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Larry, Towson: Do you think gas prices will be back under $2 a gallon in
the fall -- and, if so, how much under $2 do you see it dropping?
Mirabella: The price of regular gasoline is expected to average about $1.94 per gallon nationally through September, and peak at about $2.03 per gallon in June because of increased pressure on the spot price of crude oil. Economists believe that with high worldwide demand and little spare productive capacity, there's potential for prices to go as high as an average $2.20 per gallon this summer if crude oil prices stay at current levels. I haven't seen longer-term predictions on prices.
Richard, Monkton: We are many years removed from the gas "crisis" of the 1970s, and yet we don't seem that far away at all in terms of self-sufficiency or our reliance on foreign oil. What will it take to make a difference?
Mirabella: Reducing consumption is one obvious answer, but some experts believe gas prices would need to rise much higher -- to, say, $5 per gallon -- for Americans to change their driving habits or switch to smaller, more fuel-efficient cars. The Bush administration is calling for Congress to pass energy legislation that would offer tax breaks and other incentives to encourage energy production and conservation, as well as development of renewable energy sources. The stalled energy bill, criticized as being tilted toward special-interest groups, would also include a loan guarantee to spur construction of an Alaska-to-the-Midwest natural gas pipeline and authorize nearly $4 billion for anti-pollution technology on coal-fired plants and development of hydrogen-powered cars.
Sen. John Kerry, D-Massachusetts, the presumptive Democratic nominee for president, wants auto makers to be required to boost fuel efficiency on cars and sport-utility vehicles to 36 miles per gallon by 2015, compared with today's current average of 20.8 mpg.
Tim Sharman, Baltimore: I would like to see an article discussing Detroit's ability to react if SUVs suddenly become unpopular. One refinery being taken out by terrorists and gas prices could sky rocket. The wealthy will continue to buy SUVs at most any gas price but not the middle and lower-middle class. It takes Detroit years to bring new products to market. What happens if they have to close shifts at SUV factories or close the factories altogether? How prepared will they be to increase production of desirable higher mileage products? How will this affect their stock performance?
Mirabella: That's a good question, though it is something I'd have to research further. Auto makers are saying that vehicle sales are slowing because of the sluggish economy, high gas prices and a growing array of SUV choices.
Despite all of that, consumer interest in SUVs remains strong. The economists we spoke with think the price of gasoline will have to soar beyond most reasonable expectations before we see any profound effect on consumer demand or any marked change in automobile buying choices. But quite a few experts warn of just such an eventuality, and say the United States is ill-prepared to deal with it.
Fidel R. Dabu Jr., Columbia: What role might E85 and FFVs play in reducing our dependence on foreign oil. E85 is fuel that is 85 percent ethanol and 15 percent gasoline. FFVs are flexible fuel vehicles.
Mirabella: There are any number of viable technologies that proponents believe could, if properly cultivated, eventually augment or even replace petroleum. But none of them are sufficiently developed -- either in technology or infrastructure -- to offer anything more than a long-term possibility. And the people we spoke with say that is unlikely to change as long as foreign and domestic oil stays relatively cheap.
David Hamm, Colora: Why when the price of a barrel of oil goes up I see the jump at the pump within a day, but when the price goes down it's not until the end of summer? The oil companies can't have it both ways.
Mirabella: Pump prices are influenced by more than the price of crude oil. Supply and demand also play a role, particularly in the summer when demand is at its highest.
Denny Conroy, Columbia: Is any of the price increase caused by the decline in the value of the U.S. dollar?
Mirabella: Yes, since OPEC sells oil for dollars, the oil producers have lost revenue as the dollar has continued to weaken. Oil-exporting countries have charged more in dollars to make up for the falling value of U.S. currency.
Steve Bolger, Randallstown: Can you show a chart of the difference in state tax rates? What is the federal tax?
Mirabella: All states collect a federal tax of 18.4 cents per gallon. Maryland's tax, on top of the federal tax, is 23.5 cents per gallon. For a chart showing each state's gas tax, go to www.lmoga.com/taxrates.htm.
Debbie Streeter, Street: Will the price of gasoline ever go down to where it was six months ago?
Mirabella: Don't count on gas prices dropping to levels of six months ago anytime soon.
Michael Gray, Florida: How much oil is estimated in our Alaska oil fields, both tapped and untapped, and why aren't we using those reserves to become less dependent foreign oil? It seems to me that if we can cut a lot of Middle Eastern oil out of our "diet," there would be less leverage for them to hold our economy "hostage."
Mirabella: Alaska produces a quarter of the total U.S. oil production -- about 1.8 million barrels of oil daily -- and has the two largest producing oil fields in the United States. About 30 percent of the total U.S. oil reserves lies under Alaska's surface. But tapping the reserves remains controversial from an environmental standpoint. President Bush wants to increase U.S. energy supplies by opening more federal lands to oil drilling, including Alaska's Arctic National Wildlife Refuge, which could produce enough oil to satisfy U.S. demand for six months to two years.
That's it. Thanks for your questions.
Mirabella: The price of regular gasoline is expected to average about $1.94 per gallon nationally through September, and peak at about $2.03 per gallon in June because of increased pressure on the spot price of crude oil. Economists believe that with high worldwide demand and little spare productive capacity, there's potential for prices to go as high as an average $2.20 per gallon this summer if crude oil prices stay at current levels. I haven't seen longer-term predictions on prices.
Richard, Monkton: We are many years removed from the gas "crisis" of the 1970s, and yet we don't seem that far away at all in terms of self-sufficiency or our reliance on foreign oil. What will it take to make a difference?
Mirabella: Reducing consumption is one obvious answer, but some experts believe gas prices would need to rise much higher -- to, say, $5 per gallon -- for Americans to change their driving habits or switch to smaller, more fuel-efficient cars. The Bush administration is calling for Congress to pass energy legislation that would offer tax breaks and other incentives to encourage energy production and conservation, as well as development of renewable energy sources. The stalled energy bill, criticized as being tilted toward special-interest groups, would also include a loan guarantee to spur construction of an Alaska-to-the-Midwest natural gas pipeline and authorize nearly $4 billion for anti-pollution technology on coal-fired plants and development of hydrogen-powered cars.
Sen. John Kerry, D-Massachusetts, the presumptive Democratic nominee for president, wants auto makers to be required to boost fuel efficiency on cars and sport-utility vehicles to 36 miles per gallon by 2015, compared with today's current average of 20.8 mpg.
Tim Sharman, Baltimore: I would like to see an article discussing Detroit's ability to react if SUVs suddenly become unpopular. One refinery being taken out by terrorists and gas prices could sky rocket. The wealthy will continue to buy SUVs at most any gas price but not the middle and lower-middle class. It takes Detroit years to bring new products to market. What happens if they have to close shifts at SUV factories or close the factories altogether? How prepared will they be to increase production of desirable higher mileage products? How will this affect their stock performance?
Mirabella: That's a good question, though it is something I'd have to research further. Auto makers are saying that vehicle sales are slowing because of the sluggish economy, high gas prices and a growing array of SUV choices.
Despite all of that, consumer interest in SUVs remains strong. The economists we spoke with think the price of gasoline will have to soar beyond most reasonable expectations before we see any profound effect on consumer demand or any marked change in automobile buying choices. But quite a few experts warn of just such an eventuality, and say the United States is ill-prepared to deal with it.
Fidel R. Dabu Jr., Columbia: What role might E85 and FFVs play in reducing our dependence on foreign oil. E85 is fuel that is 85 percent ethanol and 15 percent gasoline. FFVs are flexible fuel vehicles.
Mirabella: There are any number of viable technologies that proponents believe could, if properly cultivated, eventually augment or even replace petroleum. But none of them are sufficiently developed -- either in technology or infrastructure -- to offer anything more than a long-term possibility. And the people we spoke with say that is unlikely to change as long as foreign and domestic oil stays relatively cheap.
David Hamm, Colora: Why when the price of a barrel of oil goes up I see the jump at the pump within a day, but when the price goes down it's not until the end of summer? The oil companies can't have it both ways.
Mirabella: Pump prices are influenced by more than the price of crude oil. Supply and demand also play a role, particularly in the summer when demand is at its highest.
Denny Conroy, Columbia: Is any of the price increase caused by the decline in the value of the U.S. dollar?
Mirabella: Yes, since OPEC sells oil for dollars, the oil producers have lost revenue as the dollar has continued to weaken. Oil-exporting countries have charged more in dollars to make up for the falling value of U.S. currency.
Steve Bolger, Randallstown: Can you show a chart of the difference in state tax rates? What is the federal tax?
Mirabella: All states collect a federal tax of 18.4 cents per gallon. Maryland's tax, on top of the federal tax, is 23.5 cents per gallon. For a chart showing each state's gas tax, go to www.lmoga.com/taxrates.htm.
Debbie Streeter, Street: Will the price of gasoline ever go down to where it was six months ago?
Mirabella: Don't count on gas prices dropping to levels of six months ago anytime soon.
Michael Gray, Florida: How much oil is estimated in our Alaska oil fields, both tapped and untapped, and why aren't we using those reserves to become less dependent foreign oil? It seems to me that if we can cut a lot of Middle Eastern oil out of our "diet," there would be less leverage for them to hold our economy "hostage."
Mirabella: Alaska produces a quarter of the total U.S. oil production -- about 1.8 million barrels of oil daily -- and has the two largest producing oil fields in the United States. About 30 percent of the total U.S. oil reserves lies under Alaska's surface. But tapping the reserves remains controversial from an environmental standpoint. President Bush wants to increase U.S. energy supplies by opening more federal lands to oil drilling, including Alaska's Arctic National Wildlife Refuge, which could produce enough oil to satisfy U.S. demand for six months to two years.
That's it. Thanks for your questions.
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