EDITORIALS

Editorial March 8, 2000

Fuelish Fevers?

by David Pascoe

 

My first hint that there was a problem looming on the horizon came with a 1200 mile car trip over the Christmas holidays. In one state, we ran into gas pump prices as high as $1.75, which I chalked up mainly to high local taxes.

The next eye opener came a month later when a local fuel dock stop netted a price of $1.499 -- for diesel. The owner of the boat decided not to do a fill up, but owner still choked at the cost of a measly 300 gallons, though the tanks held 800.

Yesterday, March 7th, of course, made big news when the DOW dropped 374 points, largely based on fears of increasing oil prices, though the NASDAQ rose by some 50 points.  It was certainly amusing to listen to the advocates of the "new economy" gloat over the big hit the "old economy" DJIA stocks took. These are the same folks who've been pushing the notion that recessions are a thing of the past, that things like raw materials and manufacturing are a relic of the past; that the high tech NASDAQ resides in a world isolated from the banal realities of the old economy. We'll see about that, soon enough. Oil prices effect the cost of everything.

The real bucket of cold water came this week when street prices for regular gas hit as high as $1.65  here in south Florida, with a median of somewhere around $1.55. Which led me to wonder about all those people running around in new SUVs the size of a small bus, and guzzling along at 10-12 miles per gallon. A neighbor down the street just got  a Ford Expedition that absolutely dwarfs my GMC Jimmy, which barely gets 16 in town. This is mindful, after the 1973-74 Arab oil embargo, of how quickly all those full size Detroit cars disappeared and the little Japanese imports flooded our market. To get rid of your Cadillac or Buick, you practically had to give it away.

But road vehicle fuel costs are small potatoes compared to boats. Here we're often talking about gallons per mile, not miles per gallon. $35 to fill a 20 gallon tank, $660 to fill a 400 gallon tank. And as my frequent readers know, I've been harping a bit on the "need for speed" as boat engines have become increasingly more powerful and thirsty. But it wasn't fuel costs that I was concerned about. Rather it was the high cost of maintaining performance engines, particularly diesels, where newcomers to boating are often unaware of the hidden costs of high performance diesels. Everyone wants diesel power these days, but they also want to go fast.

Enter that old bogey, OPEC. The Organization of Oil Exporting Countries, consisting of 11 nations, including the likes of Libya, Iran and Algeria.  World economic stability doesn't exactly top their lists of concerns. Oil shortfalls are now running 3-4 million barrels daily. Meanwhile, OPEC is currently debating increasing production by 1 million, and balking at that. This in the face of having cut production by 4.3 million in February, 1999. The U.S. is 55% dependent on foreign oil.

The oil squeeze in the past has hit boaters and the boating industry hard. In no small part this is due to a shortsightedness that consistently expects cheap fuel prices to last forever. High oil prices have hit boating hard in the past, and will  do so again in the future. Whether the growing current situation will lead to yet another round of striving for fuel efficiency in boats remains to be seen. For while there is, as yet, no shortage of oil in the ground, we are using it up at an ever increasing rate. Not just for fuel, but for every product that is made of plastic, a vastly burgeoning industry world wide.

Presently there is no resolution for the current market situation in sight. Fuel prices will undoubtedly continue to climb as we move into the summer months and demand goes yet higher. OPEC may yet relent and increase supply sufficient to meet demand. But I wouldn't bet on it. It's their desire, and in their interest, to gradually push prices higher in order to make for some lean years of very low prices.

In any event, boaters once again will have to face the issue of fuel efficiency: how fast do you want to go versus how fast you can afford to go. What compromises are you willing to make? Size, weight, power, speed. Would you be better off buying a somewhat smaller or older boat, thereby saving on initial cost, to put into the fuel tanks later on? Do you strive for a lighter boat that keeps the same speed and requires less power, but sacrifices sea keeping ability? Or is it time to think about going slower and maybe a trawler type? Or at least giving up 30 knots and a cloud of spray?

There are a lot different ways to slice this pie, many decisions to be made for those about to make a purchase. In the past we've held to the idea that if fuel costs are problem for you, you probably can't afford to own the boat. That was certainly true at around a dollar a gallon. With prices fast approaching two dollars a gallon, a new perspective is emerging. That much you can bet on.