Spiraling gas prices start to hurt S. Florida pocketbooks, psyches

Some drivers are altering their routines, going out less, or even going to therapy as gas prices begin to strain family budgets.

South Florida drivers are cutting back on dining out, slowing down their driving and -- this is amazing -- even complaining to their therapists over rising gas prices.

''People are increasingly agitated,'' said Plantation psychologist Priscilla Marotta, who said she's seeing an increase in clients suffering panic attacks. ``They say they have no control over their budget. And they have to drive to work. They feel like their lives are spiraling out of control.''

This is South Florida, after all. We love our cars and we don't have a lot of other options for getting around. So we're tinkering with our routines -- in a few strange and unexpected ways -- hoping small changes will add up to big savings.

• If you see more tow trucks parked outside your neighborhood McDonald's, it's gas prices. Ron Self, owner of South Florida Towing and Transport, said he's begun telling his drivers to sit down and relax a while, when they're done with a call, rather than drive back to his offices in Perrine or Hialeah. ''Basically, we're trying to drive less or otherwise we're having to increase our prices and customers aren't really happy about that,'' he said.

• María Cárdenas, 29 and single, isn't going out to eat, spending money on clothes or doing as much shopping as she used to. The price of her 80-mile-a-day commute from home in West Kendall to work in Fort Lauderdale is holding her back. ''I'm feeling the impact,'' she said. ``It's adding up little by little.''

She's part of a three-car family with her mom and dad. Total family gasoline bill: $131 a week.

• Michael Bullard, 57, isn't dropping in on an elderly friend in a nursing home as often as he used to, because of gas prices. He's making fewer trips from his home in Pompano Beach to his church in Boca Raton. He's coordinating his errands to make fewer trips. As a result, he has reduced his three fill-ups a week to two.

Bullard has turned his cruise control down from 70 miles per hour to 60. Now you might catch his 1999 Lincoln Continental in the far-right lane, with truckers rushing past. He made the change to steady his driving and make the car more fuel-efficient.

''I don't know if I'll be able to keep it up. It's hard to be out on the road and not to want to speed up,'' he admits.

Such trade-offs may be difficult, but when prices per gallon jump 18 cents in only a week, more and more people feel they must do something -- and quick.

Traditional solutions to lowering costs are gaining ground, too. Almost 6 percent more people in Broward are taking the bus than last year. A spokesman for Miami-Dade County Transit reports that Park N Ride lots were far more crowded last week.

More people are carpooling -- or at least checking out how to do it. ''We have probably quadrupled since the beginning of the year in the number of people who have requested to find ride matches and alternate modes of transportation to commute to work,'' said James Udvardy, project director of South Florida Commuter Services.

Only a fraction of South Floridians ever board a bus or a train. Just 4 percent of Miami-Dade and Broward workers take public transportation and only 11 percent carpool, according to 2003 U.S. Census data. That's despite a recent survey showing the average commuter who drives to work in the Miami metropolitan area spends 51 hours a year stuck in traffic.

And drivers still love those gas-guzzling SUVs. Nationwide, SUV sales were falling all year until GM and other manufacturers offered discounts. Buyers jumped, despite steep gas prices, and pushed SUV sales up in July.

If gas prices stay high -- as they are expected to do -- one expert in finance and behavior says drivers will eventually be forced to make some major changes in lifestyle.

''There are some people who, in deciding whether to buy a house or rent an apartment that is a long way from work, will change their decisions because of high gas prices,'' Jay Ritter, the Cordell professor of finance at the University of Florida's School of Business Administration, wrote in an e-mail. Ritter is also an associate editor of The Journal of Behavioral Finance.

Some, he predicts, will turn down a job and take a slightly lower-paying one to save on the commuting costs. ''These decisions accumulate over time,'' he wrote. ``So they have very little short-run impact, but they have a moderate impact over the long run.''

In surveys earlier this year, the Gallup Poll pinpointed $2.50 to $3 a gallon as the range many consumers considered a crisis point.

Gas prices reached $2.57 in Fort Lauderdale and $2.65 in Miami on average for a gallon of regular. Which means, $3 a gallon is in sight.

''That's a concern that I have,'' Cárdenas, the Kendall-to-Fort Lauderdale commuter who fills up twice a week, said.

``You know, you budget a certain amount of money a month for expenses, what you have left over gets smaller and smaller.''

http://www.chicagotribune.com/news/columnists/chi-0508210358aug21,1,1763647.column?coll=chi-news-col

PAYING FOR TRANSPORTATION

Good news about high gas prices
Steve Chapman

August 21, 2005

Last weekend, I saw the trailer for "Deuce Bigalow: European Gigolo" and immediately concluded there was nothing in the world I would less rather see. Since then, though, I have found something even more painful to my eyes: gasoline selling for $3 a gallon. I immediately concluded I would watch Rob Schneider on the big screen every day if it would bring back $2-a-gallon gas.

Of course, if you're older than kindergarten age, you may be able to remember even better days. If you go back in history to March 2004, you can find charmingly antique news stories like the one that began, in a tone of grave alarm, "The average price of gasoline has hit a record high of $1.738 a regular self-serve gallon."

And you think things are bad now? One expert, Craig Smith, co-author of "Black Gold Stranglehold," predicts pump prices will reach $5 a gallon next year--and could go as high as $10.

That prospect may have some Americans pondering which children they will have to sell into bondage to pay for transportation. It also has some politicians demanding that the federal government reduce prices by releasing oil from the government's Strategic Petroleum Reserve.

But neither of these drastic steps is necessary or wise. It turns out there is plenty of good news in the oil market, and it requires only a little patience.

Gas prices are high because crude oil has been selling for upward of $60 a barrel. That price, fortunately, looks as transient as a summer romance.

The going rate has been pushed up in the last couple of years by rising fuel consumption. But Michael Lynch, president of Strategic Energy and Economic Research Inc., says global demand has fallen short of predictions this year. Not only that, but crude oil inventories have been expanding in the U.S., which should help push prices down.

It turns out the law of supply and demand has not been repealed: When the price of oil rises, people consume less than they would otherwise. The longer oil remains expensive, the more people will look for ways to conserve it. Already, car buyers are flocking to gas-stingy hybrids, which were once regarded as the equivalent of living in a yurt.

Lynch expects prices to drop to $40 a barrel by the end of the year, if not sooner. He's not alone: The Russian government has drafted its 2006 budget assuming that's all it will get for its oil. That would bring gas prices down in the range of $2 a gallon.

Some alarmists, known as "peak oil" theorists, predict world output will hit its absolute limit soon--in November, to be exact--and then begin a steady, unstoppable decline. But pessimists have always been wrong before, and I'd bet a barrel of oil they'll be wrong again.

Why? Because aside from dampening demand, high prices have served the other useful function assigned to them by economics textbooks: boosting supply. Oil producers, spurred by the lure of big profits, have been investing like mad in new sources.

"Significant new capacity will be coming onstream--much of it launched a few years ago on price assumptions much lower than today's market prices," according to Daniel Yergin, chairman of Cambridge Energy Research Associates. A recent study by his firm says that, based on investments already made, worldwide output could rise by as much as 20 percent in the next five years. CERA thinks the peak of global production is indeed on the horizon--but not till after 2020.

Maybe the best news about the oil crisis is what the government is doing to solve it: very little. True, President Bush recently signed a major energy bill that may waste taxpayer funds on assorted subsidies, but it generally refrains from mucking around with the operations of the market. Unlike the 1970s, when prices last soared, no one is insisting that the federal government regulate the price of gas.

A few politicians, including Sen. Barbara Boxer (D-Calif.) and Illinois Gov. Rod Blagojevich, have called on President Bush to force down prices by selling oil from the Strategic Petroleum Reserve. That would be self-defeating, since it would discourage consumers and producers from doing what they need to do.

Fortunately, the president seems about as likely to heed them as he is to free Saddam Hussein.

Letting markets function naturally may have occasional regrettable results, like "Deuce Bigalow." But when it comes to energy policy, nobody has come up with anything better.

E-mail: schapman@tribune.com

Oil rigs thirsting for Fla. waters

Prices are high, and other sources are drying up, so more are pushing to open - or at least explore - Florida's coasts.

By ANITA KUMAR and WES ALLISON
Published June 13, 2005
http://www.sptimes.com/2005/06/13/Worldandnation/Oil_rigs_thirsting_fo.shtml
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WASHINGTON - Having kept oil rigs at bay in the eastern Gulf of Mexico and other protected waters for the past 25 years, lawmakers from Florida and other coastal states are facing unprecedented pressure to open their shores to drilling.

The push is fueled by record-high oil prices, a dwindling national supply and a growing public distaste for importing so much oil.

Congress used to consider a proposal or two every couple of years, but now drilling supporters are pressing for almost a dozen bills and amendments. Environmentalists, energy lobbyists and lawmakers say they've never seen anything like it, and they fear they won't be able to stop them all.

Up for debate in the Senate this week, an energy bill provision would mandate the first inventory of oil and gas reserves of its kind in all U.S. waters, including Florida's.

Meanwhile, the House wants to weaken a state's ability to fight offshore drilling. Already this year, both chambers voted to allow drilling in Alaska's Arctic National Wildlife Refuge.

"The prodrilling people are putting more chances out there to get drilling in the eastern Gulf of Mexico," said Enid Sisskin of the Gulf Coast Environmental Defense, a group of Panhandle drilling opponents. "It is coming together right now. It's coming from all sides. Why? They think they can do it."

Here are some key reasons, according to lawmakers and energy experts:

--Oil prices are topping $50 per barrel; gas prices are more than $2 per gallon; spiraling natural gas prices are escalating the cost of generating electricity.

--America imports 53 percent of its oil. Lawmakers say constituents want them to reduce the nation's dependence on foreign oil, especially from the Middle East, and create new jobs in the United States. America owns just 3 percent of global reserves but consumes a quarter of the world's oil.

--In the past decade, the federal government has increased incentives to drill offshore by reducing royalties paid to the federal government for mineral rights the farther out they go. Those companies want Congress to loosen restrictions, noting that 80 percent of the nation's waters are off limits to gas and oil exploration.

--Onshore wells and old shallow-water wells in the gulf, which provide about a quarter of the nation's oil production, are going dry, forcing companies and the government to seek untapped sources farther offshore. U.S. energy consumption has increased by about 4 percent in the past three years, while domestic production has dropped by 1 percent.

Only a handful of states allow drilling off their shores. But for the first time in about two decades a new state, Virginia, has indicated it wants to join them; drilling advocates are optimistic it's a sign of more to come.

"I think people are recognizing that the cost of energy in this country is skyrocketing, and they want to do something about it," said Sen. Mary Landrieu, a Louisiana Democrat who is leading the Senate efforts for drilling. "A love for our nation's greatest beaches should not require us to put our heads in the sand."

Florida lawmakers, concerned that drilling may jeopardize the state's beaches, remain the biggest impediment to easing restrictions. They are rallying their coastal colleagues and have assurances of support from many states on the West and East coasts.

Sen. Bill Nelson, D-Fla., who is coordinating the fight along with his Republican counterpart, Sen. Mel Martinez, said his colleagues are facing a lot of pressure back home to act.

"We are in this horrible position of being so dependent on foreign oil," Nelson said. "And they think this is the way to solve that problem. But it isn't."

* * *

This week, the Senate will consider an energy bill that for the first time would allow for a complete inventory of all oil and gas resources around the United States.

Congress has been trying to pass similar legislation since the 1980s, but it always failed because opponents say it represents a "slippery slope" toward drilling in areas that long have been under a drilling moratorium.

The federal government has banned virtually all drilling in Florida's offshore waters since 1983 - a decision upheld by Congress and the last three presidents, including George W. Bush. Florida is also the only state on the Gulf of Mexico that prohibits drilling in its inshore waters.

Some oil leases were sold in the gulf, south of the Florida Panhandle, many years ago. But Congress and President Bush's father prevented drilling there, and new leases are prohibited within about 100 miles of Pensacola.

"No one there thinks they can make a direct run to Florida's coast. It's gradual," said Joe Murphy of the Florida chapter of the Sierra Club. "It's death by 1,000 cuts."

Landrieu wants the energy bill to allow states to opt out of the moratorium altogether and provide those states a greater share of royalties from oil companies.

Now, most of that money goes to the federal government, which has collected $155-billion since 1953, according to the Minerals Management Service.

To make sure those proposals can work, Landrieu wants the federal government to draw state boundaries farther into the water. No one knows how the lines will be drawn, but Florida stands to lose waters to oil-drilling states.

Landrieu said she and Nelson have talked about ways to single out Florida for protection in the legislation, but no agreement has been reached.

"Let me be absolutely clear: Nothing in these proposals forces Florida to allow drilling off its coast or make any changes to its coastal plans," she said. "I'm not asking Florida to contribute their fair share; I'm asking them to let other states contribute their fair share."

Energy-producing states like Louisiana and Wyoming are frustrated that states like Florida don't produce more energy. Florida is the third-largest energy-consuming state, leaving others to fill the gap.

Landrieu may offer proposals as early this week or later in the summer. She has powerful Republicans behind her, including the chairman of the Senate Energy committee, Pete Domenici of New Mexico, and senators from Virginia, Texas, Mississippi and Alabama. Sen. Lamar Alexander, R-Tenn., introduced his own natural gas exploration bill this month.

Martinez sent Bush a letter Thursday, asking for his help in keeping the moratorium.

"It's going to be a huge fight and a difficult fight," he said in an interview. "We're working feverishly to shore up our positions. This is an ongoing battle. There won't be any quick and dirty unanimous consent."

* * *

In May, some House members tried to pass a pair of amendments to the Interior Department's spending bill that would have weakened, and perhaps eventually eliminated, the moratorium on drilling for oil and natural gas off Florida's coast.

Both failed.

Rep. Ernest Istook, R-Okla., sought to allow oil drilling in the eastern gulf if net imports of crude oil account for more than two-thirds of U.S. consumption. Today they make up 53 percent.

"It's time to say this is not a perpetual ban," Istook told his colleagues. "Isn't it about time we find a common sense approach?... We shouldn't say we have a moratorium forever."

Rep. John Peterson, R-Pa., tried to eliminate the ban on natural gas drilling off most of the U.S. coast.

Peterson said he plans to educate his colleagues about why natural gas production is so important and bring back his proposal, perhaps later this session.

"I have been stunned this isn't the top debate in America," he said last week. "For 22 years, we have legislated this moratorium. They are all wrong."

Environmentalists worry that because neither Florida Gov. Jeb Bush nor President Bush, a former oil executive, can run for re-election, they might no longer insist on the moratorium.

But supporters say that drilling is safer than ever and that the greatest threat of oil spills comes not from domestic drilling but from tankers, like the Exxon Valdez, that bring foreign oil to the United States. About 97 percent of the oil spills around rigs around the nation do not exceed one barrel, and natural gas evaporates and poses no risk of spills, according to the industry.

"We're encouraged by the fact there's going to be a debate about this.... We think we've got a good story to tell," said Tom Fry, president of the National Ocean Industries Association, which represents 300 companies involved in all aspects of offshore drilling.

"We're in the business of trying to provide energy for the country, and we think we can do it in an environmentally sound way."

Meanwhile, the House version of the energy bill tweaks the Coastal Zone Management Act to make it harder for a state to appeal a federal drilling permit in its waters.

In the early 1990s, then-Gov. Lawton Chiles twice used that provision to stop drilling in the Dry Tortugas, off the Keys, arguing that the potential environmental and economic hazards of a spill outweighed the benefits.

The proposed change is subtle but strong: No longer could a state argue against a project for environmental reasons. It could challenge only the federal government's decision that there's a need for the project.

Rep. Jim Davis, D-Tampa, unsuccessfully tried to stop it. It's unclear how it will fare in the Senate.

"This is one of those things where if you don't fight, somebody else will, and they'll beat you back eventually," said Davis, who is running for governor. "This is a very intense battle right now, and it requires a lot of diligence and a lot of determination."

* * *

The proposals have led to furious politicking going into this week's scheduled Senate debate. Martinez and Nelson have met with Landrieu, trying to get her to abandon her efforts to redraw the boundaries.

In return, Nelson said they would support her efforts to boost her state's share of drilling revenues.

Late Thursday, Nelson, Martinez and Sen. Jon S. Corzine, D-N.J., gathered in Nelson's office to talk strategy, along with the staffs of senators from several other coastal states, including North Carolina, Washington and California.

They agreed to sponsor an amendment that would strip the required inventory from the bill. They pledged to use Senate rules to slow or stop debate unless Domenici agrees to preserve the moratoriums that protect most states' waters from drilling. Nelson has threatened a filibuster.

Senate Republican and Democratic leaders have allotted two weeks to debate the bill, and members in both parties are eager to pass it, to show constituents they're trying to address fuel concerns.

"If you've got a handful of senators objecting all the time, they can't pass it in that amount of time," Nelson said as the meeting broke up.

Negotiations are ongoing. As Nelson pored over a map of the eastern Gulf of Mexico spread across his wooden desk, an aide appeared at his office door. Domenici's office was on the line.

(Can someone please help me post the associated picture, http://www.sptimes.com/2005/06/13/images/NA_216093_goer_drilling.jpg)

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