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High Prices Gas Scientists and specialists in oil and gas industry believe that energy tops the list of problems facing humanity today because it impacts all other major problems, including water, food, environment, poverty war, disease, education, democracy, and population. Energy impacts everything that occurs in modern society. The US was built on the shoulders of reliable and affordable energy. For the past 50 years, oil has been the primary source of energy in the country, and the price of oil is closely tied to economic growth. The four US recessions in the past 35 years were each related in time to an oil price spike. Although for well over a century, the global transition away from solid fuels (wood and coal) to liquid fuels (oil and natural gas liquids) to gas fuels (natural gas and hydrogen) and other energy sources has been quite predictable and will most likely continue, contemporary increases in gas prices will continue to threaten various areas of Americas life.
Recently, tourism became another industry affected to some degree and surely jeopardized with gasoline market prices. NPD Group reported in May, 2004, that 28 percent of American consumers indicate they have purchased less gasoline than usual. In their report "Pain at the Pump: Consumers Reaction to Record High Gasoline Prices NDP Group researchers revealed that in addition simultaneously with cuts imposed on extra money spending on fuel, America consumers say they will reduce spending on clothing, eating in restaurants and various forms of entertainment in order to save money (MALOY, 2004). From the critical standpoint, it is evident fact that the $ 2 -plus consumers are paying for gas is getting to be too much, and will surely result in cutting back on vacations, which in turn will have a ripple effect on the travel and tourism industry. NPD indicated that consumers are making significant changes in their overall spending behavior due to high gasoline prices. 23 percent of studied sample say that they have modified their vacation plans in the past three months, and over 14 percent assert they have canceled a vacation altogether. Simultaneously, 39 percent of American consumers say they will consider modifying their future vacation plans if the gas price trends will remain the same.
According to David Portalatin, NDP Groups analyst, American consumers indeed take serious steps to reduce gas consumption, which constitutes a major change in consumer behavior (MALOY, 2004). However, Portalatin claims that although America witnessed a lot of noise and protest during the first $ 2 -per-gallon spikes, there was no evident decrease in the gasoline demand. The break of symbolic $ 2 price mark has been a logical sign for consumers to act. NDP Group reported that surprisingly, gasoline prices affected not only vacations plans of American consumers, but changed traditional patterns of commuting.
Thus, 20 percent of the sample indicated that they have tried carpooling, telecommuting, or taking public transportation in the past three months. 14 percent of polled citizens told that they would like to buy a more fuel-efficient car in the next year. As Portalatin points out, gasoline takes such an increased share of the wallet that consumer spending suffers in other areas (MALOY, 2004). Logically, such a planned-in-advance event as summer vacation may be directly affected with contemporary consumer spending patterns. Research conducted by NDP Group cannot be considered as notable exception. More recent polls made by other companies are not quite so downcast, but still indicate that the price of gasoline is becoming a real consideration for the American public. The Travel Industry Association and motorists' group AAA released a report forecasting full highways and byways for Memorial Weekend and an overall increase for travel this summer.
The TIA estimates a 3. 2 percent increase in leisure travel for the 2005 summer season, indicating that Americans will take more than 300 million person-trips during summer months of 2005. Traditionally, a person-trip is interpreted as an individuals travel, which extends 50 miles one way. According to TIA vice president Suzanne Cook this summer season will start off with bang and it is expected to stay steady and strong through the summer. However, she asserted that there are some causes for concern, including rising gas prices and higher inflation. Indeed, anyone can feel a general unease among Americans concerning the affordability of travel in the light of 7 per cent increase of travel prices since December 2004. Tourism business representatives stay positive and assert that high gas prices will not spoil their expectations for the strongest starting with traditionally busy Memorial Day.
They refer to 2004 overall increase in vacation by car and by air during summer period, despite gas prices increase. AAA Carolinas registered a record of 800, 000 North Carolinians who attempted their leisure travels in the middle of May (Siceloff, A 1). The optimistic expectations are supported with TIA estimates of 5 percent increase in vacation air travel from June through August. Although the tourism industry remains optimistic, some acknowledge that if gas prices rise much higher, people planning to drive to vacation destinations might drop those plans or take trips much closer to home. Survey USA commissioned by WFLA, News Channel 8, aimed to ask 500 Florida area residents whether the price of gas has caused them to change plans for summer driving vacations. The survey, released last week, found that 32 percent of vacationers had canceled their summer plans because of the price of gas.
An additional 26 percent had changed their plans and would go to a closer destination, but 37 percent said they did not expect to change their plans (DIAMOND, 1). The TIA disputed the survey and noted that the survey did not reflect how gas prices are affecting the tourism industry in Florida or nationwide. According to Dexter Koehl, another representative of the TIA, people might say they are going to cancel their vacation but what we " re finding is as long as gas is available, that they are slightly altering what they do on their trip to save money in other ways. " (DIAMOND, 1). In addition, Koehl noted the average road trip for a summer vacation constitutes 800 miles. He asserted that based on the increased cost of gas in April, such a trip would cost $ 20 more than last year. However, even the trade group's annual summer travel survey, released last week, predicts only a 3. 2 percent increase in leisure travel from last year's summer season.
Some consumer groups say the Survey USA numbers should not be dismissed and might accurately reflect consumer sentiment. Bill Newton, executive director of the Florida Consumer Action Network, a Florida-based group, indicate that high gas prices are causing people to consider canceling summer driving vacations (DIAMOND, 1). He claims that callers to the organization have expressed concern that gas prices might force them to change plans. From the critical point of view on the circumstances in tourism business and those threats oil and gas industry imposes on the former, there are various both short- and long-term solutions.
Indeed, American citizens may refuse from using conventional SUVs, and choose more efficient energy saving vehicles. In addition, hotel owners in Florida may offer different bonuses for tourists coming from the Northern States or special compensation packages for gasoline. Interestingly, if the TIAs data is correct and the additional spending on the coming vacation constitutes only $ 20 more comparing to the year 2004, than perhaps, the main controversy lies in a different perspective. It is evident that spikes in gas prices affect American consumption patterns, which affects not only tourism but the entire US economy. Therefore, it is vitally to implement effective national energy program that will facilitate the solutions for the upcoming crisis. The administration's budgetary focus on long-term energy efficiency and renewable energy ($ 1. 25 billion) and fuel cell and hydrogen technologies (approaching $ 500 million) is forward-looking and laudable (Tinker, 18).
Federal recommendations to support research and technology to investigate efficiency, and also long-term, large-scale, future sources of energy including hydrogen (from methane and other feedstock), nuclear, and solar (large-scale, improved efficiency) that will not otherwise be developed in the private sector are reasonable. Other "renewable" sources such as wind, hydrothermal, biomass, tidal, and the like will provide good supplemental regional sources but are unlikely to provide the scale of energy needed in a modern society. Although heavy investments have been made historically in such renewable energy sources, for more than 4 decades their contribution to US energy consumption has been less than 1 %. Moreover, they are geographically constrained and limited in their use in the transportation sector. Nuclear and hydroelectric power plants combined currently constitute approximately 10 % of US energy consumption, but because of environmental concerns, no new plants or dams have been constructed recently. Consequently, their role as a future energy source is diminishing.
The federal government should support a smooth transition away from solid and liquid fossil fuels over the next 50 years toward other energy sources. A global natural gas industry is likely to be established during the next half-century that will serve as a bridge to the hydrogen future because natural gas represents a reasonably clean transition fuel, as well as a feedstock for hydrogen. Federal investment should include broad support for research and technology development in conventional natural gas but should expressly focus on the identification, characterization, production, and transportation of unconventional natural gas resources. The unconventional gas sources are rarely associated with oil.
Unconventional natural gas, such as tight gas, methane, and shale gas, represents on the order of 30 % of total US natural gas production today and is virtually untapped as a global resource (Card, 31 - 32). In the last 20 years, data show that federal and private investment in research and technology, private sector investment in exploration and development, and federal and state incentives combined to create new unconventional natural gas resources in tight formations, shale, and coal. From the critical standpoint, only long-term and vast national programs can bring effective changes in the US energy crisis, and surely tourism industry will be one of the first to feel the positive shifts. Bibliography RANDY DIAMOND. (2005). Prices May Dampen Summer Vacations, The Tampa Tribune, April 31, Tinker, S. W. (2003).
Committee on US Natural Gas Demand and Supply Projections: A Workshop, Washington, DC, The National Academies Press, Card, R. , Hans L. (2004). Lecture to Resources for the Future, Boston Books T. K. MALOY. (2004). Americans cutting back at the pump, United Press International May 28 Bruce Siceloff. (2004).
Holiday travelers ready to brave high gas prices, The News & Observer Raleigh, North Carolina, May 27
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Research essay sample on Natural Gas Gas Prices
