TIME Morning Must Reads

Morning Must Reads: January 24

Mark Wilson—Getty Images The early morning sun rises behind the US Capitol Building in Washington, DC.

Fuel’s Paradise

A majority of Americans are paying less than $2 per gallon for gas for the first time since 2009, and the ever-cheapening fuel is helping put more money in consumers’ pockets and bolster the economy

NASA Finds ‘Super Earths’

NASA’s Kepler Mission has found many planets in the “Goldilocks zone,” where it isn’t too hot or cold for water to exist

McDonald’s CEO Asks for Time

McDonald’s CEO Don Thompson cited a litany of actions the company is taking to reverse steep declines in sales

Federal Judge Strikes Down Gay-Marriage Ban in Alabama

A U.S. district judge ruled Friday in favor of two Mobile women who sued to challenge Alabama’s refusal to recognize their marriage performed in California. The judge said a state statute and 2006 amendment to the Alabama Constitution violated the U.S. Constitution

Big Storm Headed for the East Coast

A nor’easter could wreak havoc all along the East Coast this weekend, with a mix of rain and snow that will likely cause airline and traffic delays along the I-81 and I-95 corridors. Up to a foot of snow could accumulate in some locations

Obama to Cut Short India Trip to Visit Saudi Arabia

The schedule change, announced shortly before Obama left for India, means the president will skip plans to see the Taj Mahal, and instead pay a call on an influential U.S. ally in the volatile Mideast. Saudi Arabia’s King Abdullah died Friday at age 90

An Asteroid Will Fly Close to Earth on Monday

It doesn’t sound like a close shave, but in astronomical terms, it is. An asteroid will fly within 745,000 miles of Earth on Monday, NASA said, the closest a space rock will fly to Earth until 2027

Chicago Cubs Hall of Famer Ernie Banks Dies at 83

Ernie Banks, the Hall of Fame slugger and two-time MVP who always maintained his boundless enthusiasm for baseball despite decades of playing on miserable teams, died Friday night. He was 83

Emma Watson Launches New Anti-Sexism Initiative

Harry Potter star and U.N. Women Global Goodwill Ambassador Emma Watson unveiled the the HeForShe IMPACT initiative, a one-year pilot project geared toward advancing women by working with governments, companies and universities

Ebola Vaccines Get Tested in Liberia

The long-awaited vaccine for Ebola is heading to clinical trials in Liberia. Two vaccines, with the National Institutes of Health’s (NIH) support, will start efficacy testing in Liberia in the beginning of February

SkyMall Files for Bankruptcy

The parent company of in-flight shopping catalog SkyMall has filed for Chapter 11 bankruptcy, citing an increased prevalence of mobile devices on planes as the primary reason for the company’s flagging sales

Apple Store Chief Gets the Big Bucks

How much does Apple care about its retail stores? Enough to pay more than $70 million to the woman heading them up, making her the highest-paid exec at the company. Angela Ahrendts earned $73.4 million in 2014, almost all of it in stock awards

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TIME Economy

See the State With the Cheapest Gas in the U.S.

Gas prices in Missouri plummeted to $1.58 in January

At first look, the collapse in oil prices over the past year, from $107 per barrel in June to below $50 a barrel today, seems like the proverbial free lunch for American consumers. The decline in prices is the equivalent of a $125 billion tax cut. And it’s effectively a progressive one, since the biggest beneficiaries will be working- and middle-class people who spend a disproportionate amount of their income on gas for their cars and heating fuel for their homes. American households with oil heat could save $767 each this winter. That cash can now be spent on a new car—or a washing machine, an electronic gadget, clothes or a few dinners out.

That should boost spending, and …

Read the full story, which appears in the Feb. 2, 2015 issue of TIME, here.


So About That Goal of 1 Million Electric Cars by 2015 …

A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey
Emile Wamsteker—Bloomberg via Getty Images A Tesla Motors Inc. Model S connected to a charger at the Short Hills Mall in Short Hills, New Jersey

In the 2011 State of the Union, President Obama called for 1 million electric plug-in cars to be on American roads by 2015. Well, it's 2015, and we're less than one-third of the way there. What happened?

In Tuesday night’s State of the Union Address, President Obama discussed how “America is number one in oil and gas,” and said that “thanks to lower gas prices and higher fuel standards, the typical family this year should save $750 at the pump.” There was no mention, however, of an automobile-related goal set in the SOTU four years ago, when the president pushed for 1 million electric plug-in vehicles to be purchased by consumers by 2015.

The likely reason for leaving electric cars out of the president’s recent speech is obvious: America is nowhere near reaching that 1 million EV goal. As the Detroit News noted earlier this week, “sales [of electric cars] have been far slower than expected — about 280,000, including 120,000 in 2014,” and that “even with dramatic increases it could take at least four more years to hit the mark.”

It wasn’t supposed to turn out this way. A 2011 Department of Energy report declared the 1 million EV goal “ambitious” and yet “achievable” by 2015, with the help of some conditions:

While it appears that the goal is within reach in terms of production capacity, initial costs and lack of familiarity with the technology could be barriers. For that reason, President Obama has proposed steps to accelerate America’s leadership in electric vehicle deployment, including improvements to existing consumer tax credits, programs to help cities prepare for growing demand for electric vehicles and strong support for research and development.

The report estimated that starting in 2012, GM would be selling 120,000 Chevy Volts annually, and that by 2014, Nissan would be churning out 100,000 plug-in Leafs per year. Even though 2014 was seen as a decent year for the EV market, and quite a good year for the category-leading Leaf, only about 30,000 Leafs sold last year. That was an all-time high, but far short of the goal set a few years beforehand. Meanwhile, consumers bought only 1,490 gas-electric Chevy Volts in December 2014, and fewer than 20,000 in the year as a whole. The fact that Chevy was expected to debut a new Volt in early 2015 is only part of why sales have been anemic.

It’s no sudden surprise that America is coming up way short on the 2015 EV goal. By 2013, Obama and the Energy Department admitted that it wouldn’t happen, even as federal policies promoting EV adoption will run $7.9 billion through 2019, including but not limited to a $7,500 tax credit with each EV purchase.

Among the reasons often cited for lower-than-wished-for EV sales are their limited driving range in between charges and their still high initial costs even after tax credits, as well as vastly improved fuel efficiency in gas-powered cars (even SUVs) and, in recent months, exceptionally cheap gas prices. “The need to transition to electric cars is urgent,” Tesla CEO and EV visionary Elon Musk said in Detroit last week. Based on several years’ worth of sales data, however, consumers apparently aren’t feeling much sense of urgency on the matter.

The 2011 Energy Department report noted that “automobile consumers tend to be risk-averse, preferring well-proven technology,” and that “the performance and cost effectiveness of the early EVs in the market will be a major but unknowable factor in how many EVs are on the road by 2015.” Here we are in 2015, and it sure looks like, by and large, consumers haven’t bought into the cost-effectiveness pitch for EVs, either because they deem the vehicles too pricey, too impractical, or both.

This doesn’t mean that EVs won’t enjoy mainstream success down the road. Gas prices surely aren’t going to stay cheap forever. One former oil industry executive told USA Today that he sees $5 per gallon on the horizon in the near future. At the same time, EVs will keep getting cheaper and more practical for consumers, with the recent introduction of the $30K, 200-mile Chevy Bolt plug-in as a potential game changer in a couple of years. All of which changes the math on the potential purchase of an EV, and makes the prospect of owning one much more cost-effective.

So we’ll get to that 1 million EV goal at some point. It’s just a matter of when—and how much we’ll have to spend to get there.


Auto Show’s Most Talked-About Car Is One You Can’t Buy This Year

The Chevrolet Bolt EV concept vehicle
Jose Juarez—Chevrolet The Chevrolet Bolt EV concept vehicle makes its global debut Monday, January 12, 2015 at the Auto Show in Detroit, Michigan.

Probably the most-discussed vehicle at the Detroit Auto Show was the Chevy Bolt, an electric car that can be driven 200 miles on a charge and costs only $30,000. You can't buy one this year, though, or next year either.

The Auto Show kicked off this week with GM’s unveiling of the Chevrolet Bolt, which, despite its “concept car” label is expected to be a reality in the near future—on the market in 2017, most likely. The concept vehicle captured the imagination of many by (theoretically) solving the two big issues that have thus far stopped electric plug-in vehicles from being embraced by the mass market. Today’s plug-ins are either too impractical (driving ranges under 100 miles before the battery needs a charge) or too expensive ($70,000 and up for a Tesla Model S) for the typical household. With a 200-mile range and an asking price anticipated to be around $30,000 (after credits and incentives are factored in), the Bolt has been heralded as a potential mass-market breakthrough.

Here’s what people have been saying about the Bolt:

It’s a game-changer, likely to be a mainstream hit.
“The Bolt EV concept is a game-changing electric vehicle designed for attainability, not exclusivity,” GM CEO Mary Barra said during the model’s unveiling in Detroit this week. “For most people, [the Bolt] can be their everyday drive.”

Some less-biased, non-GM folk seemed to agree that the combination of affordability and expanded driving range before requiring a charge will make the Bolt appealing to the mainstream. “Getting to the 200-mile mark is when you start to see potentially a much wider base of mainstream consumers who aren’t just making short commutes, and don’t just want to be ‘green,'” Kelley Blue Book senior analyst Akshay Anand summed up to the Los Angeles Times. “You are looking at annual sales of 100,000 vehicles,” chimed in John Krafcik of TrueCar.com, a big leap up from the still-niche Nissan Leaf, which at 30,000 units sold in 2014 was America’s best-selling plug-in EV.

Others are more skeptical.
“You have to wonder what the market will be for super-efficient vehicles at a time when oil is around $50 a barrel,” auto industry consultant Jeremy Anwyl said to the Los Angeles Times. The assessment of Wall Street Journal columnist Holman W. Jenkins, Jr., was much rougher, writing that the Bolt is largely the product of automakers being forced by the government to meet fuel-economy mandates down the road, with the result being “cars the public doesn’t want and that can only be sold at a giant loss.”

It’s not very cool looking.
The $70K Tesla Model S became a favorite among auto enthusiasts not because it saves on gas—not only anyway—but because it’s a hot, stylish, high-performance car that’s incredibly fun to drive and show off. The cheaper and more practical Bolt, on the other hand, is expected to drive more like a golf cart, with looks to match. The Associated Press described the bubble-shaped Bolt as looking “like a cross between a Volkswagen Golf and BMW’s electric i3.” “There wasn’t much about it that was fanciful-looking in terms of features and styling,” a Motley Fool post noted.

Tesla doesn’t sound remotely concerned.
Despite headlines presenting the idea that the Bolt would be a “rival” and perhaps “upstage” Elon Musk’s hi-tech plug-in auto brand or even prove to be a “Tesla killer,” Tesla isn’t exactly shaking in its boots. In a released statement that’s the equivalent of a pat on the head of a cute, unthreatening puppy, Musk’s company announced, “Tesla is always supportive of other manufacturers who bring compelling electric vehicles to market … We applaud Chevrolet for introducing the Bolt and are excited to learn more about the product.”

Later, in an Auto Show press conference, Musk said flatly, “I don’t see it as a competitive threat.” The “it” in question is the Bolt, of course. “I’m pleased to see [GM CEO Mary Barra] and GM do it. It seems that [GM] will do something significant with the Bolt, and that’s great.”

Oh, and the name is terrible and might be changed.
Green Car Reports proclaimed that Bolt is a “really terrible name” for Chevy’s new EV. As evidence of the name’s terribleness, the site pointed to quips on social media noting that the name brings to mind the phrase “bucket of bolts,” the unloved old Dodge Colt, and even the 2008 cartoon movie dog named Bolt (voiced by John Travolta). The real problem, however, is that because the letters B and V sound alike when spoken aloud, “Bolt” will be easily confused with its gas-hybrid sister Chevy. “To say that there will be a great deal of confusion at dealerships between the Chevy Bolt and the Chevy Volt would be a gross understatement,” Green Car Reports explained.

The Detroit News reported that while GM likes the idea of linking the electrified Bolt and Volt with names that are alike, the automaker is not committed to keeping it. “The name by itself is very good, but when you put it with Volt you know — is it too confusing for someone? — we’ll find out,” said GM product chief Mark Reuss. “It’s a concept name. End of story.”


Can Consumers Lock In Low Gas Prices for the Future?

locked up gas can
Jeffrey Coolidge—Getty Images

Locking in gas prices is possible, but comes with a healthy amount of risk.

Another day, another drop in oil prices. Reuters reports Brent crude hit a near six-year low on Tuesday, and prices at the pump have been been falling at a cent-per-day pace.

Cheaper fuel is obviously amazing news for drivers. AAA estimates low gas prices will save the average American family $550 on gasoline costs this year. That’s nice and all, but what about next year? Is it possible to somehow lock in current gas prices for the long term? At MONEY, we set out to answer that very question.

The obvious move when a commodity suddenly tumbles in price is to stock up now. But with gasoline, that’s not really an option. Sure, it’s possible—Slate has a 2008 guide to doing so (they thought $3.87 a gallon was cheap!)—but experts don’t exactly see hoarding fuel as a smart way to save some coin.

“Storing gasoline is not recommended, that’s for certain,” said Michael Green, a spokesman for AAA. “Gasoline only lasts a few months before it starts breaking down. That’s not really going to work for you, and it could also have negative safety consequences.” Plus, depending on your local fire code, it’s probably illegal to store more than few gallons anyway.

Another option, for those not looking to explode, is to use a service that offers the ability to buy gas at current prices and then “cash in” those gallons when prices rise.

That’s the major selling point of First Fuel Bank, a family-run business operating out of St. Cloud, Minn. Customers with a prepaid “locked account”—lifetime membership costs $1—can buy gallons at a fixed price and then receive that gas any time in the future when they stop by a First Fuel Bank station.

Right now, the bank is selling a price-locked gallon of unleaded for $2.959, about a dollar above Minnesota’s market rate, but well below prices just a few months back.

Despite the premium, First Fuel Bank President Jim Feneis says consumers are rushing to stock up for the future. “We’re seeing a whole new resurgence of people locking the price,” he told MONEY.

Feneis’s company has only five locations, all in and around St. Cloud, but MyGallons.com offers the rest of country a similar service by letting consumers purchase a set amount of gallons over the internet at current prices. When prices go up, members can cash in their gallons, and have their earnings loaded onto a debit card or deposited into their bank account..

Like First Fuel Bank, MyGallons charges a premium for the promise of a fixed price. When membership and fees are taken into account, $2 gas turns into $2.39 per gallon—assuming a 150-gallon purchase.

Hedging against future costs certainly sounds attractive, but experts warn that products like MyGallons are essentially a more consumer-friendly way to trade futures and carry the same risks as any investment.

“It’s a gamble,” said Allison Mac, a petroleum analyst with GasBuddy.com, a site that tracks fuel prices in the U.S. and Canada. Mac warns the current price drop is primarily the result of decisions by OPEC, a cartel of petroleum exporting countries, and it’s difficult to predict the group’s future actions. Should prices stay low, a bet on higher prices in the future could turn out to be a costly mistake. “You just have to do the math in your head whether it’s worth it,” she said.

Green is equally skeptical. “We’ve seen gas prices drop about 40% since June,” he said. “If you had bought gas in June because you were concerned about what’s happening, you would have lost money.”

And as AAA’s Green points out, trying to beat the market on commodities can be just as foolish as trying to pick stocks. “Even people who trade on this every day can lose money,” he observed. “The average person is probably not going to be an expert on this.”


5 Kinds of Businesses Still Tacking On a Fuel Surcharge

UPS truck
Justin Sullivan—Getty Images

Fuel prices are plummeting, but some businesses are still passing the cost of gas on to the customer.

Fuel prices are currently at a six-year low and falling fast. A barrel of crude is about $48, down from $100 in September of last year. And on Monday, AAA reported the national average for a gallon of regular was $2.13, down 7¢ in just one week.

This price crash means big savings for the average American at the pump, but it also means businesses that use lots of fuel—like airlines, transportation services, and delivery companies—are seeing a windfall as well. Unfortunately, many have chosen not to pass those savings on to the consumers. How are they getting away with this?

Sometimes there’s a semblance of justification for fuel surcharges even at a time when fuel prices plummet. Allison Mac of the gas-tracking site GasBuddy told us via email that businesses are slow to change or drop fuel surcharges “because they need to be sure” that prices are going to stay low. Also, while drivers know how dramatically gas prices have decreased in recent months, they’re less aware that diesel fuel—used by delivery trucks, among others—has remained comparatively high. “The past couple of months we have seen gasoline dropping quickly and dramatically, but that is not the case for diesel,” Mac said.

Nonetheless, in many cases nowadays, it sure looks like the fuel surcharge is a blatant money grab. Here are some of the business categories where such surcharges are still in effect.


During the days of high gas prices in 2008 and 2011, many municipalities instituted a fuel surcharge for taxis to give cabbies some relief. It made sense at the time, but some cities have maintained the extra fee, and consumers aren’t too pleased about it.

Philadelphia is one city where a fuel surcharge is still in effect. The fee changes each month based on gas prices; it was 75¢ per trip in December. “What it was meant to establish was, basically, a permanent component in the medallion taxicab tariff which reflects fuel prices, no matter how low or how high they are,” said Jim Ney, director of Philadelphia Parking Authority’s Taxi and Limo division in an interview with CBS Philly. That hasn’t mollified riders very much. “We’ve gotten a few inquiries about it, that’s for sure,” Ney acknowledged.

In Chicago, cab rides carry an even larger $1 fuel surcharge. Drivers were initially unhappy with the newly permanent charge because it was seen at the time as too low. However, cabbies are likely singing a different tune now that they can reap the benefits of low fuel costs and higher fares.


Jet fuel prices have been slashed by at least one third over a recent 12-month span, yet with scant few exceptions airfares remain high, and airlines insist on tacking on fuel surcharges to many flights. Theoretically, such a fee—which can easily add $500 or more to the total cost of an international round trip—is instituted to help airlines cover their added expenses during periods when fuel is extraordinarily expensive. In practice, however, the surcharge is often simply a sneaky way for airlines to milk customers for more money without them really knowing what the fees are meant to cover.

As a recent Quartz article put it, fuel surcharges “don’t bear much relation to how much fuel actually costs,” and are instead just “arbitrary numbers that the industry adjusts to maximize their profits while staying competitive with other carriers.” In other words, airlines justify the tacking on of fuel surcharges because other airlines tack on fuel surcharges—and when they’re all on board with the scheme, it’s easy to get away with it because travelers don’t have anywhere else to turn.

Travel advocate Christopher Elliott has pointed out over the years that the airline industry originally said “it was adding a surcharge for the first checked bag to cover higher fuel costs, but when fuel prices dropped, it kept the fee.” Likewise, airlines are likely to keep on sticking passengers with fuel surcharges even as fuel prices drop. And the reason why they’re doing so is obvious: They make lots of money on surcharges—and they make even more when their costs are lower for what the surcharge is supposed to be covering (i.e., fuel).

Some relief could be in sight, however, starting with how one international carrier (Japan Airlines) decided it will cut its fuel surcharge as of February 1. Tim Winship of SmarterTravel.com and Frequent Flier applauded the way that Japan Airlines’ current fuel surcharge on flights between the U.S. and Japan ($259) will be scaled back to $173 each way, while pointing out that other airlines should do the “right thing” and decrease surcharges as well. Also, Winship wondered, “How low must fuel prices fall before the surcharges are eliminated altogether?”

Express Delivery Services

For the period stretching from January 5 to February 1, 2015, Federal Express is adding a 4.5% surcharge on express shipments and a 5.5% surcharge on ground deliveries. Why? For one thing, FedEx says it bases the surcharge on diesel fuel—most delivery trucks use diesel, after all—and diesel prices have dropped far more slowly than gasoline. What’s more, FedEx’s surcharges aren’t based on fuel prices from today, or even last week. “There is a two-month lag between the fuel price index and the fuel surcharge,” the company explains. “For example, the fuel surcharge for November 2012 is based on the September 2012 average spot price of fuel.”

Likewise, UPS tweaks its surcharge once a month, and its current surcharge rates are even higher than FedEx’s: 6.5% for ground shipments, and 7% for air and international packages.

Moving Companies

Again, because moving trucks generally run on diesel, and diesel fuel remains fairly expensive, many moving companies are still tacking fuel surcharges onto customer bills. Atlas Van Lines, for instance, has a surcharge of 12% in effect through January 14 for moving household goods. After that, the surcharge drops to 8% to reflect the decreasing price of diesel fuel.

Food Delivery

Online supermarket FreshDirect has a fuel surcharge that changes with the price of gas. But like FedEx, that surcharge hasn’t kept up with the current price of fuel. According to the company’s website, there should be no surcharge if retail gas prices fall below $3.01. Fill out an order, though, and you’ll notice FreshDirect is still charging a 38¢ fuel fee—something that should only happen if gas prices hit $3.26. FreshDirect did not immediately respond to requests for comment, but it’s safe to assume they’re based gas prices on some time in the past. That and the very low cost of the fee makes it more forgivable.


FreshDirect responded, saying their fuel surcharge is based on the retail price of diesel fuel, which has not declined in price as quickly as gasoline.


5 Cheap Gas Factoids That’ll Get Your Motor Running

gas station
Sharon Meredith—Getty Images

One way to appreciate the way gas price have plunged is to simply gas up. Depending on what you drive and where you live, filling up the tank is probably around $30, maybe even less.

Not long ago, that fill-up probably cost more like $50. Here are a few more factoids to help wrap your brain around just how cheap gas has gotten in recent months—and how much money drivers can expect to save if prices remain low.

Prices are falling by 1¢ daily.
As of Monday, according to AAA, the national average for a gallon of regular was $2.13, down from $2.20 the previous Monday. Over the last three weeks, the average has dropped 27¢, and one month ago, the average was $2.60. Prices at the pump have decreased for more than 100 consecutive days, and recently prices have been falling by an average of more than 1¢ per day. If we stay on the pace of a 1¢ daily drop—which is a complete and total impossibility, of course—gas would be free in 213 days, just in time for road trips in August.

Only 1 state averages over $3 per gallon.
Unsurprisingly, it’s Hawaii, where the average is $3.42. Alaska is usually the other persistently high outlier for gas prices, and the average there dropped under $3 recently, measuring $2.93 on Monday. Bear in mind that sub-$3.50 gas is very cheap for the Aloha State, where the average was $4.16 for 2014 overall. Average Hawaii gas prices were as high as $4.67 in 2012.

19 States (and counting) are averaging under $2.
They are: Alabama, Arkansas, Colorado, Iowa, Idaho, Indiana, Kansas, Louisiana, Michigan, Minnesota, Missouri, Mississippi, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas, and Missouri—which is the cheapest state of all, averaging just $1.77 per gallon. Meanwhile, Arizona, Montana, Nebraska, South Dakota, Virginia, and Wisconsin are all averaging $2.05 or less, and they are likely be the next states to break the $2 barrier.

One gas station is charging $1.49 per gallon! It’s in Texas, as GasBuddy pointed out in a post that also noted that 45% of all gas stations in the country are charging under $2 per gallon. Remember that as recently as December, it was considered an extraordinarily big deal that any gas station was bold enough to cut prices below the $2 mark. We’ve reached the time when sub-$2 gas more or less seems standard—and when the average of one month ago ($2.60) seems high, even though that’s roughly $1 cheaper than the year-long average in 2012.

Americans could save $75 billion on gas this year.
AAA analysts predicted that, compared to fuel costs in 2014, American drivers would collectively save “$50-$75 billion on gasoline in 2015 if prices remain low.” That forecast was made at the end of 2014, when the national average was $2.26 per gallon. Based on the continue swift decrease in prices, and by indicators such as the Saudi prince who said “we’re never going to see $100″ as the per-barrel price of oil ever again, it wouldn’t be surprising if we wind up on the high side of AAA’s predictions. Another 2015 gas price forecast, from GasBuddy, predicted recently that the national average would bottom out at $2.23 in January. We’re already 10¢ below that mark nationally.

Granted, the plummeting price of gas isn’t entirely good news for consumers. Studies—not to mention logic—indicate that cheap gas equates to more driving, and more driving is correlated to more traffic accidents and deaths on the road. What’s more, cheap gas provides an incentive against utilizing more environmentally-friendly, fuel-efficient hybrids and alternative-fuel cars, such as the Toyota Prius, which doesn’t save drivers as much in gas costs when gas is inexpensive.

Finally, the drop in gas prices has helped push the argument that gas taxes should be raised in order to fix America’s roads and address other infrastructure needs. Over the weekend, a New York Times editorial noted that in light of gas prices falling 40% since June, now is “the perfect time for Congress to overcome its longstanding terror of offending the nation’s motorists and raise the tax on gasoline and diesel fuel.”


How Cheap Gas Can Be Deadly

gas pump lying on ground
Shannon Fagan—Getty Images

Research shows that there's a correlation between low gas prices and increased traffic fatalities.

According to numbers crunched by the Oregonian, traffic fatalities in Oregon jumped 13% in 2014. Preliminary data shows that 352 people were killed in the state due to traffic accidents, up from 313 in 2013. Last year’s death total was the highest it’s been in Oregon since 2009, when there were 377 traffic fatalities.

At least some of the 2014 spike, the report surmises, can be attributed to gas prices falling lower and lower during the second half of the year. As gas gets cheaper, more drivers take to the roads, and the likelihood of accidents increases.

The phenomenon isn’t limited to Oregon. Earlier this week, NPR aired an interview with Guangqing Chi, a sociologist at South Dakota State University whose research reveals it’s a foregone conclusion that cheaper gas equates to more accidents (and deaths) on the roads. In one study, a 20¢ drop in gas prices in Minnesota was linked to an extra 15 deaths annually. In Chi’s hypothetical estimation, “a $2 drop in gasoline price can translate to about 9,000 road fatalities per year in the U.S.”

Still, there is no direct causation, and any surge in accidents in 2014 must be viewed in a historical context: There were routinely around 450 traffic fatalities in Oregon in the mid-’90s, so even with the recent jump in accidents, the roads are considerably safer a decade later. What’s more, several states, including Missouri, New York, Tennessee, and Vermont, are actually reporting a decrease in traffic fatalities coinciding with plummeting gas prices last year. It’s also unclear to what extent constant improvements in car design and safety features have helped keep fatality tallies down, but surely they factor in.

While Oregon’s traffic fatality spike shouldn’t be viewed as proof that cheaper gas causes more deaths, what we do know is that—generally speaking, over time—more drivers are out on the roads when prices are low at the pump, and more crowded roads mean more accidents. Chi’s research backs this theory up.

It’s not just that cheap gas encourages more people to hit the road, however. When gas is expensive, people are more likely to drive like Grandmas—accelerating slowly and cautiously, braking hard only when it’s absolutely necessary, using cruise control or just maintaining a steady speed on highways. Drivers may be doing so primarily because these techniques help you get the best fuel economy, but it’s also pretty obvious that driving in this manner is simply safer.

Driving like a jerk, on the other hand, has been shown to be costly in more ways than one. A 2012 GM study estimated that people who don’t bother with “smart driving” techniques like accelerating slowly and keeping the car at 70 mph rather than 80 mph on highways could expect to pay up to $100 more in gasoline per month. And it’s easy to see how speeding and stomping on the gas and brake pedals hard—which we’re more likely to do when gas prices are cheap—can result in more accidents.


President Obama Strongly Hints You’ll Regret Buying a Gas Guzzler

"Folks should enjoy" gas prices while they're low, the president said this week. But he warned it would be foolish to expect gas to stay cheap forever.

In an exclusive interview with the Detroit News, President Obama explained that while Americans “should enjoy” cheap gas prices across the country, long-term projections call for rising demand for oil in the U.S. and other parts of the world. Which means a return to higher fuel prices in the future is more or less inevitable.

Consequently, Obama said that it’s wise for Americans to operate—and spend, particularly in terms of big-ticket purchases—with the assumption that gas won’t be under $3 per gallon indefinitely. “I would strongly advise American consumers to continue to think about how you save money at the pump because it is good for the environment, it’s good for family pocketbooks and if you go back to old habits and suddenly gas is back at $3.50, you are going to not be real happy,” he said.

In reality, when you look at the auto sales trends of 2014, what with purchases of fuel-efficient hybrids like the Toyota Prius flagging while SUVs and luxury cars soar, it appears as if consumers have pretty much been doing the opposite of what the president is advising.

To be fair, consumers haven’t totally abandoned the idea that it’s smart to own a vehicle that gets good gas mileage. Today’s SUVs and trucks are far more fuel-efficient than they’ve been in the past, and it’s not like everyone is suddenly wishing they could drive 10 mpg Hummers again.

But there has been a shift to less fuel-efficient cars that’s coincided with plummeting gas prices. According to research by Michael Sivak and Brandon Schoettle of the University of Michigan Transportation Institute, in December new car purchases averaged 25.1 mpg, down from a high of 25.8 mpg in August. “These recent reductions likely reflect the large and continuing decreases in the price of gasoline,” the researchers stated.

Everything’s relative, of course. The December average of 25.1 mpg may be down compared to earlier months in 2014, but it still represents a vast improvement over prior years: The average was 24.8 mpg for 2013 as a whole, and around 21 mpg in 2008 and 2009.

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