High Gas Prices and Alternatives

In our daily lives, there are variegated issues that generate quest in us and make us curious to get knowledge and information about these issues in order to get an in depth understanding of that issue. One such issue that is bugging me is of continuous escalation in the gas prices. In past few years, the price of the gas has reached the sky. The main question that arises in mind is related to the reasons that are causing this rapid and frequent increase. In order to find out the answer of this question, I started my journey of search on the road of the internet and newspapers. I even approached the owner of a gas station near my residence for a productive debate with him and made an attempt to gauge response from the industry. This paper discusses findings related to this intricate issue.

I started my search by tracing the prices of gas in the past ten years. From the research, I found out that in 2001, the gas price was around $2, and it has increased up to $4 in the year 2008 (“IEA”).

Currently the price of the gas is fluctuating and, this is the critical issue for many oil companies as well as for consumers. The inquiry of consumers is obvious related to the reason behind this fluctuation in the price of gas. The phenomenon of demand and supply causes great impact on the price of gas. Gas prices increases when there is more demand than the supply and less investment in the field of development. According to Mouawad, “The demand of oil imports will be quadruple by China and India by the year 2030”. This is a huge increase in the demand which in turn would increase the price (Mouawad, pp. 13).

In United States of America, this concept of demand and supply is also the basic reason for the increase in gas price. According to CIA, America is the largest producer of the gas. Moreover, prove has also been revealed related to mammoth amount of gas reserve in America (Mouawad, pp. 13).

Despite this favorable condition, the government of United States spends a huge amount in producing and discovering alternative energy and in the import of the oil. The vital reason behind is a huge demand. Demand for oil and gas is increasing continuously in United States of America. The oil demand increases on average of 1.7% every year. However, in 2003-2004 the oil demand went to 3.4% (“Rational Engineers”). Where rest of the world consumes oil in electricity generation, United States spends two third of oil in transportation (World watch institute, pp. 144).

The resource of oil and gas is spent on four important sectors of transportation, industrial, commercial and residential. According to research the resource is most spent on the transportation sector. The demand in this sector is frequently increasing. This is mainly because of increased usage of personal vehicles. The Hirsch report presents the fact that in 2006, 68.9% of oil and ...