My local "drug" dealer, also known as Sonny's Sunoco, as regular readers may recall, likes to play roulette with prices. It's not unusual for me to see the numbers on his display board switch three or four times a day, apparently depending upon how his personal trading is going on the spot market.

So I was surprised to see the figures hold steady, this weekend, at $3.79 a gallon of regular, more than 40 cents below the peak price he was demanding of us petrol junkies just a month before. All across the country, the AAA reports, prices are falling, and are now averaging barely $4 a gallon.

(Of course, who would have thought we'd breathe a collective sigh of relief when fuel prices were "only" $4?)

Why the sudden dip? No, it's not because the Saudis are suddenly feeling guilty, nor is it the result of a sudden sense of social responsibility in the ExxonMobil boardroom. It's apparently nothing more than a sign that Adam Smith was right. The invisible hand of the market seems to be working.

As fuel prices soared, in recent months, Americans began cutting back on their driving, whether by carpooling, cutting out unnecessary trips, switching to more fuel-efficient vehicles, or canceling their cross-country vacations. Whatever the reason, the nation sucked down 2.4 percent less fuel during the previous four weeks than it did during the same period in 2007. And that's helped drive down the price of crude by more than $20 a barrel since its July 3 peak of $145.31 - to a Friday close of $123.26.

Of course, that seemingly direct link between fuel consumption and fuel prices could work against us, if motorists wind up driving more now that fuel is, ahem, affordable again. Relatively, anyway. What was $72, on average, in 2007, is still expected to be $127 a barrel in 2008, and $133 next year, according to the energy Information Administration.

But unlike years past, when the laws of supply and demand were pretty much directly impacted by what happens on U.S. shores, the situation has changed dramatically in recent years, as more and more of the emerging world discovers the automobile.

China has become the world's third-largest motor vehicle market, behind only Japan and the U.S., and with millions more cars and trucks taking to the road each year, its appetite for petroleum has soared. The same thing is happening in India, Russia, and, well, much of the world. But while usage is soaring, supply has held relatively steady.

The situation is compounded, warns an article in today's New York Times, by the fact that consumers in many of these emerging markets aren't actually feeling the real pain of petroleum's record run-up. Indonesia, for example, is spending 4 percent of its entire economic output in the form of fuel subsidies, helping maintain gasoline prices of around $2.30 a gallon. In Malaysia, the subsidies amount to 7.5 percent of economic output.

China is spending about $40 billion to subsidize fuel costs, though it did allow gasoline prices to rise significantly on June 21. As the Times notes, that immediately drove down world oil prices by a whopping $4 a barrel. There's the possibility of still further increases in Chinese gasoline prices after the upcoming Olympics. Observers expect the government to wait rather than risk protests that could be picked up by the world's media, descending on Beijing.

While subsidies might ease the burden on third-world consumers, the problem is that low prices do the same thing, in places like China and India, that cheap gas did in America, it encourages consumption and limits the viability of conservation. And with little growth in global petroleum supplies, the fast-rising demand from these markets will continue to push up the cost of crude, even if Americans maintain their newfound focus on fuel efficiency.

When it comes to fuel economy, the little things matter, sometimes quite a lot, as some of the industry experts I gathered together for a "green car" forum yesterday made clear.

The occasion was the public debut of NextCruise, an event for which I am serving as volunteer chairman - TheCarConnection.com, in full disclosure, is not in any way involved in the event. Three senior industry leaders, one from each of Detroit's Big Three, were on hand and asked what it will take to transform the auto industry into one more environmentally friendly.

"There's no silver bullet," emphasized Micky Bly, a senior powertrain executive at General Motors and a key player in the development of GM's Chevy Volt plug-in hybrid-electric vehicle. Instead, we need to expect a whole range of alternatives to today's conventional gasoline engine.

The likely list ranges from hybrids and plug-ins, like Volt, to clean diesels and hydrogen power. Some of these are ready for the road already, while others, like hydrogen-powered fuel cells, are a decade or more away from production.

Surprisingly, all of the experts on the panel agreed that, as Bly suggested, "the gasoline engine isn't going away" anytime soon. But that doesn't mean technical business-as-usual.

Ford's new EcoBoost engine is an example of big changes in a relatively familiar package. This turbocharged direct-injection engine, which will debut in an upcoming Lincoln product, can deliver V-8 performance with V-6 mileage.

That package is complex, and it isn't cheap. But in some cases, surprisingly simple, low-cost technology will yield significant improvements in efficiency (read: mileage). Like something automotive engineers alternatively call Autostart, or Start-Stop.

If you've driven a full hybrid, like the Toyota Prius or Ford Escape Hybrid, you've undoubtedly experienced the concept. Come to a light, step on the brake and you may notice a subtle shudder, as the gasoline engine is shut off automatically. The light changes, you lift your foot, and before you even reach the accelerator pedal, the engine is running again.

Idling is a hidden thief, capable of robbing a gallon or more an hour, whether you're sitting in heavy freeway traffic, or waiting on line for a coffee to go. Recent studies show that you can save fuel shutting an engine off for as little as 15 seconds rather than idling. Few of us want to keep switching on-and-off as we creep forward in line, or in traffic, so it's great to have the car do it for you automatically.

"In 10 years, you'll be looked at as low-tech if your car runs at idle," said another speaker at the NextCruise forum, Chrysler's senior manager of hybrid system integration Jay Iyengar. And it won't be just hybrids offering the feature, but just about every vehicle on the road.

What other features might we see? While BMW wasn't on hand for the Wednesday panel, the company will be participating in the actual NextCruise next month, and we imagine it'll be talking about some of the mileage-minded features on the new 1-Series, such as its electric power steering. BMW isn't alone there, of course. On the I-4 version of the Saturn Vue, electric v hydraulic power steering saves about a mile a gallon. But the BMW 1-er uses a new, rack-mounted motor that restores the sort of handling and road feel earlier electric steering systems lost.

Look for that technology to spread, as, I believe, will the new 1-Series system that automatically decouples the car's alternator when the battery is charged up. Spinning power steering pumps and alternators can suck several miles a gallon off your mileage numbers. This new system is available only in Europe - for now - but look for it to propagate fast, as automakers race to meet tough new mileage standards.

Yes, it's possible to yield big savings through major efforts, like adopting lightweight body panels and switching to advanced powertrain technologies. But manufacturers have yet to pluck all the low-hanging fruit. So relatively simple systems, like Autostart, will play an important role in the greening of the automobile.

Oh, and for those interested in the upcoming NextCruise, here's the formal press release:
2008 Inaugural NextCruise^TM Brings Environmentally Friendly and Future-Looking Dimension to Woodward Dream Cruise
Nine Auto Manufacturers - And Two "Green' Motorsport Series - To Display Technologies And Provide Public Ride And Drives
Pleasant Ridge, Mich., July 23 - The 2008 Inaugural NextCruise^TM, to take place on August 15-16, is a new event - new in both concept and content. Staged in the City of Pleasant Ridge, NextCruise^TM introduces an environmentally friendly and future-looking dimension to the Woodward Dream Cruise, widely viewed as the world's largest automotive spectator and participation event.

Nine of the world's largest automakers are supporting NextCruise^TM, by providing the public with multiple opportunities to check out - and drive - the latest in "Green Machines" (including hybrids, clean diesels and those with other, new super-high-mileage and ultra-low-emission technologies).

"NextCruise^TM marks a number of important firsts," said Paul Eisenstein, Event Chairman. " It's the first-ever public event that brings together such a large array of leading automakers, specifically to display environmental vehicles and technologies; the first-ever event where the public has the chance to drive such a wide assortment of clean, high-economy cars, trucks and crossovers; and it's the first-ever official Woodward Dream Cruise event that is specifically future-focused.

"NextCruise^TM helps expand the relevance of the Woodward Dream Cruise from what is primarily a retrospective into a celebration of the automobile, past, present and future," Eisenstein added.

NextCruise^TM will also feature displays of even more advanced green concepts and technologies, such as fuel cells and hydrogen-powered internal combustion engines, together with experts to provide insight into how those developments can reach production in the not-too-distant future.

"As Pleasant Ridge has the longest stretch of green space on the entire Woodward Corridor, it's highly fitting that the City should be the host of this "Green" event as part of the Woodward Dream Cruise," said George Lenko, Pleasant Ridge Commissioner and NextCruise^TM organizer. NextCruise^TM will be based in Memorial Park, immediately adjacent to Pleasant Ridge City Hall.

"Today's and tomorrow's Green Machines challenge the stereotype that environmentally-friendly automobiles require customers to make significant sacrifices: in size, features, comfort and, especially, performance," said Eisenstein. "NextCruise^TM provides a venue for manufacturers to display current and future Green technologies and engage the public in understanding that the newest Green Machines are roomy, well-equipped and, in keeping with the spirit of the Dream Cruise, able to deliver surprising performance and fun."

NextCruise^TM also will include a look at the next generation of "green" motorsports, including the ethanol-fueled IndyCar Series, and the American Le Mans Series (ALMS), which features a unique Green Racing Challenge this season. The Detroit Belle Isle Grand Prix - which takes place on Labor Day weekend - includes both IndyCar and ALMS races. The motorsport display will include race cars and appearances by key IndyCar and ALMS drivers.

"Because of the press of competition, motorsport has traditionally developed technologies that have found their way to production cars," Eisenstein stated. "Motorsport can be exciting, competitive and environmentally friendly, all at the same time.

"NextCruise^TM, put simply, is lean, mean ... and green."

NextCruise^TM will be held in Pleasant Ridge's Memorial Park along Woodward Avenue, north of Nine Mile Road. There will be a public preview on the evening of August 15. NextCruise^TM itself takes place concurrent with the Woodward Dream Cruise on August 16. Major auto manufacturers supporting include General Motors, Ford, Chrysler, Toyota, Nissan, BMW, Mercedes-Benz, Audi and Volkswagen. Other sponsors and exhibitors include Bridgestone, Detroit Belle Isle Grand Prix, IndyCar Series, American Le Mans Series, PR Newswire, G-2 Communications and ESI. For information go to www.nextcruise2008.com or email nextcruise2008@aol.com.

Pleasant Ridge is known for its historic homes, tree-lined streets and active citizens who dedicate their time for the betterment of the community. A long tradition of community pride is reflected in the City's beautiful parks along Woodward Avenue and its pristine neighborhoods. Many of the houses in Pleasant Ridge are part of a nationally-recognized historic district and all the homes reflect the care and attention which assures that Pleasant Ridge will remain a beautiful community for generations to come. A strong sense of community, dedication to historic preservation and ideal location makes Pleasant Ridge the perfect city for all ages, interests and lifestyles. Go to www.cityofpleasantridge.org.

# # #

Spend even a few days in the boomtowns of Shanghai and Beijing, and it's hard not to get caught up in the enthusiasm that has long dominated the Chinese automotive market. From a decade of personal experience, I have watched China rapidly evolve from a country of bicycles and motor scooters to one of the world's largest car markets, where owning a vehicle is a must for the increasingly affluent middle class, as well as business and government leaders.

Only a few months back, during my last visit behind the old Bamboo Curtain, many analysts were breathlessly forecasting that China, which has now surpassed all but the U.S. and Japanese national markets, would become the single largest car-buying nation by 2025. Or will it? Maybe not, suggests a story in the Financial Times.

The paper notes that for the first six months of this year, Chinese car sales rose a solid 14 percent. Considering the huge slump in the U.S. market, that seems pretty substantial, but not when you consider recent trends. Over the last decade, China has seen annual growth rates that, at times, have nudged triple digits. But in 2006, that slowed to a still-impressive 34 percent. And last year, the increase was just 24 percent.

While some analysts are still predicting 20 percent growth for all of 2008, others, says the FT, fear it will dip to 15 percent and "might be at a turning point."

As in the U.S., the paper suggests there is a "perfect storm of negative factors" affecting the Chinese market, including rising prices for steel and other raw materials. It didn't help when the government approved an unanticipated increase in gasoline prices last month. At worst, some observers thought that might happen after the upcoming Olympics.

There could be a significant "pause," warns John Bonnell, director of Asia Pacific forecasting for J.D. Power and Associates, who told the paper, "It's impossible to predict the impact of the global slowdown on China or on (its) auto industry."

While rising fuel prices are a hard pill to swallow for Chinese consumers - impacting them far more, in terms of overall income, than their American counterparts - that's offset by the steady decline in vehicle prices, reflecting rising competition and the increased capacity of manufacturers operating in China.

Want to save a bundle on each tank of gas? Slow down.

It may seem like there's not much difference between going 70 and 75 mph, but according to Department of Energy data, that 5 mph difference equals a roughly 5 percent difference in fuel consumption. Cut your speed from 75 to 55, and you'll boost your mileage by as much as 30 percent, says the DOE.

Put another way, reports the Detroit News, you'll save the equivalent of 30 cents a gallon in the typical American vehicle for every 5 mph you slow down from 75.

Of course, there's a downside. Long trips might take significantly longer - nearly an extra 2.5 hours for a five-hour jaunt at 55 mph compared with 75. The time taken for short jaunts, however, is negligible. At 75 mph, that 10-mile commute would take about 8 minutes - if roads are clear, which isn't common at rush hour - but less than 11 minutes at 55.

There's going pressure on lawmakers, as I note in a separate blog entry, to reduce speed limits, which have been creeping up since Congress loosened the limits on states. But truckers and other motoring groups are expected to put up a strong fight of their own.

There are other ways to save fuel, from checking your tires to tuning your engine, according to the site, fueleconomy.gov. Every 1 psi below the proper rating will lower mileage by 0.4 percent. Since most Americans tend to never check their tires, it's not unusual for pressures to be off 5 pounds. That means a 2 percent mileage loss, or as much as a half mile a gallon, on a typical compact to midsize sedan.

Meanwhile, if you're running around with a trunk seat or backseat full of stuff, consider cleaning house, er, car. Every 100 pounds of added weight can curb your mileage anywhere up to a full mile per gallon, experts reveal, depending on your vehicle.

What are YOU doing to save fuel?

It's back...or at least it may be soon.

Lawmakers across the country are starting to reconsider the "double nickel" speed limit, which was implemented back in the mid-1970s, following the first Mideast oil shock. (Actually, the figure was originally a snail's pace 50, until Congress caved in to the trucking lobby and raised the speed limit to a speedier turtle's 55.)

Back then, lawmakers were worried about finding sufficient supplies to fuel American cars. These days, though tight, there's enough to go around, but the more fuel used, the more the demand, and the more likely prices will keep rising. And from an environmentalist standpoint, the more fuel you use, the more CO2, a key greenhouse gas, you'll pump into the atmosphere.

There's a case to be made. A car averaging 32.4 miles per gallon at a steady highway speed of 55 will only get 26.8 mpg at 70, according to Department of Energy statistics, and a mere 24.8 mpg at 75. (See a separate story on saving money by slowing down.)

Of course, there's a counterargument. Drive from San Diego to San Francisco, or Boston to Richmond, Virginia, both about 500-mile runs, and you'll spend an extra 2.4 hours on the road. That adds up not only to lost time, but additional highway fatigue and frustration, which can translate into accidents and road rage.

Nonetheless, you shouldn't be surprised to see the debate heat up. After one state lawmaker proposed a resolution calling on Congress to reinstate the double-nickel limit, Michigan Governor Jennifer Granholm said, "I think it's something we might want to take a look at." Bills, meanwhile, have been introduced in both Minnesota and Vermont to lower speed limits to 55. The political pressures are mounting on government officials to do something - anything.

What's your take on driving 55?