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Tourism: Rising gas prices have an enormous impact on the tourism industry. Airlines, cruise lines, and bus lines all need fuel to operate; hotels, resorts, and restaurants need energy to heat and cool their buildings; and families traveling by car who have to pay over $3 per gallon are beginning to limit their normal travels.  Increased travel costs have made normal travel difficult, and the overall tourism industry is suffering. A decline in tourism means small cities and towns who depend on tourism to fuel their economies are suffering economically. The airline industry is struggling to keep airline travelers.

Individual Disposable Income: Perhaps the most personally painful aspect of the rising gas prices is the way that it is impacting individual disposable income. Gas prices have placed pressure on budgets as families and individuals must readjust their spending in order to pay high amounts to heat their homes and drive their cars.

Sense of Security: High gas prices impact our sense of security as consumers. Price gouging has become a threat to consumers, causing many consumers to wonder if they are being ripped off at the gas station. Gouging is the act of an individual station taking advantage of supply problems (real or perceived) and inflating their price to take advantage of the supply problem. Most experts agree that it is difficult for a consumer to make a definitive judgment as to whether they are a victim of price gouging. Each state has different standards as to what is considered taking “unfair advantage” of a crisis, and each state’s attorney general monitors these situations closely, but regardless, the sense of consumer security as it relates to fuel is lost.

What steps should our nation take to address gas prices?

We Must Release Our Dependency on Foreign Oil: We will not see a dramatic decrease in gas prices until we release our dependency on foreign sources of oil. As it is right now, we are paying gas prices that directly reflect decisions by OPEC and disruptions of oil production due to instability within supplying countries. This dependency creates severe limitations on our national security options.  Achieving energy independence will require us to work together and approach the energy crisis from multiple directions—drilling within the U.S. will not provide enough oil for us to break our foreign dependency, so we must turn to a combined effort. Searching for diversified fuel sources, conserving energy on a personal level, and encouraging the use of energy efficient technology together will increase our chances of reaching energy independence.

We Must Increase Our Fuel Supply

If we increase our fuel supply, we will lessen the pressure on gas prices. The first step in creating more fuel is by building new oil refineries and updating existing refineries.  We haven’t built a new oil refinery in the U.S. since the late 1970s, and the inability of our existing refineries to meet fuel demands places great pressure on gasoline prices. A discussion of the current capacity of refineries, the need to upgrade refineries, and the steps needed to increase capacity to an appropriate level is essential to addressing our energy crisis.

Many have begun to look at alternative sources of fuel including biodiesel and hydrogen, all of which can be produced domestically. These alternative sources of fuel generally have little or no impact on the environment from a pollution perspective. Additionally, alternative sources, which are produced by using resources such as corn or other vegetation, are renewable. However, recent increases in food prices have caused legitimate cause for concern over the best way to use food sources for alternative sources of fuel.

We Must Support Alternative Energy Research and Development

Seeking technological change through innovative research and development will not only allow us to become energy independent, but energy efficient. We improve energy efficiency when we improve parts of technology within a service so that it requires less energy in the process. Increasing energy research and development in our nation will increase our energy efficiency, while still allowing us some of the technological luxuries to which we have become accustomed. None of this is going to take shape  if we try to accomplish it without the assistance of the best and brightest scientists and researchers in the U.S. acting in a modern day “brain trust” in order to study the best energy policies our country can adopt. We need to establish this commission of scientists and researchers to develop an energy plan that works for our nation, and that results in lower gas prices.

We Must Conserve

It is unreasonable for us to believe that telling people to drive hybrid cars, bike to work, and use energy efficient lightbulbs will solve our energy problem. While these things may have an immediate impact on an individual level, on a global scale we need a much larger, scientific-based conservation effort. By using scientific research and development, energy conservation could be an important step in reducing our gasoline consumption and our energy demand. With rising gas prices, we can hope that increasing our conservation efforts may lead to lower costs and the reduction in the need to produce more power. The reduced energy demand can provide more flexibility in choosing the most preferred methods of energy production.

The Department of Energy has a list of other low or no-cost ways to save energy in your home; this list is available on their websitehttp://www.energy.gov/yourhome.htm. These small acts on a personal scale can have a huge impact on the overall global scale.

SOURCE: http://www.house.gov/forbes/newsroom/editorials/2008/gaspricesprimer.htm