Thursday, December 25, 2014

Gasoline prices drop

Based on a price of about $4.00 per gallon of gasoline, I ran some calculations to compare the cost-per-mile of driving an electric car versus the cost of a gasoline powered car.  The result was that it costs roughly 3.6 cents-per-mail to drive my electric car and about 19 cents to drive the same mile in a gasoline powered car.  That made my savings after driving 10,000 miles about $1,540.  This assumes an average price for fuel of about $4.00 per year.  In California, the last few years have seen prices fluctuate between $3.40 in the winter and $4.60 in the summer, so the $4.00 makes a reasonable (and convenient) average. 

What happens when the price of fuel drops substantially lower in the winter months?  Some recent oil-market manipulations have dropped the price of gasoline to about $2.55 per gallon.  Assuming that the summer price swings by a similar amount to $3.75 per gallon, the average price over the year might be $3.15.  How does this substantially lower price affect the per-mile cost of gasoline-powered travel?  Using the assumptions that I listed in my earlier post titled “Only 3 cents a mile”, the new cost-per-mile is 15.5 cents, or about 3.5 cents less per mile.  So, the money I would have saved during this abnormal year of relatively low fuel prices will drop by about $350.  Does this mean I lost this money?  No … my own costs are determined by the cost of my electricity (which was $0 last year, thanks to the sun).  It means that had I not bought my electric car, I would have been paying less per mile this year to drive a gasoline powered car (which lowers my hypothetical “savings”).

My biggest concern here is that the lower price of gasoline will motivate more people to purchase bigger, heavier, gasoline-powered cars, trucks, and SUV’s.  These larger vehicles require more power to move them, which demands a larger engine.  And, to compete in the race for ever more horsepower and faster acceleration, these bigger vehicles need even larger engines to be able to keep up.  All of this generally means that more people driving these vehicles will burn more gasoline needlessly, without much concern for how the emissions from these larger engines impact our planet.  High gasoline prices were actually helping to slow the rise in emissions by motivating people to favor better fuel economy when it came time to buy a car.

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