Will fuel prices keep going up?

[Chicago]

Well guys,

I am working on my wings and have the tail finished. I am about ready to order my fuselage but I am thinking about throwing in the towel because I am just not sure if I can afford to keep the plane flying in a few years with the way gas prices are today. Will gas prices keep me grounded when I'm ready to fly in a few years? I can only imagine what 100LL is going to be in the future and I am already sacrificing a ton of money to build this plane. I am about $13K in so far with my kit, tools and misc. parts for my project. Should I get out now and sell while I'm in relatively cheap or should I drop everything I have over then next few years and then find out its going to cost me hundreds later in fuel every flight?

[Lionclaw]

You have to spend your money on something...

I don't like where things are heading either, although I'm hoping all of this over speculation on oil will eventually collapse and the price will drop. Otherwise, there's always a chance for alternative powerplant options in the future. That's one reason I didn't want to dump a whole lot of money into a nice new engine.

I'm pretty much in the same boat. Wings almost done, about to order fuse. I'm worried about the price of gas, but I'm not gonna pack it up and head home just because of what might happen. I suppose if gas skyrockets I just won't get to fly as much as I'd like.

[RScott]

The straight answer: No one knows.

You will get used to today's prices. I grew up on $.329 per gallon with frequent price wars dropping the price to 19 cents or even lower.

The 1973 price increases to about 65 cents stunned us, but we got used to it. Same when it went to 85 cents. Somewhere in the late 80's there was a crash in the oil industry and we saw some relief, Houston almost became a ghost town, but prices went back up again as people bought bigger cars and other factors kicked in.

We got used to those prices and we'll get used to the prices we pay today. Europeans have long been used to expensive gas, and they still drive. There will be adjustments, maybe even down a little now and then.

Some differences: 35 years ago, 80% of the world oil supply was controlled by corporations, today 80% is controlled by governments. Typically, state owned industries focus on keeping people employed, fail to invest in new technology or capacity expansion, fail to respond to markets, fail even to maintain equipment. 35 years ago, few people in China or India had cars, China exported oil, now they import it. Now, in Chengdu near where the earthquake hit, they have 3 ring roads around the city, Portland, Oregon has one. This suggests increased demand and shortages in the future. But with the current higher prices, surpluses are accumulating. There is a huge amount of oil under Colorado in shale, also in tar sands in Canada and off US shores in the continental shelf. People are buying smaller vehicles, but it takes about ten years to replace most of the US fleet. Then there are the unknowables: Will there be another mideast war or other disruption? Will the Congress get their heads screwed on straight and do something sensible about increasing supply, such as letting us get at the oil we have? (Oops, I'm talking about Congress here and sensible doesn't even belong in the same sentence.) Will increased prices stimulate exploration and bring new fields online? Will new technology allow cheap recovery of more oil from existing fields? Will we convert to fuel cells? Will we figure out a way to get oil from coal cheaply? How soon will we be getting diesel from algae, which is supposed to have the potential to produce 100,000 gallons a year per acre?

Again, the straight answer: No one knows.

[N23J]

If it's not fuel it's insurance or time or braces or vet bills or honey do stuff.
The list goes on and on. Fuel will continue to rise. You will find a way to supplement you income and fly some how. We all do. If you give up on your dream then thats all it will be a dream or worse ... I should of. It's up to you but I say "never give up and never surrender"
Alan

[asav8tor]

150 years ago...... no one got to do this

150 years from now...... ?

It's your chance and your turn right now in the span of human history to do something truly amazing.

Philosophy lesson over, Econ to follow:

Sample problem, fuel price uncertain.

Buy a future gasoline contract for delivery at the estimated time the aircraft will be ready to fly. One of 3 things will happen.

1. Market price for gas goes up; Sell the contract and use the profits to buy airplane gas.

2. Market price for gas goes down; Sell the contract at a loss and buy cheap airplane gas.

3. Market price for gas remains the same; Sell the contract and buy airplane gas.

Your problem is now solved (fuel price uncertain). There will be a cost for the insurance to do this but that's the idea behind insurance, limit your risk and sleep well.

[SpacemanSpiff]

Originally Posted by RScott

You will get used to today's prices. I grew up on $.329 per gallon with frequent price wars dropping the price to 19 cents or even lower.

The 1973 price increases to about 65 cents stunned us, but we got used to it. Same when it went to 85 cents. Somewhere in the late 80's there was a crash in the oil industry and we saw some relief, Houston almost became a ghost town, but prices went back up again as people bought bigger cars and other factors kicked in.

I don't know... I've lived through those price increases you mentioned, and this seems to be much bigger. When gas went past $3 I was shocked. Now it's a year later and we're almost to $4 (many people already are), and there doesn't seem to be any sign of it slowing down. I've never seriously considered riding my bike to work in 95 degree heat and 90+% humidity until now.

I am planning on starting my RV-8 this fall and the choice of an engine is a big unknown for me now. I'm hoping that something will sort itself out by the time I get to that stage. I think 100LL engines will start phasing out in a few years, and it will be harder and harder to justify an engine that runs on 100LL. If I can find a reliable alternative fuel engine with ~200 hp, and runs off of reasonably priced fuel, I will definitely go for it.

[szicree]

Don't know if it helps to know this, but in 1981 the average price for auto gas was actually $3.21 (adjusted for inflation). I guess my point is that we have had very high prices in the past and we survived.

[leeschaumberg]

Keep building your RV. Things are changing but a built and flyable RV is not. You may have to up grade your engine to use plant oil. Thats PO1 or some thing. Many people argue about this but keep your mind open. Go to Oshkosh and keep up with what's out there. Mean while keep bucking those rivets. If I knew what 10 years will bring I'd be happy to tell you!

[Randy Walls]

I went through the same period of doubt, for much the same reasons about two weeks ago. I decided to keep going because things always seem to work out somehow. If an RV is what you want you will make it work.
One thing I have learned is that nothing ever stays the same (except the incompetence and greed of politicians) people are using less fuel now, prices will come down, or you will will get used to them, or something.
Just for giggles my first aviation job was being a lineman and pumping gas. 80 octane avgas was 35.9 cents a gallon, of course I made about $200 a month so it was still expensive.
Don't give up!

[Brantel]

Originally Posted by szicree

Don't know if it helps to know this, but in 1981 the average price for auto gas was actually $3.21 (adjusted for inflation). I guess my point is that we have had very high prices in the past and we survived.

The thing about prices adjusted for inflation is that they never contrast this with the fact that wages have been falling behind inflation by an average of about 5%. That 5% hurts!