Gasoline prices have fallen nearly 40 cents a gallon from their record highs after 34 straight days of declines, according to a daily survey released Wednesday.

The price of regular gasoline fell to $3.717 a gallon from $3.73 a day earlier, according to a survey of gas station credit card swipes from AAA and the Oil Price Information Service.

Gas prices have fallen more than 9 percent since hitting a high of $4.114 a gallon on July 16. The drop mirrors a 22 percent decline in crude price futures from their record high of $147.27 a barrel.

But don’t break out the champagne so quickly….

Goldman Sachs reiterated on Wednesday its year-end price forecast of $149 a barrel for U.S. crude oil, and said strong fundamentals were a more important factor than a strengthening dollar.

The restatement came in a research note dated Aug. 19 but sent out on Wednesday.

The U.S. investment bank is one of the most influential financial players in commodities markets.

With regular unleaded gas prices hovering around $4 per gallon, it’s understandable that drivers accustomed to filling their gas tanks with

premium would be looking for ways to ease the pain at the pump.

Some relief may be as close as their next fill-up. Switching from premium-grade to regular unleaded can save several dollars on each tankful,

given an average price difference of about 30 cents a gallon, according to end-of-July figures compiled by AAA.

While using gasoline that carried a lower octane rating than the engine required was once a sure path to disaster, that is no longer the case.

Nearly all automobiles sold in the United States since the 1990s will happily run on regular-grade 87-octane gasoline without causing engine

damage, a benefit of the electronic controls that now manage all engine functions.

The octane number posted on the pump is a measure of a gasoline blend’s resistance to a condition called knocking. The knocking sound — a

rattling noise made by an engine under load, familiar to drivers of older cars — is a result of out-of-control combustion, the mixture of air and

fuel burning erratically. The explosion rings the metal of the engine block like a bell.

The higher the octane rating, the more temperature and pressure the gasoline can withstand before it ignites on its own, rather than when it is

set off by the spark plug. An engine that calls for premium gas typically has a higher compression ratio — it squeezes the air and fuel mixture

to higher pressures — which can improve both fuel economy and power output. But such an engine requires the higher octane rating to run properly.

Before the switch to fuel injection and computerized controls, engines were subject to damage from prolonged knocking. But today’s engine

management systems incorporate electronic knock sensors, which detect the condition and adjust the ignition to stop the problem. As a result, it

is almost impossible to hurt a current engine by using 87-octane fuel, industry experts say.

Modern engines prevent the damage from happening before it starts. It wouldn’t impact fuel economy and it wouldn’t impact the emissions. What it

would impact is the performance.

Of course, owners who do not heed the automakers’ recommendations may face consequences — the potential voiding of warranties, for instance. But

for the most part, manufacturers’ fuel recommendations include some wiggle room.

Porsche, for example, acknowledges that any of its modern production cars can be run on regular fuel without the risk of damage.

Specifying premium fuel lets a car manufacturer squeeze out more horsepower. BMW, for example, recommends that all the cars it sells in the

United States use premium fuel, but they will run on regular.

“There generally isn’t any harm done to the engine by using lower-octane fuel,” said a BMW spokesman, Thomas Plucinsky. “Because our engines do

have very good forms of knock sensing and are able to deal with lower-octane fuels, you will not have any drivability issues. You will, however,

lose some of the performance.”

How much of a loss? Some indication can be found in the peak horsepower numbers Hyundai recently released for its new Genesis sedan. On premium,

the 4.6-liter V-8 engine is rated at 375 horsepower. On 87-octane regular, it is 368.

That seven-horsepower difference — less than 2 percent — seems a small penalty for saving 30 cents a gallon, especially when you can regain that

performance simply by filling up with premium.

Does using lower-octane fuel reduce mileage or increase emissions, as some drivers believe? Not according to the Environmental Protection Agency.

“E.P.A. fuels engineers say that there isn’t a meaningful difference between regular and premium gasoline.

Still, the warning from some automakers can give an owner pause at the pump. The manual for the Smart Fortwo repeats the warning issued for other

vehicles sold by Mercedes-Benz: “To maintain the engine’s durability and performance, premium unleaded gasoline must be used.”

The bottom line is, you could use regular gas and there will be no damage to your car.
 

As the nation struggles with the high price of gasoline, a majority of Americans think offshore drilling for oil is a good idea, according to according to a CNN/Opinion Research Corporation poll. The poll, which surveyed more than 500 adults by phone in July, found that 69% of respondents support the idea of offshore drilling, while 30% opposed it. In June, 73% were in favor of offshore drilling.

But the poll also found that Americans are divided over whether or not offshore drilling will have an immediate impact on high gas prices.

When asked if increased offshore drilling would reduce gas prices in the next year, only 51% of a separate sampling of 500 Americans believed it would, while 49% did not.

The debate over offshore drilling has become an increasingly important political issue in the era of $4 a gallon gas.

Efforts to remove the ban on drilling for oil off coastal portions of the U.S. are built on a fundamental distortion of fact - the claim that more drilling would significantly reduce gas prices is not true. The truth is that oil prices are set by an international market dominated by a cartel.  

The Bush administration’s own Department of Energy states in its published reports that drilling off our coasts would have no significant impact on gasoline prices - not in the short term, not in the long term, not ever.

Supporters of offshore drilling, including President Bush, say it will help the country break its dependence on foreign imports and shield the U.S. economy from volatility in the global oil market.

The bans prohibiting offshore drilling, which were put in place decades ago, are outdated and should be lifted, proponents say.

But opponents argue that more drilling offshore could damage sensitive ecosystems.

In some cases, like in Florida where some offshore infrastructure already exists, installations could be brought online in 2 to 3 years. In most cases, however, it would take up to 15 years to access offshore oil, depending on how far the source is from shore and how deep below the surface it is.

So the question I beg to ask is, does it make sense to drill offshore of the U.S. coast?

Gas prices have fallen sharply in the last two weeks, just below $4 a gallon, in line with retreating crude oil markets. The average retail price for self-serve, regular unleaded gasoline fell to US$3.958, down nearly 12 cents in the past two weeks.

U.S. crude oil futures ended down on Friday, hitting a seven week low, due in part to a report saying that OPEC’s oil output is expected to rise by 200,000 barrels a day in July from June because of higher supplies from Saudi Arabia and Iraq.

Oil has doubled in price over the past year, stoking inflation and compounding the financial pain of consumers, already grappling with a depressed housing market, job uncertainty and soaring food costs.

During the dramatic price increases in recent months, refiners and retailers shouldered margin losses rather than pass the higher cost of crude to motorists. They will try to hang on to recent margin gains, but softer U.S. gasoline demand makes that very difficult.

Rising prices at the gas pump appear to be having at least one positive effect: Traffic deaths around the country are plummeting, just as they did during the Arab oil embargo three decades ago.Researchers with the National Safety Council report a 9 percent drop in motor vehicle deaths overall through May compared with the first five months of last year, including a drop of 18 percent in March and 14 percent in April.

Preliminary figures obtained show that some states have reported declines of 20 percent or more. Thirty-one states have seen declines of at least 10 percent, and eight states have reported an increase. No one can say definitively why road fatalities are falling, but it is happening as Americans cut back sharply on driving because of record-high gas prices. The federal government reported that miles traveled fell 1.8 percent in April compared with a year earlier, continuing a trend that began in November.

The last time road deaths fell this fast and this sharply was during the Arab oil embargo in 1973-1974, when fatalities tumbled 17 percent.

I realize that trying to explain economics to a large portion of the American public is similar to trying to explain quantum physics to a gerbil, so this is aimed more at those still capable of rational thought. You can blame the high gas prices on any number of causes but it really boils down to supply and demand and fuel market speculators’ perception of what the future holds. So the question arises of what to do about it and if it makes sense, both economically and environmentally to start drilling offshore and in Alaska.

After President Bush’s largely symbolic decision to lift an 18-year-old executive moratorium on drilling for oil and natural gas along the outer continental shelf, the real question is how Congress will respond.

Bush’s decision, which he called a reaction to high fuel prices and security concerns over foreign oil, leaves Congress as the primary barrier to broader domestic exploration. Since 1982, a congressional moratorium, renewed each year as part of the funding bill for the Interior Department, has restricted oil drilling off the Atlantic and Pacific coasts and in parts of the Gulf of Mexico.

Record gas prices have prompted many conservative lawmakers to embrace offshore oil drilling, arguing that even the prospect of greater production will help lower fuel costs and promote energy security. Some lawmakers have scoffed at such explanations, pointing to recent Department of Energy studies showing that drilling in the outer continental shelf will have an “insignificant” impact on costs in the next two decades.

But even before the president’s move, at least two recent developments suggest that Congress may be warming up to the idea. In both cases, lawmakers have quietly chipped away at the congressional moratorium. In December 2006, Congress passed the Gulf of Mexico Energy Security Act. Among other provisions, it made some 5.8 million acres in the central Gulf of Mexico available for oil leasing (pending environmental reviews) that had been previously included in the moratorium. In the Senate, where the measure originated, support was overwhelming. The bill passed, 71 to 25.

A similar case involves the North Aleutian Basin in Alaska. From 1990 to 2003, Congress annually voted to prohibit oil and natural gas drilling in the region. But in 2004, it ended the moratorium, and in 2006, the state’s governor, with local support, asked Bush to remove the region from the executive moratorium. Bush happily obliged. Now the area is subject to environmental reviews and public comment before leases are sold to allow exploration.

The idea of increased drilling is popular in the polls. But resistance to the idea remains strong, particularly in light of unanswered questions about the purported benefits of renewed drilling.

Gas Prices – Kool-Aid Anyone?

Like most Americans who watch the news, it appears that most of us have drank the Kool-Aid we have been served without asking any questions. I think it’s time for a gas price reality check. How much does it matter that gas is $1 higher than it was last year? I think we should look at how this increase will dig into an average driver’s pocket. It’s time to take a deep breath and put some things in perspective. With the media constantly reminding us on a daily basis that gas prices continue to rise, most Americans just jump aboard the wagon and take it for a ride. The biggest problem is that there is no destination in site.

The price of a gallon of gas has increased fairly consistently between 2002 and 2007. Last year at this time, most people weren’t as worked up about high gas prices as they are today. It has only been between 2007 and 2008 that the change in the price of a gallon of gas has become a truly hot topic, as the approximately $1 per gallon increase over this time last year has gotten consumers worked up and especially excited.

Are people getting way too worked up about gas prices?

With crude oil at $140.53 per barrel this afternoon, almost every personal finance article I’ve read has talked about how you can conserve gas usage or save money on gas prices. Granted, its fun to jump on the bandwagon with whatever today’s “hot topics” are. But when you really break down your gas spending each month, it’s not really as big of a deal as everyone is making it out to be.

Or is it? If you haven’t yet done the math for yourself, you really have no business getting all worked up into an incoherent frenzy now, do you?

And that’s where I come in! After I’m done with you, you can walk away from your computer screen secure in the knowledge that you’re either completely justified in your foaming-at-the-mouth rants against all things oil-related or that you maybe ought to put a sock in it. It really doesn’t matter to me either way because I’ll be entertained either way.

So, let’s get right to it

For arguments sake, let’s assume your car gets 20 MPG and you drive 12,000 miles per year. Here is the breakdown in extra expenses, $1.76 per day, $12.38 a week, $53.65 a month, or $600 a year. Okay, I can hear you saying “WOW, that’s $600 per year”. Let’s look at a few ways you can probably save $600 per year.

1. Stop eating out so much. Cook at home instead (it’s probably healthier too)

2. Buy in bulk. There are certain items you KNOW you’re going to need in the future (toilet paper, soap, etc). Why not save money by buying in bulk (And save an extra trip to the store while you’re at it).

3. Stop impulse buying. I guarantee for most of us, impulse buys amount to a lot more than $54 a month.

4. Go to GasBankUSA and sign up for the Newsletter so you can stay informed on what’s happening with gas prices and to be notified when GasBankUSA launches so you can lock in a fixed price for gasoline or diesel and save. (I had to throw this in because it makes sense.)

OK, let’s finish this already.

My point, and I do have one, is that if the change in what you pay for gas from last year to this year is what you’re really upset about, you have a lot of different ways in which you can adjust other factors you can control without seriously denting your lifestyle. You too can get savings from other places to offset higher gas prices, so they don’t affect you more today than they did a year ago.

A new poll shows that nearly one-third of Americans are adjusting their Fourth of July weekend plans because of sky-high gas prices.

According to a CNN/Opinion Research poll, 31 percent of Americans have canceled or shortened their planned holiday weekend vacation because of the recent increases in gas prices.

Of the more than 1,000 Americans surveyed from June 26 to 29, 72 percent said record gas prices have caused them to make changes in their daily lives, and 30 percent said those changes were major ones.

For those who earned more than $50,000 a year, 21 percent said they had made major changes to their daily lives and 48 percent said they had made minor changes.

The average price of a gallon of gas rose to another all-time high, above $4.09 a gallon today. Gas prices are now about 3 percent higher than last month and 38.5 percent higher than a year ago.

THE GAS PRICE REDUCTION ACT OF 2008
 Summary of Provisions
 TITLE I – DEEP SEA EXPLORATION (OCS)
 14 Billion Barrels On Atlantic and Pacific OCS – More Than All US Imports From Persian Gulf Countries Over The Last 15 Years
 * State Option Nationwide (except Gulf of Mexico)
 * Governor petitions to allow exploration, with concurrence of state legislature
 * Exploration must be at least 50 miles from coast
 * 50% of revenues to Federal Treasury, 37.5% to States, 12.5% to Land & Water Conservation Fund
 
 TITLE II: WESTERN STATE OIL SHALE EXPLORATION
 
 More Than 3 Times The Oil Reserves Of Saudi Arabia
 * 800 billion - 2 trillion potentially recoverable barrels in Colorado, Utah, Wyoming
 * Democrat Congress put moratorium on final regulations for development of this resource
 * Republican proposal would repeal the moratorium and allow exploration to move forward
 
 TITLE III: PLUG-IN ELECTRIC CARS AND TRUCKS
 
 * We need better batteries to maximize electricity range & use less gas
 * Increased R&D for advanced batteries
 * Direct Loans for advanced battery manufacturing facilities
 * Sense of Senate that the Federal Government should increase its purchases of these vehicles
 
 TITLE IV: STRENGTHENING U.S. FUTURES MARKETS
 
 * Authorizes increased funding/staff for Commodity Futures Trading Commission (CFTC)
 * Directs the President’s Working Group on Financial Markets to study the international regulation of commodities markets
 * Codifies CFTC action on position limits and transparency for foreign boards of trade
 * Requires the CFTC to gather information on index traders and swap dealers