Gas closes in on $4 per gallon. Surprised? Ready?

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Gas prices well above $4/gal. in California

History repeats itself with startling regularity in this country.  Case in point, energy prices.  The national average at the pump is approaching $4/gallon.  And it’s considerably higher in places like California.  Politicians of many stripes are claiming they are shocked this is happening and that something must be done.  The Obama administration is investigating fraud and abuse in the oil markets.

But the real trouble is that we have a pathetic energy non-policy in this country.  And as such, we’re at the mercy of energy price bouncing up and down on the world markets.  And bounce they do, but with a general upward trend.

Oil and gas price data from GasBuddy.com.
Oil and gas price data from GasBuddy.com.

Politicians fiddling, or feigning shock as prices rise, won’t really protect you.  Perhaps someday the pols will recognize some basic Econ 101 principles, when demand rises and supplies don’t, prices go up.  Add some market risk and uncertainty from say unrest in the Middle East, natural disasters like hurricanes, or man-made disasters like the spill in the gulf, and they rise more.

And home energy prices in the long term do the same.  Some regulated utilities like electricity and natural gas take a bit longer to change.  Others move more or less lockstep with oil prices.  Remember just a few short years ago when heating fuel and propane soared to over $4 per gallon, and other utilities followed suit?  Are you ready for this?  Had your home energy assessment?  Made the improvements?

I’m not holding my breath that as a country we’ll figure out how to productively address energy policy.  But that doesn’t mean you are helpless.  You can make choices.  You decide what and how you drive.  You decide whether your home is an energy hog (and not as comfortable or healthy as is could be). 

Very few people, if any, can control world energy prices.  A government panel isn’t going to do it for you.  So, as energy prices rise, we can pretend we didn’t know it was coming.  And suffer the consequences.  Or we can take steps to improve our homes—and insulate our personal finances against rising energy prices.

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