Is gasoline about to hit $3.40 a gallon?

The Associated Press

More pain at the pumps?

Featured Topic | Posted 40 weeks 2 days ago

Is gasoline about to hit $3.40 a gallon?

The federal Energy Information Administration on Tuesday projected the price of regular gasoline, now averaging $2.96 a gallon nationwide, will hit a monthly average near $3.40 by spring.

What will higher gasoline prices mean for Americans' driving habits? What will it mean for the economy?

Ben likes: Ethanol fetish leaves bellies running on "E"

David A. Ridenour/Investor's Business Daily

A region that once produced much of American's food and sent its surpluses to feed the world's hungry is now producing grain for automotive fuel — the beneficiary of earmarks from the Capitol Hill friends of prairie farmers.

"Nearly $93 billion in subsidies will flow to ethanol and biodiesel producers by 2012," says Tom Tanton, a fellow in environment studies at San Francisco's Pacific Research Institute. The subsidies will cover about 50% to 65% of ethanol's market value alone — sticking taxpayers for a tab they will have to pay again at the gas station pump.

Joel likes: Frying pan or fire?

Matt Yglesias/The Atlantic

I think it's increasingly clear that totally irrespective of global warming the quest for alternatives to to the gasoline economy is going to be on in a big way. Absent some economic calamity in the developing world, demand -- and thus, prices -- seem destined to keep trending basically upwards. But while gasoline is hardly environmentally friendly, burning it's not the worst thing one can do for the planet either. The question is, will the replacement be a step forward or backwards?