[hereford]

Does anyone know how close the U.S. may be to some sort of fuel rationing? I can't find any information on this topic, but I'm pretty sure there are plans already in place.

[rwwff]

You've really got two seperate policy paths on this one. Either you allow the price to float to reflect demand, willing buyer, willing seller, etc. Or you go with ration cards. I think it is pretty clear that this particular administration is going with the market approach, allowing the price to rise until demand falls within available supply. So that rules out ration cards till 2008; if the ultimate left wing fantasy occurs and they are able to win the presidency, a substantial majority of the house, and at least 60 senate seats; then a ration card program could be introduced, but I can't see it actually coming into effect before early 2010. So, in the absolutely most agressive case, it is three and a half years away.

There are some on this board that believe within three years things will have gone splat. [I'm not one of them].

I think a more likely result is that we'll stay on the market path and allow the price to float wherever it needs to go. From a political point of view, there is really only one thing worse than really expensive gas, and that is someone being willing to pay but told they can't have any.

[Colorado-Valley]

Make gasoline too expensive for the well-armed cowboys out where I live and the government may have a whole new insurgency on its hands.

The good ol' boys will not take it very well if they can't drive while the well-heeled from Vail and Aspen and Houston come driving around here in their Lincoln Navigators and Land Rovers.

In fact they probably better plan not to drive around here at all!

[rwwff]

Colorado-Valley, lots of folks over the years have suggested insurrection within the borders of the US for various causes; however, it never pans out. I doubt gasoline prices will be any different in this regard.

[Zardoz]

$this->bbcode_second_pass_quote('Colorado-Valley', 'M')ake gasoline too expensive for the well-armed cowboys out where I live and the government may have a whole new insurgency on its hands.

The good ol' boys will not take it very well if they can't drive while the well-heeled from Vail and Aspen and Houston come driving around here in their Lincoln Navigators and Land Rovers.

In fact they probably better plan not to drive around here at all!

[rwwff]

I should note that I don't particularly oppose rationing, I'm just trying in this instance to guess what will happen and when it will happen.

$this->bbcode_second_pass_quote('Zardoz', '
')Oh, it would most definitely "pan out" in this case! Gas rationing will absolutely have to be initiated to maintain order. If it gets short, and goes to eight or ten bucks or something, affluent people tooling around among the gasless masses will be taking their lives in their hands.

Nope, rationing will be required. Bet the house on it.

[EnergyUnlimited]

I think, the possible solution is two-tiered system.
1. Limited amounts of gasoline could be distributed at lower prices to individuals/companies/services via card system.
2. Any excess could still be purchased at "market" price, whatever it means.

Some version of Cuban system in the US.
Funny, but it may become reality.

[Colorado-Valley]

A lot of people out here bet that Bush and the rich people would take care of them. Being betrayed will not go over very well.

If I were a rich Texan, I'd find find a beat-up old Dodge pickup to drive around this valley, and I'd wear some worn levi's and a gimme cap.

Besides, who's going to pay for road and highway maintenance if the middle class can't afford to use their cars?

[dooberheim]

Actually, there is a plan that was drawn up by DOE in 1979-80. Don't know what has become of it, but it does show that the US government has at least considered it in the past.

http://ntl.bts.gov/lib/12000/12200/12232/12232.pdf

DK

[Novus]

Rationing leads to shortages and wasted fuel. Rationing forces massive cut backs on some but not others. Higher prices forces everyone to cut back while forcing the poorest out of the market. I see a lot of poor people driving around when they should be taking the bus.

[vision-master]

I can't see rich Americans suffering in today's corporate world.

$this->bbcode_second_pass_quote('', 'R')ationing leads to shortages and wasted fuel. Rationing forces massive cut backs on some but not others. Higher prices forces everyone to cut back while forcing the poorest out of the market. I see a lot of poor people driving around when they should be taking the bus.

[Zardoz]

$this->bbcode_second_pass_quote('Colorado-Valley', '.')..If I were a rich Texan, I'd find find a beat-up old Dodge pickup to drive around this valley, and I'd wear some worn levi's and a gimme cap.

[Dreamtwister]

$this->bbcode_second_pass_quote('Zardoz', '')$this->bbcode_second_pass_quote('Colorado-Valley', '.')..If I were a rich Texan, I'd find find a beat-up old Dodge pickup to drive around this valley, and I'd wear some worn levi's and a gimme cap.

[pup55]

$this->bbcode_second_pass_quote('', 'D')oes anyone know how close the U.S. may be to some sort of fuel rationing?

[DoctorDoom]

Unless the optimists are correct about future supplies and the ability to switch gracefully to biofuels, some form of rationing on the way down seems inevitable. I don't think the optimists are correct, therefore I think we will see rationing.

Rationing will be forced on whatever political party happens to be in power when lack of supply fails to match demand from status quo activities. At that point the status quo will have to change. Neither US political party is going to welcome the change. I would expect the government to prioritize uses such as agriculture, long-haul freight, mining, construction, city services, and mass transit. Personal vehicles will be lowest priority. It won't matter if you're rich or poor. Well, the rich may buy on the new black market.

The scenario I see goes something like this:

1. World-wide crude supply is maxed out and bumps along a plateau of sorts for several years. (IMO we are there right now.) Demand is growing slowly in the OEDC, rapidly in China and India. It's a world market for crude, so the price is bid up until the market is cleared. This means everyone goes home unhappy, in proportion to their ability to pay the market-clearing price. The US and Europe will likely be willing to pay a lot more than $70 / barrel for what's left. But to maintain their current consumption level and outbid the Chinese and Indians completely, they'd probably have to bid the price waaaay up, like over $100. This quest for the last barrel also means that you pay the higher price on all the other barrels you buy! Example: US is buying 12 mbd at $70 today. Shortfall versus demand from China/India causes price pressure that might take it to $120 if you insist on the same 12 mbd. You pay that on all 12. Or you can take 11 mbd at, say, $100. My belief is that there is some pain point beyond which even the US will walk away from the table grumbling. Not sure where that is but it's clearly a lot higher than where we are now. I think alarum bells will ring psychologically at 100, but the true pain point is likely 150+.

2. Now you are at the pain point dealing with lower crude supplies and therefore lower supplies of refined products. This is the point where the status quo needs to change to lower demand. With the price at, say, $100 / barrel, gasoline is $4.00 or more. This may have been enough to get people to drive a bit less, take mass transit a bit more, buy more fuel-efficient vehicles as the auto fleet turns over. The combination of these things helps balance the books without rationing. This process continues for a while. Each year of a gradual decline, the market-clearing price ratchets up, the players walk away from the auction with a bit more grumbling, and a bit more conservation is needed. During this phase there is increasing talk of alternatives, a lot of buzz about biofuels, perhaps construction starts on CTL plants, etc. IMO you do not get rationing in this period, even as gas goes to as high as $8.00. Oh, people will call for rationing, but eventually they'll get the point: rationing won't make the price go down since the money has to be paid to producers overseas. Instead, you'll see the blame game, investigations of oil company profiteering, calls to lower petrol taxes, etc., etc., in an effort to wring as much as possible out of the end consumer's price

3. This point is reached once conservation measures start to (pardon the pun) run out of gas. It could be reached quickly if the decline is steep instead of gradual. (IMO it will be gradual because heavier oils and tars will be produced to slow the overall decline.) This is the point where price is no longer sufficient to alter behaviour, and WW2-style rationing shows up. Europe and Japan may reach this point more quickly than the US simply beacuse they're already way more efficient in fuel usage at the start. This point is characterised by market fuel prices being so high that they threaten to bring essential activities to a halt. The government can't let food production or the long-distance transport of food fall just because there's an army of consumers willing to pay $10 / gallon to keep feeding their cars. It can't let police and fire services go hungry while people keep flying cross-country. This is the point when rationing will be the only (pardon the pun) rational choice.

[rwwff]

$this->bbcode_second_pass_quote('Colorado-Valley', '
')If I were a rich Texan, I'd find find a beat-up old Dodge pickup to drive around this valley, and I'd wear some worn levi's and a gimme cap.

[vision-master]

25$, that's way too much for jeans!

[rwwff]

$this->bbcode_second_pass_quote('vision-master', '2')5$, that's way too much for jeans!

[FairMaiden]

The thing is - the US has ALOT of room for conservation still. They will continue to rely on the market to set prices accordingly...the idea that the higher prices will force conservation and make alternative fuels more attractive to investment.

I'm from Canada and we are just as bad. I see ppl DRIVING a couple blocks so they can walk on a treadmill. It wouldn't take much for us to drop our consumption levels by alot...sadly, we don't seem to have the will...but I think that will help for a softer landing than doomers want.

[no_name]

FTW- rationing