Thursday, May 30, 2013

Issue 88 How fuel prices impact costs May 30, 2013


Fuels, we all need it to power our cars, our homes and all of life’s convinces. We would not have electricity to fuel the power in our cell phones without some other source of device to generate that power. When such fuel rises in price though, so does the cost of owning and operating life’s little conveniences.

Gas: Some probably think that if we stopped using oil then all prices would drop. Well that is false; we would in reality be exchanging one form of fuel for another. Ethanol, hydrogen, and even air has a cost. This is all due to supply and demand. More supply with low demand equals cheap fuel and thus cheap goods. High demand and little supply mean everything costing a lot of money. Interestingly enough, buildings require much more fuel than cars and thus produce a lot more pollution thanks to the amount of fuel needed by the power plant to produce electricity. Mind you that this does not always include heating costs. If you need oil or some other form of fuel to heat your home, then you not only pay for what you need, but the cost to deliver that fuel which includes the price to fuel up the truck that brings it to your home. Such costs can be mitigated by new forms of energy harvesting, but those technologies are developing slowly and the only thing that has pushed such designs to the forefront is the public demand for a cheap and renewable alternative to oil.

What if cars stopped using oil: It would be great if we could do that. By eliminating oil and switching to a much lower cost fuel it would potentially save people millions at both the pump to fuel their vehicles and also on store shelves as the cost of the fuel to deliver such items is added onto the price. Not only that, but some of those every day items are made from oil byproducts. This in turn reduces overall costs in manufacturing. But what about that new fuel the car or truck is using? Will it not go up in price as well? Of course it will. Anything bought and sold is affected by supply and demand. As such, vehicles that cannot adapt to new fuels quickly and easily will still remain costly to own and operate in the long run. Cars are probably the costliest and also the sole object that may be holding us back from switching fuels. Cars need specific types of fuel to run, and by putting in the wrong fuel you actually harm the engine leading to greater maintenance issues down the line. If a vehicle however, was able to switch fuels at will based on which ever one was the cheapest that day, it could save lots of money for both producers and consumers as costs will be driven down to the bare minimum to compete.

It is easier for homes: When it comes to powering homes, especially those primarily powered by electricity, it is far easier to switch fuels at the power plant. All the power plant has to do (depending on the plant itself) is to change to the cheapest fuel possible to generate electricity. However, I am only just discussing burnable fuels and not renewable fuels. There are other ways to make burnable fuels cheaper but this is the easiest in terms of reducing overall cost. At this point the problem stems from government regulations that may prohibit the use of different fuels.

Conclusion: Fuels are part of the supply and demand equation as they help to both expand and limit supply. Even if we go rid of fossil fuels and other burnable fuels at power plants, the costs to fuel cars would only have a short term impact. What I feel needs to be done is create a car that uses little to no fuel. They have systems that can make water from burned gasoline and the burned gases still have combustible gases inside them like butane. If they could also use that water to make hydrogen, and also recycle the unburned chemicals it would go along way to reducing fuel prices and chemical emissions from the atmosphere. If you really want to reduce the cost of goods at the supermarket, and other stores you have to have a cheaper fuel to reduce the cost of shipment that inherently increases costs. We need a car that can produce its own fuel, and such vehicles like the air powered come close to that. If we want all things cheap, we need to make the method of delivering our goods to the store cheap and that means fuel.

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