Wednesday, May 4, 2011

No Pandering: Auto Facts in China Drive $4 Gas in USA

Trying to manage the real pain to millions of American inflicted by high gas prices nearly all politicians are pandering to their supporters and offering convenient scapegoats.  Liberals point to oil companies and conservatives to environmentalists.  Both partisans are ignoring the real cause: steadily escalating global oil demand.

Just consider only these auto facts for China.  China had 5 million cars in 1990.  Today about 80 million. China in 2009 became the largest car market in the world when 13 million cars were sold in China at a time the US car market collapsed to about 10 million.

For many years from 2009 China will have the largest car market.  In 2011, approximately 17 million cars will be sold in China and in 2012 still more and so on.

The growth in the Chinese car market is still in the early stage with 1 car for every 17 Chinese, while there are 8 cars for every 10 Americans.

 If the penetrations of cars in China reach American levels, China alone will have 1.1 billion cars.  Currently the globe has 1 billion vehicles, with 25% of them in the USA.

Moreover the Indian car market is at an earlier stage than the Chinese but is also growing rapidly.

Industrialization and modernization in China, India, and other emerging countries is the fundamental cause of $4 gasoline.  Attacking our respective favorite scapegoats--whether they be oil companies or environmentalists--is pandering and ignoring the facts.

The USA cannot drill or conserve its way out of $4 gasoline.  Changing US supply and demand cannot impact global supply and demand enough to change substantially global oil prices.

The only escape is to ditch oil by moving to natural gas vehicles, electric cars, and biodiesel.

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