Still hovering at $3.23 a gallon here in San Diego, and I expect $4 this summer. I expect I'll commute with my scooter at least three days a week then.

This is all fault of Senator Ed Markey for getting the law to change the DST.

I can't get too excited about this. The economy and employment are better than 2004. We have more people and vehicles. And prices are lower than recent peaks.

Low prices for SUVs and muscle cars don't always indicate foolish buyers. They nearly always indicate foolish manufacturers won't make any money and will change their offerings.

The time for concern is when manufacturers stop introducing hybrids or other economy offerings. And right now more reach the American market each month.

Same for housing. Most areas are at best stagnant. Some are declining. That is good. When prices are rising twenty percent a year, worry.

Is it safe to say ethanol(E10/85)consumption was also a record? If so, it masks a problem that is worse than these stats show.

Gas prices of $3-$3.50/gal may slow demand growth, but they are not reversing it.

It may take a combination of slowly raising fuel taxes to European levels of $6-$7/gal and disbursing the proceeds equally among taxpayers (10 year ramp-up), improved vehicle fleet fuel economy (10 year ramp-up) and, higher-density urban architecture (30 years) to achieve that. The timescales the EIA is looking at are essentially meaningless.

Simply put, for-profit suppliers in a mature industry can only respond to changes in consumer demand, which itself only changes in response to changes in market externalities. Forcing suppliers to produce something no-one really wants (e.g. by tightening CAFE) won't achieve the desired - and necessary - effect. Policy needs to focus on patterns of demand; supply will adapt accordingly, with some delay.

We will curb gasoline consumption where we treat it as the utility it is, just like we treat water and electricity. We have a price structure where the more you use, the more it costs per additional unit of consumption.

This solution would not increase the "social inequity" so well described above, and it would encourage investing in hybrids to avoid paying the additional cost of gluttony.

All that is needed is to issue "gas cards" to authorize the purchase of fuel. When the card is "read" the screen would display the amount of fuel used in the last 30 days, and if the amount was less than 60 gallons (average consumption) the cost per gallon would be the market price. However, if and when the consumption exceeded 60 gallons in the last 30 days for the card holder, the price would include a 25% surcharge. For example, say the market price is $2.00 per gallon, once you hit 60 gallons the price per gallon then becomes $2.50.

This would make people aware of their consumption and get them thinking of how to avoid the surcharge. Voila, conservation.

we will not tax gas any more, we just saw the uber liber Cali reject the assinine production tax increase.
Fortunately their are some folks out there than understand economics.

The government isn't going to raise taxes. Here in New York they even lowered the gas tax last time the price went up. Price shocks will likely be inevitable. It will take a long time for Americans to give up their addition to gas.

Lets not equate establishing a pricing structure designed to encourage conservation with the central command and control communism of Cuba. The water and electricity rate structures exist everywhere in the USA.
So labeling the plan as communistic seems designed to avoid the reality that gasoline is a limited resource which should be conserved.

Next, we have the argument that establishing a pricing structure equates with an across the board tax increase. No it does not. We have tried the across the board approach and it has failed, people with money still buy SUV's because they do not have to face a gas guzzerler tax when they fill up. Totally different approach. And it does not punish those who are conserving due either to economic issues or environmental issues.

They can't just go out and buy a more fuel efficient car? Who told them to buy a car with garbage fuel mileage in the first place. I purchased my current car (with excellent fuel economy figures) in 1999 when I was paying about $1 per gallon. They dug their own grave...they can dig themselves out.

Van,

I won't say that a graduated pricing structure is "communist." Heck, we even use it for our income tax, and call it "progressive."

The problem is this. It's much easier to implement such a rate structure in a classic utility situation. Your house has one water main, one electric hookup, one gas line, etc. The company serving each utility has to tally your total monthly usage if they are to bill you at all. Since they already have those figures, they can impose any rate structure they want, so long as the state utility commission approves. Hence they can easily charge graduated rates.

Gasoline, however, can be purchased at any station in town -- and there are many companies with many stations. You can pay cash, credit or debit. To establish a graduated rate structure, you'd need to tally a person's consumption across all sales outlets. Hence, to call a space a spade, your ration card ("gas card").

But nobody likes ration cards. The look and feel too much like communist Cuba, or the bad old days of World War II. They're a pain in the rear to both consumers and the issuing authority. Let's say it will cost a dollar a year, per card, to issue, monitor, and implement a gas card system. Across 300,000,000 Americans, that's $300,000,000 dollars per year we could have spent on something else.

Ration cards also promote the establishment of black markets. For instance, an urban-dwelling New Yorker (who never drives anyway) might try to sell his right to 60 cheaper gallons a month to a New Jersey suburbanite, who drives and Hummer and guzzles gas. If gas over 60 gallons per month costs $0.50 more per gallon than gas under the limit, they'd find a way to split the difference. Should we allow that? Even if we did, should be be happy that people are wasting their time putting these trades together?

Why bother thinking about, policing, or running this business in the first place? Is all the effort worth it? Or are their easier and more publicly palatable ways to encourage conservation?

Rafael Seidl is right. Bump up the gas tax and cut the income tax rates, starting with the lowest income bracket, leaving you revenue neutral. Making your cuts starting with the lowest bracket will protect low-earners from the regressive nature of the higher gas tax. In the end, someone who drives the same gas guzzler is no worse off than before. But someone who makes the switch to a more efficient lifestyle has much more to gain, which will probably lead to more people making the switch. And since we already collect gas and income taxes at certain rates already, the marginal administrative cost of tweaking those rates to achieve this result is virtually nil.

The standard economic model says that as the price goes up the demand should go down. However, people need to drive to work to make the money to buy the fuel. So much for that model.

Folks, the issue is not only buying a more fuel efficient car, it is also driving it less by combining trips, such as stopping on the way home to pick up whatever, rather than making two trips. We may not be able to carpool to work, but we sure can car pool for lots of weekly errands.