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June 27, 2008

Who is to blame for high gas prices? Motorists know.

Gas_pricessurvey_2 Motorists have been feeling the pain at the pump, and it is impacting their lifestyles and shaping future car buying habits, according to the latest Auto Pulse survey conducted by the Consumer Reports National Research Center. And 99 percent have strong feelings about who is to blame. Respondents mostly pointed fingers at the federal government.

With fuel prices and the upcoming presidential election dominating headlines, we thought it would be interesting to see how these issues intersect. To check America’s pulse, we conducted a random, nationwide telephone survey from June 5-8, 2008 of adults aged 18 years or older who drive and whose household owns at least one vehicle. For the full story, read "Gas prices survey shows pain at the pump hurts at home." Here, we will focus on who motorists blame for the elevated gas prices and what recommendations they have for turning around this trend.

Blame game
During a period of record profits for many oil companies, it is no surprise these industrial giants were one of the leading targets, blamed by three-quarters (75 percent) of consumers. But more pointed a finger at lawmakers in Washington, singling out the failure of government to implement an effective national energy policy.

Who do you blame for higher gas prices?

  • 77% Government’s failure to implement an effective energy policy
  • 75 Oil companies
  • 70 Foreign-oil producers
  • 68 Congress
  • 68 Middle East conflict
  • 64 Bush administration
  • 64 Rising demand from developing nations
  • 62 Restrictions on increasing refinery capacity
  • 61 Restrictions on domestic oil exploration
  • Notably, natural disasters (26 percent) and gas stations (21 percent) ranked much lower.

    How to fix it
    While survey respondents were quick to assign blame, they were equally responsive in providing solutions. In fact, there was strong consensus on many possible actions that could be taken by the federal government to reduce fuel costs.

    Motorists agreed that the government should:

  • 90% Increase support for alternative energy development
  • 84 Negotiate lower prices with oil-exporting nations
  • 83 Encourage conservation through tax incentives, alternative transportation
  • 81 Allow more drilling in the U.S. and offshore
  • 79 Encourage the construction of more refineries
  • 69 Impose price controls on gasoline
  • Where do you stand on both blame and possible solutions? Post your comments below.

    Jeff Bartlett

    Join the discussion in the Cars forums to share how gas prices have impacted your lifestyle and what adjustments you are making to compensate.

    Learn how to save at the pump by visiting Consumer Reports’ guide to driving green. Check the latest national average gasoline prices.

    Comments

    Noticeably missing is the individual responsibility of buying a gas guzzler that isn't necessary for your requirements. Such a missing item invalidates the worth of your survey, making it more suitable for the "feel good gang" south of you in the Big Apple. Stop insulting the education and intelligence of the American Public.

    I think one question is why can we drive into Mexico and purchase gasoline from any Pemex station (or diesel fuel) for half of what we pay in the United States today? Thousands are doing it.
    I can remember even many years ago when living closer to the border we'd see American tanker trucks delivering gasoline to the Pemex stations where we were then too paying much less than in the United States.
    Congress originally back in the seventies passes mandatory fuel usage for cars sold in the United States. In came all of those (excellent) cars with four cylinder engines. American companies settled on six cylinder cars (mostly) and produced some really lousy four cylinder engines just to meet the "average fuel consumption" mandate.
    Oil companies historically made their profit on oil and grease, not gasoline! The four cylinder and six cylinder cars use less oil and when was the last time you took your car in for an oil change and grease job. Then recommended oil changes increased and are not at 7,500 miles.
    This caused oil companies to shut down, dismantle and sell the land where many oil refineries were. (1970s) We now have too few refineries to produce the product that a country of three hundred million people demand. If we doubled the crude availability the present refineries couldn't process any more than they are right now.
    Any new refinery would cost ten billion dollars and take five years to build. It takes a few years for a new refinery to be on "test". Would you invest in a new refinery with all of this "alternative" fuel research taking place.
    Maybe our best solution is coal oil! We have the largest coal reserves in the world. Diesel engines will run on coal oil and jet planes can use it too. One Air Force bomber has one engine running on coal oil and is doing fine!

    We have had the chance to travel outside the US extensively for the past 25 + years.

    In no other place is it "assumed" that private individuals must have a truck or anything like a SUV ! These are strictly bought whenever there's the legitimate, commercial need and usage.

    Neither is it assumed that every household is entitled to multiple vehicles!

    Lastly, NO country has every teen still in high school with a vehicle or those same schools with massive parking lots filled with these!

    The U.S. had their "warning" during the Arab Oil Embargo in '74, whenever no fuel sales from dark Sat thru daylight Mon, 10 gallons max, 55 mph, the tremendous surge of
    " those little cars ", etc.. all were experienced!

    But, instead of leaving what was then left of our WW II railroad system intact, we continued to sell the wood ties for flower beds, eliminate the right-of-ways and go right on with blinders on, full speed ahead within a very few years.

    Everywhere else made the painful choices of putting prohibitive taxing upon fuels & kept them in place !
    The 48 states has been the sole location wherein all expected fuel to be forever cheaper than water!

    Like it or not, the the buying public must change permanently - not going in "fits & starts" from very bad economy cars then to V-10 , 4WD monsters & finally, back again!

    The rest of the world is drilling and refining because of their increased energy needs. They are not focused on alternative energy sources, which are not without negative impacts on their own. In fact, what alternative is there for diesel fueled trucks to move commerce?
    The environmental lobby and Congress have not allowed new domestic drilling or new refineries for 30 years now. The Democrat party has had the majority in Congress for 85% of those years. That was 100% until the mid 1990's, and by that time, Democrats had allowed the environmental lobbyists to completely neuter the American petroleum industry.
    Americans can drill, and refine safer, and more efficiently than any other country on earth. Since these other countries cannot pump and refine as safe and efficiently as Americans can, the price increases, and the environmental impact is increased.

    I agree with Bob. Everyone seems to blame production but that is only half of the equation that equals $5 a gallon gas. Along with supply there is also demand. The US demands too much gas which increases cost. If everyone simply uses less (ride a bike a few days a week, live closer to work, dont buy SUV's) then their costs will go down exponentially as they use less and prices fall due to decreased demand. Building more refineries is a very shortsighted, short term solution.

    When you stop to really think about the chain of events. First Bush was elected into office, second was the 9/11 attack, followed by the crash of the stock market.Then shortly after that fuel prices started to climb.
    My feelings on all of this is that Bush lifted all restrictions on the Oil industry which Clinton put in place, and things took off from there.
    If Bush would have left those restrictions in place, fuel prices wouldn't have gotten so out of control. The Oil Industries are using every catastrophy that comes along as an EXCUSE to push fuel costs higher and higher. It's a "get richer" type of scam is all it amounts to.
    There is also a pattern to this...when the Republicans are in Office, the cost of living rises. When the Democrats are in Office, the cost of living lowers, or at least levels off.

    The so called "alternative" sources of energy will never account to more than 20% of the total energy needs of the US/World.

    Energy policies that will help reduce the cost of gas?

    Build more nuclear reactors.

    Open new areas in the US to oil exploration (increase drilling).

    Increase refining capacity.

    Eliminate the mandatory gas additive regulations (to increase effective refining capacity).

    Once nuclear power supplies over 70% of the US energy needs, move/push electric car technology into the market.

    All the military vehicles and Choppers in Iraq and Afganistan do not run on water, all of us are paying for Bushe's folly.

    Besides, who needs trucks and suv's. The heavy gas consumption has finally come to a point where we are all paying for it. We have as yet to see the price spiral in food, clothing etc, it will surely come. just can not see any relief in gas prices they may be here to stay and rise higher still.

    Don't talk to me about any comprehensive energy plan from the government until the Federal Government forces each state to raise the minimum driving age to 18, at least. There is no reason in the world that 99% of 16 or 17 year olds need to drive a car.

    Who do we think that the Opec ministers want as the next President of the U.S.? Its an obvious answer. And they are doing their part by tightening the spigot and reducing supplies of oil in a "hot" market. Why? Because they know that the fickle, shallow American voter will have a knee-jerk reaction and blame George Bush and the Republicans. This is Opec's contribution to the Obama campaign.

    And what do you think will happen on 1/21/09? President Obama will pick up the phone, call the Opec ministers and demand more production. And, of course, they'll feign a fearful reaction and promptly comply. And the price will come down. And they'll have a man solidly in the White House who'll be much more easy to deal with and one who'll be less likely to give Israel what it wants.

    Whats amazing to me is how the average U.S. voter has a veil (or burka) over their eyes and can't see the obvious. Darvin Dowdy

    CR: I'm very curious to know if "Noticeably missing is the individual responsibility of buying a gas guzzler that isn't necessary for your requirements. Such a missing item invalidates the worth of your survey..." is true.

    Was that part of the survey or a question similar to it? Were the listed parties being blamed just the top reasons of all of the choices?

    Is it any wonder gas prices are so high under the George W. Bush administration? No one outside of the inner Bush circle and the oil execs knows what went on at Vice President Dick Cheney's secretive meetings with big oil early on in the Bush administration. My suspicion after seeing what has happened to gas prices the past seven years is that big oil said "We want more profits" and Dick Cheney responded "We will make sure you get everything and anything you want. You paid for this administration, it is yours."

    But granted, the Democratically controlled Congress isn't any better as they even scored worse than the Bush administration in the survey of who's to blame.

    So the question now to ask is "who will be a better president to deal with energy problems?" Even though John McCain isn't in bed with big oil, his plans seem to align with George W. Bush's. So-called "free market", hands-off policies. But with a cartel controlling supply of oil and an oligarchy controlling refining, distribution, and sales of gasoline, there is no such thing as a free market in the oil industry. So that just means that big oil would still have a free pass to do whatever they want under John McCain at the cost of American consumers and the American economy.

    You want $7 or $8 a gallon gas, vote McCain. If you want a return to sane energy policies and lower gas prices, vote Obama.

    High fuel is soley a result of greed, manipulation and the fleecing of the millions of herds of sheeple.

    While a young bus driver in Ketchikan, Alaska I met an engineer who worked on the North Slope, he told me they had enough capped wells to last between 500-1000 years of US consumption. Think it odd this has never come out in any news stories. The Oil companies are playing the public as suckers. This information was given to me years ago, way before the current crisis. I ask him this question because I was concerned about my future Alaska retirement, which I now have and live in Alton, MO. Wish someone like 60 minutes would research this information and do a story on this to blow the lid off this hidden information. Glad am retired and do not have to drive very much.

    Your title asserts that drivers know who to blame for higher gas prices. Did you talk to any economists to find out whether it even makes sense to "blame" anyone? What kind of federal energy policy could possibly bring down oil prices now without being a terrible idea (e.g., releasing oil from the SPR would bring prices down a tiny bit, but it would also be a terrible idea)?

    Does Consumer Reports have an economist on staff?

    Also missing from the list of possibilities is "peak oil" -- the controversial idea that the amount of oil we can get out of the ground has peaked and we simply can't get more than we're getting now (and it will only go downhill). I also agree that SUV owners should be blamed but this has remained relatively constant over the years and probably doesn't explain the rapid run-up this year.

    Apparently, despite a growing clarity in the media, the general public remains, for lack of a kinder word, clueless.

    Total available "net oil exports" have been declining for several years. Or to say it shorter, SUPPLY is FALLING.

    At exactly the same time DEMAND (which adds up all consumers) is rising.

    It is the perfect storm, and it will not end. Ever.

    Supply is falling because we are at peak oil, the maximum rate at which oil will EVER be extracted. This is the turning point of our entire industrial civilization, as we switch from a buyers market in energy, to a sellers market. Prices, due to the fundamentals of supply and demand in the market, will continue their relentless rise, which businesses and individuals, big and small, will be left scratching their heads, trying to stay one step ahead of inflation.

    This is peak oil folks. Everything else is a distraction.

    It's supply and demand. We pay less than Europe and more than price subsidizing countries like Mexico and Iran, but regardless, more people, like those in China and India, have joined the gas line. Malthus is right--eventually. As the late Pogo said, "We have met the enemy and he is us."

    I blame several parties , starting with the US Government,especially this administration....secondly the oil companies(how can they be having record profits while the rest of us have to cope with $4.00 at the pump.....and thirdly, we(Americans in general) are a spoiled lot , we have seen this coming for 40 years, but still insisted on bigger , better, and fancier ....now we pay..

    Government no longer plans for the future (if it ever did). Politicians care only about getting reelected, and voters are short-sighted. Problems are addressed only when they become crises. We are discovering that, for oil supply, that is too late, because production lags exploration and development by years.

    Many problems could have been avoided with higher gasoline taxes years ago. That would have caused a shift toward more economical cars, as in Europe and Japan. It would have provided money to fix our roads and bridges. It also would have spurred development of alternative energy and made living far from work less attractive. Of course, higher taxes would have been unpopular with voters.

    Price controls would be a disaster. We already tried them. Who has the time to waste to line up to buy gas on odd or even days?

    Seems most if not all are discounting the fact that the demand worldwide is up while supply has not increased to meet that demand and oil is a commodity. While it's true that the USA cannot increase refining overnight, increased production can dramatically change more quickly, decreasing our reliance on foreign oil. This increase would also decrease the price of oil worldwide. Shortsighted thinking is not what we need for an energy policy. It will take many years for the USA and the world for that matter to get off the petroleum products that drive the economies and power our cars. So goes oil, so goes the economy. Price controls on gasoline or any product is very questionable, and worse is more taxes. You cannot tax people or companies and make your country and people more prosperous. Taxes will only exacerbate the problems. Many feel that taxes and controls are a major contributing factor to the dilemma we're in today with refining capacity and well production. Blaming a president or political party for the cause of terrorist attacks, world wide oil and gas prices, etc. is wrong, and thinking that a different one or party will bring about relief is wrong again. Many have forgotten the inflation, recession, double digit unemployment and interest rates under Carter. Was Carter the single blame, or was it him and the Democratically controlled congress for over 20 years? Perhaps some, but not all of the blame can be contributed to bad politics, and the same goes for when the economy is going well. Like it or not, every country is affected by the world economy, supplies and demands of commodities. Problem is, as many have already stated in one way or another, we're spoiled. We don't mind paying $35,000 or more for a vehicle, but the gas had better be cheap. Just wish I could afford a $35,000 SUV (not that I'd buy one). Has anyone compared the percentage difference of the increase in price of an average car and the price of gasoling since 1975. Gasoline was $0.61, while a Malibu was $3,600. Today, gasoline $4.00, and the car approximately $20,000. Until the recent drastic increases in gasoline prices, most items we buy had far supassed the increase in gasoline. Don't get me wrong, I'd love to be paying less for gasoline. Just think we should be looking at every aspect of our economy, the good and the bad.

    I agree with the poster above...US Consumers are largely to blame for their own misery. THEY are the ones who were suckered into buying the Excursions, the Sequoias, the Hummers, the Denalis.
    And worst of all- Consumer Reports has been giving a "pass" to these energy-hogs for several years now. There was a time in the not-so-distant past where CU advocated restraint, practicality, and being conscious of consumption. When CU started doing road tests
    on 400 HP, $50k+ plus cars, I began to take the reviews and advice less seriously as CU clearly was diverging from what I saw as their original mission...helping the average consumer from getting the shaft.

    I wish our government would quit pointing fingers and actually do something. I HATE election years - nothing gets done!! so I suffer while polititians fall all over themselves to pity me and win a vote. How bout putting some of those plans into action now?!?! Not in a year and half.

    Why can't a normal person win a party nomination for once. Seems like the higher you clime in politics, the more twisted and ludicris your thoughts become. (For example, the Democrat from N. Carolina who critizised the Iraq progress report because they were just "satisfactory" not fully completed. WHAT?!?! How about congradulating them and encouraging them?!?! It's as if they want Iraq to collapse, because then they can say, "I told you so". Sooner the government gets established, the sooner we can send most of the troops home!!)

    No doubt about causes of problem: our life style, Congressional pandering to special interests of all types, increased demand from China and India, inadequate support for research on fossil, nuclear and alternative energy, restrictions on oil/gas exploration and generally lack of astute leadership.

    What to do about it? Politicians should avoid blame game and state emphatically that problem will be attacked from all angles: conservation, much higher fuel efficiency on vehicles, much less restrictions on oil/gas exploration, incentives for alternative energy development (solar, wind, tides), expedite nuclear plant permitting and construction, comprehensive examination of train transportation system, upgrade air traffic control system immediately. Generally, we need to encourage the genius and entrepreneurial acumen of Americans in order to get the job done.


    The one thing NOT to do is regulate gas prices at the pump (or anywhere else in the supply chain, for that matter). If you want to insure scarcity, bring back long gas lines, create a black market, and increase crime, then put a cap on gasoline prices. The only thing worse than expensive gas is the inability to get gasoline at all.

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