In a bid to save money on energy costs, Spain cut the national top speed limit from 75 mph to 68 mph this week. In addition to the expense, there was concern over the stability of the oil supply in the wake of unrest in Libya, which supplies 13% of oil used by Spain. By cutting oil imports, the Spanish government hopes to save money — with projected savings of 2.3 billion Euros (about $3.2 billion) — and at the same time reduce annual CO2 emissions by 12.5 million tons.
The reduced speed limit will be in effect at least until the end of June; it is part of the socialist government’s efforts to cut the nation’s energy bill by five percent. Other policy measure include reducing the price of commuter train tickets and incentives to change old tires, switch to low-energy light bulbs, and hire energy use reduction consultants.
The BBC quotes Ismael Sanz, an economist at Madrid’s King Juan Carlos University, explaining the issue in terms of economics: “There is a transfer of income from families to foreign countries, that’s the problem. If people are devoting a higher share of their income to imported fuel, then they’re spending less buying Spanish products, going for tapas. That ends up costing jobs; everything is affected.”
The speed limit reduction has been met with suspicion and criticism in several quarters. Some claim that the targeted energy use reductions are unlikely to be achieved, and have even accused the government of raising the limit simply in order to raise money through speeding tickets. Others warned that the speed limit reductions will harm the economic recovery.
The Spanish people are not the only ones suffering with high gas prices. Even before the latest violence in Libya, European motorists paid between $6.21 and $9.08 per gallon in mid-February 2011. Gas prices have reached record levels in the U.K. and Australia. U.S. gas prices rose to $3.51 a gallon on Tuesday, with the AP reporting that gas prices are up 39.7 cents in the last month and are 76.4 cents a gallon higher than one year ago.
Libya has the largest proven oil reserves in Africa and the hydrocarbon industry is a major player in its economy, producing 1.8 million barrels a day in 2010. Unrest throughout the Middle East, including in Saudi Arabia, may well indicate that prices will continue to rise in the face of political uncertainty. But even if things were to calm down in that volatile area, surely this is yet another wake up call to policy makers? The time to cut carbon-based energy consumption is now; there is no single solution, but maybe reducing speed limits would be a start to a more comprehensive policy of energy consumption reduction at federal, state and local levels.
Photo: A Spanish Highway
Š Iņigo Quintanilla Gomez via iStockphoto