Mariah Stewart Aviles 1st 2/24/12

Two

reasons contributing to rise in gas prices are increased demand and increasing cost of oil due to investing in the commodity.

Demand for oil grows as countries develop and populations grow. Worldwide increase in demand for oil is especially due to a boom in per capita income in the two most populous countries in the world, India and China which together account for 37% of the worlds total population. These countries huge populations and rapid urban development have led to a growth in demand for resources.

As they develop and their per capita income grows, more people are buying cars as well as using more resources than they would have previously been able to afford. Although the per capita energy use in India and China is not even close to that of Europe and North America, it is sure to rise in the future with further economic growth. The current and future surging demand in these two countries and the disproportionate supply rate cause increased price for oil.

The other contributor to the price of gas is commodity traders who buy and sell future contracts on materials and resources such as oil. Commodity traders make a profit by buying a contract and then setting a higher price and a time in the future to sell them. So every time a future contract changes hands before it goes to market, its price increases. Since investors dictate the price at which the oil will be sold in the future, their speculation has a heavy influence on oils cost once it hits the markets.

Fears about political unrest, natural disasters, and economic patterns all tend to have the greatest effect on traders predictions. If the speculator foresees any increased demand or decreased supply, they will jack up their prices. Even without fluctuation of supply and demand, commodities traders are driving up the price of oil by investing money that was once invested in real estate or the stock market.

A commodity is any resource, material, or raw product (used to make other products) that is traded. They are bought and sold buy businesses that need them to operate or by traders who purchase them for the sole purpose of reselling them at a higher price. Commodities are traded on futures contracts which are deals that dictate the amount of the commodity, its predicted future price, and a specific date at which the commodity will be sold at said price.

Index speculators are the people who predict these future prices and thus set the price for the commodity. These are investors that arent concerned with actually acquiring the resource, only trading futures contracts to make a profit.

THESE THINGS ARE IMPORTANT BECAUSE They threaten the markets inherit nature by trading with no regard for supply and demand which reverses the method by which prices are set. To make money, the speculators usually bet on increases which immediately raise the commoditys price. Also these speculators are merely placing bets based on prediction and have no interest in the actual buying and selling of the commodity, and in the case of oil, theyre making a lot of money by influencing the futures market. Speculators cause producers to horde theyre product so they can sell it later at a higher price which decreases supply available to consumers when, in fact, the supply is there. Speculators are at fault for creating an artificial market independent from supply and demand influence but completely reliant on the prices set by the people who make more money the higher it is.

In recent years, the Government has implemented new regulatory laws in order to decrease dependence on oil.
The Energy Policy Act is a bill, passed in 2005, that was intended to promote alternative energy development with tax incentives. It rewards consumers for making energy conserving purchases, for example, giving tax breaks to those who make energy-efficient improvements to their homes. In the case of the car industry, the act replaces the clean-fuel burning deduction with a tax credit, a deduction from total amount of federal tax owed, for owners of hybrid vehicles. The Energy Policy Act also increased the percentage of bio fuel (ethanol) that must be mixed in gasoline sold in the U.S.
CAFE stands for Corporate Average Fuel Economy which is the required average fuel economy for a manufacturers entire fleet of passenger cars and light trucks for each model year. If a manufacturer fails to meet that standard they are required to pay a Gas Guzzler tax which is intended to discourage production and subsequent purchase of fuel inefficient vehicles. CAFE provides incentives in the form of credits to any manufacturer whose fleets average fuel economy for a particular model year exceeds the standard. Earned credits can be used by manufacturers to offset previous shortcomings.

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my family, as with many other American families, we are cutting back on gas usage and everything else we spend money on. My mom got a hybrid car last year and I try to carpool almost everywhere. Also havent been on vacation since 2009, thats a long time!

With the soaring prices of gasoline, Ethanol is an alcohol that can be stripped society is getting more and more of its water content interested in an alternative fuel. and highly concentrated (until One of these alternative is bio-fuel it is not potable) and or ethanol. used as fuel.
The ethanol making process starts with the fermentation of any starchy plant (one that contains carbohydrates). The plant is stripped into three parts: lignin, cellulose, and hemicelluloses. The cellulose or starch is then converted to sugar and sugar is fermented by microorganisms (yeast) feeding on it. The byproducts of this fermentation process are ethanol and CO, the ethanol is then purified to reach desired concentration for fuel. Today, all gasoline sold in the US contains 10% ethanol this means that all cars driven here can use gasoline/ethanol blends with up to 10% ethanol.

Converting to ethanol as fuel as many drawbacks for the consumer as well as manufacturer, the first being that ethanol content in gasoline reduces a cars fuel economy by 20% because it isnt as efficient as pure gasoline. To make a vehicle E85 capable, manufacturers must modify the original models engines which costs them anywhere from $100$150. Consumers are not charged any more for an E85 vehicle than for its gasoline-only counterpart so the manufacturers are paying that extra conversion costs out of their pockets. Another drawback to purchasing an E85 vehicle is that an E85 fuel pump is hard to find and once found, the fuel may cost more than normal gasoline.

In recent years car manufacturers have increased the number of Flex Fuel vehicles they manufacture. These vehicles, including E85 vehicles are adapted to be able to use any percentage of gasoline/ethanol mixture. E85 vehicles can use fuel with up to 85% ethanol. Two E85 vehicles on the market today are the Ford Lincoln Town car E85 flex fuel and Chevrolet Equinox E85 flex fuel.

Ethanol can be produced from any plant containing starch. Americas current favorite source of ethanol is corn. For every one unit of fossil fuel used to produce corn ethanol, 1.3 units of energy are produced and it yields 22% less greenhouse gases than gasoline.

Another popular source of ethanol is sugarcane. Unlike corn, sugarcane doesnt need to be broken down to get any sugar out of it and it yields more than twice as much ethanol per acre as corn. Brazil grows a ton of sugar cane and is the leading producer of sugarcane ethanol.
For every one unit of fossil fuel energy necessary to produce sugarcane ethanol, 8 units are produced, and running on sugarcane ethanol emits 56% less greenhouses gases than gasoline.

A third source for ethanol production that doesnt cut into food supplies is plant byproducts. These are stalks, grass, leaves, cornstalks, switchgrass, wood, sawdust, etc. Although not yet produced commercially, cellulosic ethanol yields 91% less greenhouse gases than gasoline and for every one unit of fossil fuel energy required, up to 36 units of energy are produced. Cellulosic ethanol is advantageous because it is utilizing plants or parts of plants that would previously have just been discarded, as opposed to cutting into the worlds food supply.

About 25% of the items in a typical grocery store contain corn in the form of corn syrup, corn starch, corn flour, corn meal, and ground corn cobs. As we use more of our corn supply for fuel, less supply is available for food production, and prices will skyrocket.

In Mexico, the price of corn tortillas, a major staple in their average citizens diet, has doubled in the past year. Even the production of chicken meat and eggs is going to feel the effects of smaller corn supply. Poultry feed is about two-thirds corn and chicken and egg prices have already risen about 15% due to increase in the price of corn. Products sweetened with corn syrup, soda, juice, candy, and almost everything else are all going to experience a price increase as well.

NO. Corn ethanol is not the answer to worldwide energy concerns. Corn is already mass produced and heavily subsidized in the U.S. but this is because we already use it in so much stuff. Shifting the corn supply from food to ethanol production would only create more problems than it solves

But neither is sugarcane the answer either! With sugarcane in Brazil, it is basically the same story. Also, the more popular sugarcane ethanol production is, the more deforestation occurs so the environmental upsides are very little.

SO I see cellulosic ethanol as the answer to this question. It requires very little fossil fuel energy to produce and there are no industries competing for its supply! By using plant byproducts, less greenhouse gases are emitted, and nobody is contributing to world hunger!