel them at the gas pump.

The good news is that tax payers won't have to bail out the oil companies from bankruptcy. The bad news is that one needs to save $6.00 to justify a trip to the Chiefland WalMart. The recommendation of Cedar Key News is a careful look at the EPA estimate of gas mileage on the sticker next to the price tag when buying a new vehicle.

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