High gasoline prices spur customers to seek other options

(This article originally ran in New Orleans CityBusiness, New Orleans, Louisiana, another Dolan Media publication).

New Orleans Saints safety Steve Gleason avoids rising oil prices by refusing to put gasoline in his car.

Gleason drives a 2001 Volkswagen Jetta, which gets 50 miles per gallon on a vegetable oil and methanol-based fuel called biodiesel.

As rising oil and gas prices continue to reach record highs, hybrid and alternative fuel vehicles are gaining popularity.

Market forces drive this country more than an earnest desire to be good but gas prices are rising and people are looking for alternatives, Gleason said. They're realizing there is a smarter, better way to fuel our cars, trucks and buses.

Known for being environmentally friendly and greatly improving gas mileage, hybrids combine two or more sources of power, generally gasoline and electricity. Alternative-fuel vehicles run on vegetable oils, grain alcohols such as methanol, gases such as hydrogen, and electricity.

More than 84,000 hybrid vehicles were sold in the United States last year, according to greencarcongress.com, a Web site on automotive technology.

Automotive research firm J.D. Power and Associates estimates 220,000 hybrids will be sold this year and more than 500,000 will be sold annually by 2008 as dealers begin to offer more hybrid models.

The U.S. Department of Energy reported record pump prices averaged $2.11 a gallon last week - an all-time high in nominal terms - though in inflation-adjusted terms the peak was much higher at $3.08 in March 1981.

The average retail price for all three grades increased 12.74 cents to $2.13 per gallon between March 4 and March 18, with the most popular grade - self-serve regular - priced at $2.10 a gallon. Customers paid $2.20 for mid-grade and $2.29 for premium during the same the period.

As gas prices increase, so does pressure on the federal government and automakers to wean consumers away from fossil fuels.

Hybrids are becoming increasingly popular, said Brad Berman, editor of Hybridcars .com. A hybrid will save somewhere between a couple hundred and almost $1,000 a year at the pumps, he said.

In New Orleans, dealers say hybrid sales have been phenomenal.

As gas prices have increased my requests for hybrids have gone up 10-fold, said Lester Hackman, general sales manager for Superior Honda in Harvey, La. I'm sold out and we have a waiting list of people who want to see and touch them.

Keith Hanks, sales manager at Lakeside Toyota in Metairie, La., said hybrids are rolling at his dealership as well.

I hate to use a cliche but they're selling like hotcakes, he said. We've ordered 100 and have a six-month waiting list.

Lakeside sold about 125 hybrids last year, said Michael Weeks, Lakeside's new car sales manager.

Seven hybrid models are available in the United States - the Toyota Prius, the Ford Escape sport utility vehicle, the full-size GM pickups Silverado and Sierra and the Honda Accord, Civic and Insight. Daimler Chrysler, Ford, GMC, Lexus and Nissan plan to release hybrid car and truck models by 2007. Toyota plans to offer hybrid versions of all its cars by 2010.

Gleason said he shopped for an environmentally friendly vehicle when hybrid technology was in its infancy and consumers were limited to a few small compact cars.

Instead of dropping $25,000 on a hybrid he didn't like, Gleason began looking at alternative fuels. He discovered biodiesel and bought his used diesel engine car for $10,000.

The diesel engine was originally designed to run on vegetable oil. It was altered to run off petroleum-based fuel but the diesel engine can still run on vegetable-based fuels without any mechanical alterations, he said.

The United States has about 20 biodiesel plants, mainly in the Northeast and West Coast, with another 20 to open across the country by 2007, said Jenna Higgins of the National Biodiesel Board. The closest plant to New Orleans is 330 miles away in Nettleton, Miss., just south of Tupelo. A plant is scheduled to open in Houston by July 2006.

Biodiesel fuel ranges from $2.75 a gallon in pure form to $1.80 a gallon when mixed with additives including methanol and petrol- diesel.

I think it's becoming obvious that the petroleum levels throughout the world are finite and diminishing, Gleason said. Once we're out of oil that's it. It's gone whereas you can grow corn or soy every year. Biodiesel is 90 percent cleaner burning than petroleum-based fuels, it's renewable and domestically made so we wouldn't have to go to Iraq to get it.

Consumers don't just save money with hybrids. Many think they are saving the country. After surveying 1,013 adults March 17, two of three told the Civil Society Institute of Newton Centre, Mass., it is patriotic to buy a fuel-efficient vehicle that uses less gasoline.

Americans understand the significance of making more fuel- efficient vehicles available for purchase, said Graham Hueber, who conducted the study. Soaring gasoline prices and continuing worries about U.S. dependency on Middle Eastern oil appear to be the big factors behind the widespread support for more fuel-efficient vehicles.

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