Inevitable gas price surge will increase hybrid cost effectiveness

"Our dependence on foreign oil is a direct threat to national security," Sen. Ted Stevens (R-Alaska)

The U.S. Energy Information Administration on Tuesday revised its estimate for average U.S. oil prices upward, yet again. Compared to last year, Americans are consuming 1/4 million more barrels of oil per day than last year.

Recently, a Washington Post article pointed out an alarming trend, significantly less oil is coming from American oil fields.

"The implications for U.S. energy policy are profound. At a time when President Bush and members of Congress are talking about the need to be less dependent on foreign oil, the country is becoming even more dependent. As U.S. production declines, demand has been increasing."

Recently, I criticized an Edmunds.com study that claimed hybrid cars were less cost-effective than believed. I absolutely disagree and find the Edmunds study fundamentally flawed (My Edmunds critique). Nonetheless, the price of gas is going to rise dramatically sometime this year, perhaps as early as this summer. And if the winter is really cold, or a hurricane affects the Gulf of Mexico, things could get ugly fast.

So, don't worry, the cost effectiveness of hybrid vehicles is only going to increase. Soon automobiles, such as the Toyota Prius hybrid car, will become investments compared to conventional vehicles.