High Fuel Prices

Why Are Fuel Prices So High?

By now, you’re certainly aware of the high fuel prices that have skyrocketed at truck stops and other diesel providers everywhere. You’re probably so aware of the prices that you’re frustrated, complaining to your boss, calling your senator, or expressing your feelings on the Internet. But why are fuel prices so high?

Though taxes, war with Iraq, and other government decisions are certainly responsible for some of the price hikes, another important reason why diesel prices are so high is the peak oil problem.

Because oil is a non-renewable resource, produced from fossil fuels, a time must come when that oil, which is used to produce diesel, runs out. According to M. King Hubbert, who drafted the peak oil theory in 1956, that time has already come. Hubbert theorized that the United States’ oil production would peak, or get to the point where production would dramatically slow down, between 1950 and 1970. Though some agree with Hubbard’s assessment that oil production in the United States has already peaked, all agree that the peak oil problem is a major challenge since everything from food production to the transportation industry relies on oil.

But the peak oil problem is not only a problem for the United States. Though some believe the United States, because of its vast economic dependence on oil, will feel the effects of the peak oil problem most severely, the rest of the world will eventually reach a production peak as well.

Effects of the peak oil problem for the entire world can be described as soaring food and fuel prices, the virtual shut down of the transportation industry, and an extraordinary cost of heating and cooling homes. Those who live in the United States have already begun to feel the pain of peak oil as food prices continue to rise and diesel makes its way to over $4.60 a gallon.

Though the trucking industry has been hit hard by the peak oil problem, transportation is still one of the most necessary services in the United States. Small businesses and owner operators are struggling to make ends meet because of the soaring price of diesel caused by peak oil, but trucking isn’t about to go away anytime soon. Regardless, the problems caused by peak oil are not making things easier for truckers or trucking companies.

So what is being done about the problem? Drillers are still looking for oil. Some think reserves could be found in Alaska and other areas. Though this might delay the problem, it is not an ultimate solution. A lasting solution to the problem will replace the fuels that are being depleted with fuels that come from renewable sources. Scientists and corporations have been researching these alternative fuels for decades. Certain alternative fuels, like fry oil, are already being used in trucks. In fact, in 1992 the government mandated that fleets that meet certain qualifications operate a certain percentage of alternative fuel vehicles.

Taxes, refining costs, and the climbing price of peaked oil are what cause fuel prices to climb higher and higher. But with continued efforts to reduce fuel taxes, find more oil, and develop alternative fuels, the price of diesel can go down.