AMES, Iowa -- Gas prices are on the rise again, creeping over $2.60 per gallon nationally last week according to official energy statistics from the U.S. government. Consumers have watched prices rise steadily since the start of the year and spike within the last month.
While the current price is about $1.40 less than last year at this time, many Americans have fewer discretionary dollars to spend on driving this summer because of the weak economy. So how high can they expect prices to go?
Iowa State University experts can help gauge where prices are headed and what impact they'll have in many related areas.
Biofuels pricing, production and federal policy
Chad Hart, grain markets specialist and professor in agricultural economics, (515) 294-9911, email@example.com
Hart can address all aspects of the economic realities facing biofuel producers under varying economic conditions. He can discuss the pricing of biofuels and biofuel feedstocks that may affect fuel prices at the pump. Hart also has expertise in biofuel policy on the federal level and what the industry will look like under the new administration.
John Miranowski, professor of agricultural economics and environmental and resource economics, director of the Institute of Science and Society and interim co-director of Iowa State's Biobased Industry Center, (515) 294- 6132, firstname.lastname@example.org
Miranowski says at current levels of biofuel production -- at least over the long run -- petroleum prices essentially determine the prices of biofuel. For example, gasoline prices below $2 per gallon in recent months have resulted in lower ethanol prices, and to some extent lower corn prices (although there are other factors operating in the corn market). Lower gasoline and diesel prices have led to lower biofuel prices and have been responsible for recent low and sometimes negative net returns for many biofuel firms.
Consumer behavior and family decision-making
Kay Palan, associate dean, associate professor of marketing, College of Business, (515) 294-9526, email@example.com
Palan studies consumer socialization and family decision-making. She can discuss how consumers' spending habits of both budgeted and discretionary income may be affected by rising energy costs. Palan also will explain how consumers view gasoline and energy in their family lives and how they may alter spending habits in light of price hikes. She teaches undergraduate and graduate classes on consumer behavior and strategic marketing.
Economics of rising fuel prices on consumer demand
David Frankel, associate professor of economics, (515) 321-2689 (cell), (515) 294-6263, firstname.lastname@example.org
Frankel sees rising fuel prices amid economic weakness being a product of steps taken by the Organization of the Petroleum Exporting Countries (OPEC) to restrict output in order to support the oil price. "OPEC's aim is to limit output enough to raise prices, but not so much to prevent economic recovery, since a prolonged recession is bad for their revenue as well," Frankel said. "Gas prices are still quite low versus a year ago, but the economy is still weak as well, so it's not clear whether or not we will be traveling more or less this summer."
Peter Orazem, University Professor of economics, (515) 294-8656, email@example.com
Orazem says the current economy has lowered incomes, and that may have a bigger impact on driving than gas prices. "While $4 gas in a recession would affect driving more than $4 gas in an expansion, we won't get $4 gas unless demand for it picks up, and that would only be in an expansion," he said.
Impact of high gas prices on alternative fuel research and development
Robert C. Brown, Iowa Farm Bureau director of the Bioeconomy Institute, Anson Marston Distinguished Professor in Engineering and Gary and Donna Hoover Chair in Mechanical Engineering, (515) 294-7934, firstname.lastname@example.org
Brown says high gas prices are good for research and development of alternative fuels. "Low energy prices slow the emergence of the bioeconomy, not to mention other alternative energy developments like wind and solar," he says. "Investors are more cautious when energy is cheap and users less interested in alternatives."
Impact of high fuel prices on transport industries
Yoshinori Suzuki, associate professor of logistics & supply chain management, College of Business, (515) 294-5577, email@example.com
Suzuki studies fuel management among trucking and other transport industries. He can discuss how the rising gas prices affect the cost of transporting goods and services and how that cost will impact prices to consumers. Suzuki recently developed a model for minimizing the fuel cost of truckload carriers.
Trade policies, commodity markets and biofuels
Bruce Babcock, professor in agricultural economics, director of the Center for Agricultural and Rural Development, (515) 294-6785, firstname.lastname@example.org
Babcock can discuss agricultural commodity markets, the impact of biofuel on United States and world agriculture, the development of risk management strategies for farmers, and the analysis of agricultural and trade policies.