INTRODUCTION

pump handleWhat travels the distance of 14,000 round trips to the sun per year? Answer: American vehicles! Yep! No kidding. We drive more than 2.6 trillion miles per year in cars, trucks and SUVs. In our personal vehicles we fill up 115 billion gallons--yes, that's with a "B" of gasoline and diesel fuel PER YEAR.

We all watch the prices at the local pumps as closely as the price of a gallon of milk, a loaf of bread or a Whopper sandwich, yet statistics report that our average fuel economy of cars and light trucks is at the lowest level since 1980! Well, just how did that happen?

TASK

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In this lesson you will be able to provide an explanation as to why per gallon prices seem to jump just before a holiday or weekend, review historical data on gas prices, and create a graph to represent the data. You will also be able to identify the factors that influence the price of a gallon of gasoline.

PROCESS

1. Read the article: "How Gas Prices Work". Print the article for easy reference and include it in your Student Research Log

Use the U.S. Department of Energy web site to print out today’s Gasoline Update for you records.

Use the U.S. Department of Energy Oil Refineries to learn more about the production of today's oil refineries.

gas pump2. Print and use the following chart to compare gas prices over a fifty year span. Remember to use the X axis for years, and the Y axis for price.

Think about and answer the following questions:

  1. What happened in the 1970s to gasoline prices and why?
     
  2. What has happened to the real price of gasoline?
     
  3. What effect would that change have on purchases of automobiles?
     
  4. What signal did this send to consumers?
     
  5. How did consumers react in their choices of vehicles?

3. After reading the article "How Gas Prices Work" - go back to your Student Research Log and answer the following questions:

  • Hong Kong and Seoul, South Korea are relatively near Indonesia. Why is there such a large per-gallon difference in prices?
  • What generalization could be made about the countries with the least expensive price for a gallon of gasoline?
  • What generalization could be made about the countries with the most expensive price for a gallon of gasoline?

CONCLUSION

gas canHere are two mysteries for you to solve:

  • If the United States is the second largest producer of oil in the world, why are we importing so much petroleum?
  • In petroleum markets, if you want to make more money, you sell more barrels of oil. Is this statement true or false? Prepare a short explanation defending your position.