What caused the recession?

Most intelligent people are aware that the recession began the last year that Clinton was in office. It began because most of the dot.coms failed. Whose fault it was, who knows? Why were they so inflated in the beginning? As for gas prices, wouldn't a president with oil connections have something to do with the price of gasoline? When the west coast had very high electricity prices and shortages, Bush did very little to help. Hoover didn't cause the Great Depression, but he did little to help those who were affected by it. That is why he was blamed.

Most intelligent people are aware that the recession began the last year that Clinton was in office.

You are wrong with that.  There are a lot of intelligent people who blame Bush.  They may be ignorant to what happened in the Clinton administration, but that does not mean that they are not intelligent.  We obviously have a lot of dumb asses in the world if what you just said is true.

As for gas prices, wouldn't a president with oil connections have something to do with the price of gasoline?

Are you not intelligent because you don't know the answer to that?   Do you know *why* gas prices are the way they are?  It's because environmental lobbyist got a lot of the refineries shut down.  We have too few refineries in comparison to how much fuel we use. (Those SUV's are "needed" in our lifestyle, ya' know)  Since we have to rely on outsourcing refining, it costs us more money.  It's not the raw fuel that costs us so much.  The other bit that causes gas to be expensive is the federal and state taxes.  State taxes are different per state which causes the cost of gas to be different per state.  If *States* would ease up on some of their taxes (which are typically higher than the federal taxes) that would help, also,  The President has no control over that aspect of it since it is determined per state.  He also can't get the refineries open again because of the standards that are now in place.

Power is handled by businesses.  The government can't step in every time a business has issues.  It may be something that we see as necessary for life, but I really don't see how we could have expected the *federal* government to get involved. 

The recession started right around the changing between Clinton and Bush....when the dot com bubble burst. I really don't think the president plays a huge role in the economy. He really only does a lot in certain situations. FDR got things done during the depression, that was needed. Otherwise there are just a few times when the president really does a lot to interfere, we get things like Bush's tax cuts. Mostly the economy goes up and down on its own. It just happened to go down quite a lot during Bush, and now its going back up. The tax cuts probably helped it to rise, but I think it probably would have gone up anyway.

Did you know that OPEC has a lot to do with the prices of our oil?

OPEC does have *a lot* to do with crude oil.  But, look at the oil prices themselves and compare them to the dramatic change in Fuel prices (ie: gas and diesel).   Crude oil only equates to 40 -50% of the cost of fuel.  The rest is refining nd taxes.  The more we have to pay for refining, the more the fuel is going to cost which will raise the tax base on that fuel.  Before 9/11, crude oil was around $18 a gallon and gas prices were around.  Afterward, it was over double that, but gas prices did not double.  Why?  Because the refining still cost the same and a lot of states reduced their taxes to alleviate the additional costs.  None of this has to do with *any* president.  More refineries and les taxes *would* help since they do constitute 50 - 60% of the price of gas.

The argument is not that tax cuts, in and of themselves, are bad for the economy. It's that tax cuts could have been structured differently to have had more of a stimulative effect. Tax cuts for the rich create less spending than tax cuts for the poor--this is simple empirical fact. If you want short-term stimulus in a recession, you don't give tax cuts to the rich who will (on average) just put it in the bank, you give them to the middle and working class who have had to cut back their consumption. Stimulating the economy by cutting taxes on the rich is the most inefficient way to stimulate the economy--that's why we have a $500 billion deficit right now. This is not to say there aren't benefits to tax cuts for the rich, but short-term economic stimulus is not one of them.

In the short term, gas prices follow world prices for crude oil. You can't blame environmentalists for peaks and valleys in gas prices over the time-scale of a year or two.

What happened to the fuel efficiency laws?

the recession start date is in dispute. the NBER(a non partisan organization that is usually the one that people depend on to "declare" a recession) originally said it started a short time after bush was president. bush's economic advisors claim it started before. NBER is currently reviewing the data. not sure if it has said anything new.

spinsanity.org

However, the Business Cycle Dating Committee of the National Bureau of Economic Research, a standing body of top economists recognized as the quasi-official authority on the timing of recessions, dates the beginning of the downturn to March 2001. ... Things changed after the Commerce Department's July 2002 release of revised data showing negative growth in the first three quarters of 2001, however. Bush, Vice President Cheney, and former White House spokesman Ari Fleischer all began claiming that the economy was in recession when Bush took office. But the definition of a recession they relied on - two consecutive quarters of negative GDP growth - is a crude one not accepted by the NBER committee, which states that it "gives relatively little weight to real GDP because it is only measured quarterly and it is subject to continuing, large revisions." Of course, the findings of the committee are not infallible; Bush and his economists are entitled to dispute them, and the NBER body may turn out to be wrong. (NBER recently reviewed the March 2001 start date, but postponed a decision on changing it until more data are available.)

article that quoted business week(which i read somewhere but can't find anymore)

(BusinessWeek’s Michael J. Mandel) Mandel wrote, it "masks an attack on one of the few remaining bastions of economic neutrality. For almost 75 years, the start and end dates of recessions have been set by the National Bureau of Economic Research (NBER), a private nonpartisan research group based in Cambridge, Mass."

In the short term, gas prices follow world prices for crude oil. You can't blame environmentalists for peaks and valleys in gas prices over the time-scale of a year or two.

Really, they don't.  If that were true, the UK wouldn't be paying $6.40 a gallon for gas.  The UK isn't big on refining, and they get taxed more.  The US is the same way.  Crude oil prices in 1990 averaged $22 per barrel.  What was the average gas price? $1.05 per gallon.  The average price in 1999 for crude oil was $17.50 per gallon.  Average gas price?  $1.35.   Why did that happen?  In the mid to late 90's refiners were closed down. 

Stimulating the economy by cutting taxes on the rich is the most inefficient way to stimulate the economy--that's why we have a $500 billion deficit right now.

The current tax cuts don't benefit the rich anymore than anyone else.  And a question: which is better: 1) running a deficit or 2) having more unemployment and more people on assistance?   If you note, the country is bouncing back from the recession quite well.

On gas: the key point is *short term fluctuations.* There hasn't been any dramatic change in environmental policy in the past couple years--if anything there's been a drift toward subsidizing the energy industry--so you shouldn't blame enivronmentalism for the short term changes in gas prices of the past few years. Unless you're arguing that the country's refining capacity has shrunk dramatically over the last few months.

Countries which have consistenly pursued different policies over many decades, like England and the US, should obviously see different results. (Let me also note that in European countries where tax is the bulk of the gas price, the correlation between crude oil price and gas price may not hold.)

The current tax cuts don't benefit the rich anymore than anyone else

Debatable--depends on how you measure it, I suppose. But irrelevant. The argument is that letting the rich keep more money is worse from the perspective of short term stimulus than letting the poor keep more money. If 40% of the tax cuts go to the top 1% (a reasonable estimate from what I've heard), that's 40% of the tax cuts being wasted from the perspective of fiscal stimulus. There are valid arguments for the tax cuts, but this isn't one of them.

My point wasn't about short term gas prices.  I also don't look at short term taxes or economy.  Short term thinking doesn't ever solve a long term issue.  Compare gas prices today.  Crude oil is at about $30 per barrel.  Average gas is $1.74 (conservatively).  1990 crude oil = $22 and gas was $1.05.  What changed?   $8 per barrel does not equate to $.69 per gallon more.  I'm more interested in finding long term solutions than short term band-aids.

Okay, point by point.

You argued,

"what has been getting us out of the slump? The changes in tax policies and low interest rates. People blame Bush and his tax cuts for the current state of the economy, but those tax cuts are what is pulling us out. It is also a long term plan."

This seems to me to be a classic Keynsian argument about how to deal with short-term fluctuations in the economy—during a recession, you cut taxes, so people spend more, which means demand for products grows, which means economic growth occurs. If this is your argument, then tax cuts for the poor are more effective than tax cuts for the rich, because the rich can save more of their income than the poor. Am I misreading you? Are we maybe disagreeing on definitions for “short term” and “long term”?

What do I think hammered the last nail into the economic coffin? Gas prices. Things didn't get too bad until gas prices raised so dramatically.

You then blame the ensuing recession on environmentalists closing refineries, as opposed to, say, geopolitical uncertainty. I find this implausible. Here's why.

Let's look at gas prices in real dollars (stripping out inflation which is irrelevant):

source:
http://oregonstate.edu/Dept/pol_sci/fac/sahr/gasol.htm

First, note that gas prices were roughly constant—indeed, trending downward—throughout the Clinton presidency. Prices spiked in 2001—I assume this is what you are referring to. So we have a jump over the course of *one year*.

For your explanation of environmentalists closing refineries being the cause of price fluctuations to be plausible, you need to show that there were a large number refinery closings in 2000 and early 2001, and that this number is large *compared to* the number of closings in the years prior and since. Agreed? If so, do you have any evidence for this? I don't, and I looked, but maybe you can find something I missed.

If you think that refining capacity is the primary determinant of price, you also need to defend the fact that gas prices are lower now than they were in 1990 once you account for inflation, in spite of the fact that no refineries have been built in the US in that time.

Finally, you can take a look at the following paper on the Federal Reserve site (which I hope you will accept as a neutral source):

http://www.dallasfed.org/research/efr/2000/efr0003b.pdf

The whole paper is about correlations between crude oil prices and gas prices. Figure 1 shows a nice correlation between them. Also, the graphic on page 26 shows that we can break down the price of retail gasoline as follows:

crude oil: 44%
taxes: 27%
distribution, marketing, profits: 16%
refining costs: 13%

I don't see how you can argue that variations in that 13% for refining are driving the variations in price. You'd need it to vary from 13 to 50 percent or more (all else equal).

Crude oil is at about $30 per barrel. Average gas is $1.74 (conservatively). 1990 crude oil = $22 and gas was $1.05. What changed? $8 per barrel does not equate to $.69 per gallon more

Iraq's invasion of Kuwait made 1990 an anomalous year in a lot of ways, especially in the oil markets. If you pick another year--*any* other year--the discrepancy is less. Picking 1996 (at random),

1996: gas prices about $1.40, crude oil about $20.
Today: gas prices about $1.74, crude oil about $30.

So crude oil has gone up by 50% or 1/2. If you presume crude oil accounts for 44% of the price of gas like the Fed says, you see that gasoline prices should have increased by 44%*50% or 22%. The actual difference in gas price is 21%.

I really did pick that one at random! But anyway, looking at other years shows a good correlation between crude oil and retail gas prices, not as good as 1996, but still good. Agreement in other years isn't quite as good but it's generally pretty strong.

(crude oil prices from: http://www.rrojasdatabank.org/tab12.htm or any of a dozen other sites, gas prices from graph referenced earlier)

This seems to me to be a classic Keynsian argument about how to deal with short-term fluctuations in the economy—during a recession, you cut taxes, so people spend more, which means demand for products grows, which means economic growth occurs. If this is your argument, then tax cuts for the poor are more effective than tax cuts for the rich, because the rich can save more of their income than the poor. Am I misreading you? Are we maybe disagreeing on definitions for “short term” and “long term”?

I am saying that you need to cut taxes across the board.  I think you are naive to think that the rich won't spend their tax cuts.  You think that they won't buy a new boat (you know how many people it takes to build one?) or a bigger house, etc?  No matter what walk of life you come from, you will still spend money.  If you want more discussion about this same topic, please visit Brad Wardell's article at: http://draginol.joeuser.com/index.asp?AID=10867

You then blame the ensuing recession on environmentalists closing refineries, as opposed to, say, geopolitical uncertainty. I find this implausible.

It's still happening today.  Read this article: http://www.iht.com/articles/510679.html  They state: "Prices at American gasoline pumps are expected to rise to record levels this spring and summer, as the possibility of disruptions in oil supplies and stricter environmental regulations add to a steep climb already seen this year." and "Other factors are contributing to higher gasoline prices, too.  The most prominent may be the need for refineries to comply with environmental regulations"

The environmental regulations are nothing new.  Just as the EPA regulations get stricter every year for engines, so does it on fuel refining.  Refineries have to close down if they can not comply.  The fewer the refineries, the higher the cost of refining.  This is also something that we need to keep in mind as it is currently an issue.

1990 was the dawn of the refinery changes.  The 90's brought higher costs in Gas. 

You can read more about the refinery issue at:
http://www.eia.doe.gov/emeu/perfpro/ref_pi/environ.pdf
http://www.theolympian.com/home/news/20040307/topstories/9514.shtml
http://www.planetark.com/dailynewsstory.cfm/newsid/22905/newsDate/21-Nov-2003/story.htm
http://www.rgj.com/news/stories/html/2004/03/07/65666.php

 

think you are naive to think that the rich won't spend their tax cuts. You think that they won't buy a new boat (you know how many people it takes to build one?) or a bigger house, etc

Note that I said that the poor spend a larger *fraction* of their income than the rich, not that the rich save all their income.

It's still happening today. Read this article: http://www.iht.com/articles/510679.html They state: "Prices at American gasoline pumps are expected to rise to record levels this spring and summer, as the possibility of disruptions in oil supplies and stricter environmental regulations add to a steep climb already seen this year." and "Other factors are contributing to higher gasoline prices, too. The most prominent may be the need for refineries to comply with environmental regulations"

Are we reading the same article??

It says "the most important factor driving the price of gasoline is the cost of crude oil." Which supports my position and disagrees with yours.
It proceeds to talk about crude oil prices and disruptions in the world market for five paragraphs, before getting to the one paragraph about "other factors" which includes environmental regulation. It's clear from the context that this is a secondary issue.
It also talks about increased demand driving price, which makes sense.
It concludes by saying that the price of gasoline has gone way down since the 1980s.

I truly don't see why you think that article supports your contention that refining costs are the primary cause of higher gas prices when it says that crude oil prices are the "most important factor" as well as (implicitly) inflation. Could you clarify your interpretation of this?

http://www.eia.doe.gov/emeu/perfpro/ref_pi/environ.pdf

Again, I'm forced to wonder if we're reading the same article, which seems to clinch things in my favor. Paragraph 3 of the introduction:

"about 5 percent of the $1.52 ($1995) per barrel decline in the majors' net cash margin from US refining and marketing operations came from increased operating costs traceable to pollution abatement. Further, or the 12 percentage point decline over the 1988 to 1995 period in the return on investment ot the majors' US refining/marketing operations, slightly over 1 percentage point can be attributed to increased capital expenditures and operating costs for polluion abatement."

So pollution abatement cost 7 cents per barrel (one barrel is 42 gallons). "Based on these results, the direct effects on operating costs of hightened environemntal standards from 1990 on appear to have had only a small role in the deterioration of cash margins in U.S. refining."

It also says "the main factor affecting margin from 1988 on has been a near continual decline in the spread between refined product prices and raw material input costs." (Title of last section.)

In short, that article seems to conclude that extra refining costs due to environmental regulation are quite small. Are you interpreting it differently? If so, could you be more specific in your interpretation? What part of the article are you thinking of?

The third link is about temporary regional price swings. Nothing it says has much bearing on overall nationwide price levels.
The fourth one says nothing at all about overall gas prices, just noting that certain small plants will close, and that volatility may occur.
The fifth one is the same as the third one, with a couple quotes added.

In short, I don't understand how any of these links support the contention that environmental regulations are the primary determinant of gas prices.

You also have not addressed any of the arguments made in my previous comment. I would appreciate it if you would do so.

n short, that article seems to conclude that extra refining costs due to environmental regulation are quite small. Are you interpreting it differently? If so, could you be more specific in your interpretation? What part of the article are you thinking of?

I think you are reading that study wrong.  They aren't talking about the decline in cost to the consumer, they are talking about the decline in profit that they make, which causes them to close more refineries.

Other bits in those articles:
"- California gas prices have risen 40 cents since Jan. 1 to more than $2 a gallon as refineries cut outflow to switch from winter to summer blends"

"- Gas prices shot up 50 cents a gallon in Chicago in 2000 because of refinery problems."

"But few short-term solutions are on the horizon. Most energy companies have no plans to build U.S. refineries, and Shell Oil plans to close one in Bakersfield, Calif., this summer. "

"California's tight refinery capacity and strict environmental regulations regularly make its prices among the highest in the nation."

" Drivers should brace themselves for the kind of price swings at the pump that Californians are seeing, experts say, in large part because there are fewer U.S. refineries trying to keep up with increasing demand for gasoline."

You are right- we are obviously not reading the same articles....

You also have not addressed any of the arguments made in my previous comment.

What arguments?  I don't see any other valid points that you have made other than the stuff that I decided to comment on.

I would appreciate it if you would do so.

Dude, this is a blog......  I think you are taking yourself (and this discussion) a bit too seriously.  Take a break or something

 

This is a blog, but it's on a site intended for serious political discussion. You've highlighted the points which support your arguement, something any good debater would do, but the thing is, vincible talks about them in context, which you do not. I've read the article, and the context supports vincible's points more than yours.

Cheers

This is a blog, but it's on a site intended for serious political discussion.

Actually, it's just a blog.  How serious you take it is up to you.  Anyone who gets too serious about debating on a blog needs to step away from it for a bit.

I've read the article, and the context supports vincible's points more than yours.

Did you read all the articles that I highlighted?  Should I have pulled info and sighted each one.   Trust me, I am not the only one that has this opinion.  I also have kept it in mind when I saw a local refinery close in 1998 and read an article in a local paper written about how it will effect jobs, local economy, and how it was only one of many that would close withing the next 15 years.  That was a long term prediction.  A prediction that is showing through in the current gas prices in California.

One of the other articles that I quoted:

http://www.rgj.com/news/stories/html/2004/03/07/65666.php

'“The third quarter is going to be wild,” Kloza said. “The problem with gas isn’t a problem with crude. It’s a problem of domestic refining capability.”

Oil companies cut back refineries in the late 1990s and have enjoyed higher profits and little state or federal oversight, said Charles Langley of the Utility Consumers Action Network in San Diego. The situation is similar to the electricity shortage that hit the West in 2001, when a generator went out of service for maintenance and prices soared.'

If you don't see my point of view, that is fine.  But, it's going to bite us all in the butt.  People want to think that it is as easy as a crude oil issue, but it's not.  We are in spiral of gas cost.  The EPA has higher standard on gas cleanliness, emission standards, and refinery pollution.   The gas is less efficient, the engines are less efficient, and the refineries won't spend the money to update, and the standards make it almost impossible to build new ones.  If you can't see how that effects us all (and the economy) then I am wasting my breath.

My diction is naturally serious. It's just how I've been trained to write. You shouldn't take it as an indication of what I'm feeling.

What arguments? I don't see any other valid points

There are lots of things you're saying that I think are invalid, but that doesn't mean I ignore large portions of your post.

Maybe you could explain why my points are invalid? The decline in gasoline prices after accounting for inflation, *in spite of* increased environmental regulation? The graph that I linked to showing a beautiful correlation between crude oil prices and retail gasoline prices? The Fed paper saying that refining costs accounted for just 13% retail gasoline costs, and crude oil was almost half? I don't see why you cavalierly dismiss these as not worth talking about.

I think you are reading that study wrong. They aren't talking about the decline in cost to the consumer, they are talking about the decline in profit that they make, which causes them to close more refineries.

Yes, they conclude that compliance costs are very small for refineries, *compared to* other factors. "The main factor affecting margin from 1988 on has been a near continual decline in the spread between refined product prices and raw material input costs." So if anything's causing refineries to close, it's the decline in the spread between output costs and input costs.

It explicitly says that only 9% of the decline in return on investment for oil companies is due to increased environmental regulation. So 91% is due to other factors. Why do you single out environmental regulation for special blame?


Finally, I will reiterate that the things you cite--California, Chicago, etc--again, are temporary and regional price swings. Obviously if a refinery closes temporarily or cuts output, there will be a price jump in the area. But most of the nation doesn't feel it. Remember that we're talking about nationwide prices here, at least, if you're going to blame the recession on gas prices you need a nationwide price jump.

What happened to fuel efficiency laws?

As far as I know, there's been no major change to fuel efficiency laws in the past several years.

Remember that we're talking about nationwide prices here, at least, if you're going to blame the recession on gas prices you need a nationwide price jump

See, that is where you are wrong.  I am not blaming the recession on gas prices (notice the first part of the article that keeps getting overlooked).  I said that it "hammered the last nail into the economic coffin".  There is a difference.  The difference is that we were already in trouble.  Gas prices were on the rise, which was passed down to the consumer in the way of delivery charges (either directly or indirectly).  Truckers lost jobs (have you looked at the trucking industry lately) and people started spending more money on gas and less on other things (still takes the same miles to get back in forth to work).

Finally, I will reiterate that the things you cite--California, Chicago, etc--again, are temporary and regional price swings.

If the California refinery closes, it will close for good.  And, it will effect the national average.

If you want to read a real fruitcake article that takes my stance to a ridiculous new level, read this:http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=37772

Then there is this rumor that the EPA is going to require all gas to have ethanol in it.  I thought it was a total rumor until I read this:
http://www.senate.gov/~schumer/SchumerWebsite/pressroom/press_releases/PR02466.html (Though it appears to be only 1/5 of the states, currently).

Why would ethanol be an issue?  Because the MPG is lower.  It's not much (like 2 - 3%) but it takes more expense to get it to the pump, so you will end up paying more and getting less.

 

 

Reply #18 By: JeremyG - 3/29/2004 3:11:43 PM What happened to fuel efficiency laws?

They exchanged fuel efficiency with emissions.  If we were actually into fuel efficiency, we would all drive cars like the Jetta TDI (diesel).  But, because diesel is smellier than gas, people assume that it has more emissions, but it doesn't.  It is also cheaper because it is not as refined.  You also can get 50 mpg with the Jetta, but people rather drive the SUV's and complain because our gas supply can't keep up with our demand.

And that, I think more than refineries being shut down is why gas prices are so high. I get 60 mpg on my little hybrid car but I know people who drive Expeditions that get 10.

Cheers

If you want to read a real fruitcake article that takes my stance to a ridiculous new level, read this:http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=37772

I hate to sound like a broken record, but even the main thrust of this article is about crude oil prices. It's all about the need for increased drilling. If increased drilling was to have an effect, it would be to increase domestic crude oil production. This would drive down crude oil prices and therefore gasonline prices.

There's just one lonely paragraph about refining.

KarmaGirl, I'm not going to continue this conversation until you choose to address some--heck, any--of the evidence that's been cited regarding the correlation between gasoline prices and crude oil prices. For every quote in this thread saying "environmental regulations on refineries drive up prices" there are five that say that "other factors affect prices a lot more"--often in articles that you have linked, and which you appear to read extremely selectively, mining for data that fits your conclusions. I've cited several types of numerical data backing up the relationship between crude oil prices and gas prices nationwide, and you've chosen not to respond to these data. My time is too valuable to continue writing comments which, I can only conclude, will continue to be ignored. Good day.

KarmaGirl, I'm not going to continue this conversation until you choose to address some

That's fine with me.  The main thrust of my article wasn't supposed to be about gas, anyway.  The other part was my opinion and what I have seen and experienced.  I also hear a lot of inside news from the engineers that I know from the big three and a company that designs a lot of the worlds diesel engines.  It is my opinion that there is a bigger problem with refining than what you are seeing.  I am not the only one with that opinion (as quoted above). 

My time is too valuable to continue writing comments which, I can only conclude, will continue to be ignored.

right back at ya'   But, I would also have to ask- why did you spend so much time on it, anyway?  Since there is info on both sides, and it's my opinion (which was stated from the beginning) why spend so much time on it if your time is too valuable?

Reply #22 By: jeblackstar - 3/29/2004 4:51:43 PM And that, I think more than refineries being shut down is why gas prices are so high. I get 60 mpg on my little hybrid car but I know people who drive Expeditions that get 10.

But, that is a catch 22.  The more fuel that is needed, the more refineries are needed to produce it.  It's a long term problem.  The EPA has stricter and stricter regulations on both the engines and the refineries.  Tighter emissions = less fuel efficient cars which require more fuel causing a bigger strain on the refineries.  Until they come up with full size hybrids that will perform as well as a gas engine, I can't see any of that changing.

A matter of we are all in this together.

Tighter emissions = less fuel efficient cars which require more fuel causing a bigger strain on the refineries.

http://www.ineed2know.org/clean_cars.htm



"Reducing fuel consumption helps the environment in many ways. Each step in the fuel production and distribution chain - drilling, transporting, refining, and so on - can result in environmental pollution. Increased fuel consumption directly affects the amount of carbon dioxide (CO2) emissions and tends to increase some other pollutants, such as nitrogen oxide (NOx) and evaporative hydrocarbons. Carbon monoxide (CO) and exhaust hydrocarbon emissions are closely related to how a vehicle is driven and how its emission controls are functioning."

http://www.gatewaycleanair.com/mechanic/air3_4/air3_4.htm

"Cutting Down on Car Trips Doesn't Just Save Gas!It reduces pollution: In Washington, motor vehicles account for 43% of our air pollution. ( This is more than the pollution caused by industry, wood stoves, and outdoor burning.) Overall, car emissions are responsible for 45% of the nitrogen oxide and 33% of the hydrocarbons that produce smog, acid rain, and the ozone problem.It reduces dependence on foreign oil: Of approximately 8.5 million barrels of imported oil used daily in the U.S., 24%, or 2 million barrels, are used by passenger cars.It reduces the likelihood of global warming: Car emissions contribute 75% of the carbon dioxide in the atmosphere, the pollutant that promotes global warming via the greenhouse effect.It reduces health care costs: According to the American Lung association, air pollution costs the nation's taxpayers about $40 billion annually in health careIt reduces agricultural damage: Crop losses due to ozone damage are estimated to cost between $1.9 and $4.5 billion a year."

http://cru.cahe.wsu.edu/CEPublications/eb1843e/eb1843e.html