Gas Pains

As predicted, $4 gas was the tipping point for Americans to start dramatically changing their driving behavior.

But change by how much? One report says the next four years will see a “mass exodus” from American highways as 10 million cars leave the road — the biggest decline in history.

That would leave Americans driving at about the same rate as Europeans.

Speaking of which, the British seem to have reached their own gas price tipping point, at $9 a gallon.


Matt

Why do people think Hybrids are the saviour of the world? They use all manner of noxious chemicals that are impossible to dispose of in an environmentally friendly manner. These chemicals are also shipped all over the world for the various bits of processing. In fact, because of this, the overall environmental cost of a Prius is far worse than the average car. As for a plug in version, what are you thinking? The energy that comes out of your plugs has already been converted from gas, coal, nuclear etc, which is already done at a relatively poor level of efficiency. It's then used to charge up a battery (another loss of energy) which is fed into an electric motor, which is again pretty inefficient!! How is something that inefficient an environmental saviour?

Add to this that unless you drive low speed the entire time they are actually less efficient than a larger engined car as to keep it's speed you will need to stress it (hybrids are also heavy with all that electric stuff inside them) and stressed small engine is far less economical than a large one at low revs (obvious really)

Also buying new cars all the time means that you will have to scrap old ones and build new ones...this is a huge cost from both an energy and environmental point of view. Believe it or not a Porsche 911 actually has one of the best records for costs on an environmental basis as so many of them are still being driven, which means the replacement cost is offset, which is far greater than any fuel efficiency savings.

Quite simply the thing you should do is buy the appropriate vehicle for the task at hand. If you simply drive to and from work in a city, buy a small turbo-diesel that will happily return you 60mpg plus (far better than a hybrid btw). If you spend your entire time driving up and down freeways/motorways/autobahns etc, then buy a car that can do this without unduly stressing the engine...and no that does not mean buy an SUV. A big, heavy car stresses a big engine so you get the worst of both worlds. Once you have this car, look after it and keep it for as long as possible as the amount saved by increases in efficiency in new cars are far outweighed by the costs of disposal and creation of new cars.....ahhh, got that off my chest, I feel better now!

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Victor Sasson

I hope the price goes to $5 a gallon and higher, if that's what it takes to advance mass transit and alternative energy sources and sell more hybrid cars. Me and my wife both drive gas-electric hybrids and drive locally. I can't wait for the first mass-produced, plug-in hybrid, promised by a few manufacturers in 2010. Practical, four-door hybrids have been available in the U.S. since 2000, yet the driving public has seemed until recently to prefer enormous, gas-guzzling SUVS. The media have emphasized gas-saving in hybrids, but do not mention that in a full hybrid, the gasoine engine often goes off at lights and stop signs, as well as when the car is coasting, so it cuts pollution, too. The Toyota Prius can achieve 40 mph on its electric motor and battery pack in the warmer months. These cars are such technological wonders, it's a puzzle why more people don't buy them and stop complaining about the price of gas.

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floatit

Sadly we continue to do the same things over and over and yet we would like to a different outcome. Telecommunting, wind power, solar power, etc. will not cure our largest problem which is people moving. I'd love to see the leadership, whether at the city, state or federal level, build commuter rail. Not the hodge-podge systems in place now but on a inter-connected, efficient, level. Let's face it, folk still need to get to a job or a store or someplace and right now, the car (usually with the driver only) is our means. Let's vote in leadership across the country that will embrace real change. That way, if you wish to stay 20-30 miles away from your employer, it is not a problem to get to work and back.

andre julien

Poushing for telecommuting might give the idea to some companies of outsourcing to other countries

R E D

think is function of the mkt to push the car producers to have more efficient cars, to push people to drive less or slower, to change the transport of goods (maybe taking slower alternatives) and also to decide ethanol/bio diesel alternatives (first is the philosophical question food VS energy, today looks like what you can save filling you car you will pay filling your fridge). Also high prices are the incentives for companies to develop new energy sources. Unfortunatelly all this process require a lot of time. and since we cannot wait too long to save money, we need to share our car with colleagues/neighbours and others are lowering the frecuency to go to the supermkt maybe. High prices today are a macro and we need micro alternatives untill the "industry" digest the new challenge.

R E D

in the US people like to have big engines. proud owners of big machines, now they have to own a bank to finance their petrol. maybe the need to change that into smaller engines, like other countries does, doing this you can still drive what you want.

Conor - Ireland

US gallon, 3.785 litres

British Gallon, 4.54 litres

Only found that out today...

That is so stupid isn't it? Considering we mainly use the metric system in the UK and Ireland now anyways we should really adopt the US version of the Gallon...

How did that come about anyways? Isn't a gallon = 4 quarts, and isn't a quart = 2 pints??? How many litres are there in a pint? We learned 1 pint = .568 of a litre... I can't believe this, I feel so betrayed by the education system!!!! :-)

Joe D

@31 Conor: Sorry, it's 454 grams in a pound; there are 3.785 liters in a gallon. So that's more like $8.90/gal.

Chris

# 24 and 31.

First of all, a gallon in the US differs from one in the UK (imperial gallon). A gallon in the US equals 3.78 litres, versus 4.54 litres in the UK. So the $9 dollars is actually well researched.

Either way, apparently more than enough reason for Kristin (#24) to feel better. Good for her. I am sure the rest of America feels relieved as well.

I am a Dutchman (living in the UK) and the cost of a litre in Holland is actually even higher; around €1.60 ~ £1.27 ~ $2.51. I must have just made the day for Kristin and many other Americans.

But I hope they realize that in Europe there is little to no sympathy for Americans complaining about the high cost of oil. For decades a large portion of Europeans has been putting significant efforts in reducing oil consumption and waste only to see the Hummer becoming the ultimate status symbol across the pond.

And I am not saying that Europeans are all idealistic angels (far from it). The truth is that most people will only change when there is a monetary incentive. A principle that the US should be well aware of. But taxing coal and oil usage and subsidising alternative energies will unfortunately still take many years to even appear on the US political agenda.

My parents-in-law live in Florida and apparently the first recycle collection point still has to be invented there. It is also probably one of the most ideal locations for it but they haven't come across a single solar panel while living there. People just cannot be bothered.

Well, America ... welcome to the real world. You have a lot of catching up to do. Energy is actually not free and will become even more expensive in the near future.

Personally I am looking forward to driving around this great country in a hybrid (when available) and actually not be ridiculed. In the meantime, painful as it is in the short term, the sight of car lots filled with unsold SUV's and Americans crossing into Mexico to buy cheap gasoline, gives me a glimmer of hope for some mentality change and, yes, some amusement as well.

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Chris

PS. Just to give you an idea of how much work still needs to be done on changing the mentality of the average American on driving habits. Here is the link to the American green car of 2008:

http://www.greencar.com/features/2008greencar/

Diana Lynn

I just finished reading Freakonomics, the revised and expanded edition, in which Dr. Levitt points out the many economic flubs in an August 21, 2005 New York Times Magazine article by Peter Maas on the subject of "Peak Oil". While I agree that the article in question was in great need of a competent editor, I would like to Dr. Levitt to expound on the market implications of peak oil itself. If we assume that it is a real phenomena would the oil companies have incentives to tell us (their stock holders), and what would that eventually do to the world economy?

Dr. Levitt concludes his thoughts on the aforementioned article in a manner that implies the old cliche "necessity is the mother of all invention". While in any other marketplace arena I would tend to agree, in this case I am not certain if the same economic truisms are in play. While I understand the assumption that alternative energy sources, when they become cost effective to adopt, will appear at the right time and place, I am afraid that if the "Peak Oil" theory is correct we are running far behind schedule in terms of rising to that market reality.

Consider: What if retooling our energy infrastructure to the point where it can meet current and/or growing future demand in the US, Europe, Mid East and the booming economies in Asia is, in fact, 20-30 years off? Theoretically, is it not possible that we -- the market, that is -- may not have those alternatives in place, in a case of too little, too late?

I have no economic background, but my intuition on this subject is this: Assuming that the "Peak Oil" phenomena is a reality, potentially won't we eventually observe a destabilizing lag between the point between when rising crude prices create untenable inflation, followed by bust, followed by a resurgent demand for oil -- a demand the market cannot meet -- followed by a stampede toward alternative energies accompanied by little venture capital by which to bring it on line fast enough due to the world economy having been decimated by boom-bust cycles created by the faltering supplies of crude oil?

If conventional energy is the underlying enabler of modern life and the basis upon which healthy markets thrive -- which all other forms of economic growth indirectly hinge upon -- can we say that energy, as we know it, falls under the same marketplace assumptions? Or might we find developing Third World and, perhaps, even First Wold nations caught in a energy limbo during which time the world economy will face unprecedented "yo-yo" cycles of ramped up crude demand, followed by economy-damaging inflation, followed by price drops, followed by resurgent crude demand, followed again by inflation, followed again by crash -- an all-around bumpy road until alternative energies are not only technologically available to the market, but in mass use on the scale that modern civilizations demand.

I liken it to this: You plant a 5,000 acre apple orchard and for 25 years you see your apple trees mature and produce increasing crops that benefit your bottom line handsomely. Gradually, however, a disease overtakes your apple orchard and your harvest begins to fall below demand. You increase the prices of your apples so much so that eventually people stop buying Apples. Apple prices fall again, but though demand is lower you are still in a shortage state because the disease continues to spread. Eventually, you reluctantly conclude that the disease is incurable and if you don't bale out of the Apple growing business you will end up bankrupt. As an alternative, you decide to replant your 5,000 acres with orange groves. The problem is, while you are phasing out your sick and dying apple orchard, you have to grow these slow maturing orange trees and it takes, say, 10 years before you can approach previous levels of production/profit. So while the demand remains constant or even increases, you cannot supply your customers with sufficient quantities of oranges any more than you could apples -- at least for a period of, say, 5-10 years.

If this orchard scenario were to represent our petro-dependent economy not merely in the face of increasing crude demand/inflation but as a byproduct of "Peak Oil" shortfalls, will we not face a period in which the market cannot supply the level of petro-derived energy that consumers demand -- possibly to the degree where a continuity of modern lifestyle may not be feasible and/or we enter a worldwide depression?

In addition to a speculative answer based on the assumption that "Peak Oil" is a real phenomena, I would like to know if leading economists will consider teaming up with the best geologists in the field of oil exploration -- not to be confused with the PR arms of the oil industry -- to see whether there is any merit to the "Peak Oil" dilemma. If there is, aren't we better off knowing what we need to do now, rather than later? And if there is no "Peak Oil" threat, might the venture at least put to rest the fear of such a scenario?

The perpetuators of conventional wisdom -- the media, as Dr. Levitt points out -- can only be as competent as their sources. If no one with the academic credentials to evaluate this question in a geologic and economic context has done so, they need to. Sooner rather than later.

Thank you.

Are you there, Dr. Levitt? Though I know you have much better things to do, I would appreciate your thoughts.

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Conor - Ireland

# 24 - Kristin

July 7th 2008 - Average price of a litre of 'gas', called 'unleaded petrol' in europe, was 119.4p sterling. Source: www.petrolprices.com

At today's £/$ exchange rate of £1 = $1.97 (BoE), that's $2.35 a litre.

There are 4.54 litres in one gallon, which makes for a price per gallon of $2.35 * 4.54 = $10.67. Freakonomics didn't do its research very well. I'm sure almost $11 a gallon in the States would see a serious change in behaviour...

Corresponding price for Ireland is approx $1 cheaper than the UK per gallon simply because of taxes... However, I've never seen so many people cycling and walking everywhere - despite the ridiculously inclement weather we're having this side of the Atlantic!

griff

#30 interesting point...

I think its not about the reduced demand from fuel efficient cars driving prices down, but more that unless you had a small fuel efficient car, in the UK you couldn't afford to be (e.g.) a car commuter.

Sort of a gateway point?

Also, UK gas prices have a high tax component, which government keeps high for revenue raising purposes (captive market - till now, anyway) and as deliberate policy to discourage car use.

In the end small efficient cars won't be an answer to continued high oil prices... perhaps the US should skip that stage and go to the next step...??

Whatever that is - in London it might well be no privately owned cars.

Patricia Shea

Go to Blockbuster Video's and rent "Who Killed The Electric Car". Europeans walk everywhere because everything is so close together...try that in CA,NV & AZ.

Gene

I don't think much about gas prices. I drive a Prius and average 52 mpg.

Berynice

United Statesians act like gas is a renewable resource. It's not. If high prices is what it takes to get them to do the right thing, then right on! Oh, as to the comment above that the chap is going to invest in "obesity doctors" now that people aren't driving. That's your only alternative to driving? Watching TV? How about . . . walking? Europeans walk. That's why they're not fat.

Roger

$5.00/gallon gas is a good thing! Look at the positive changes and actions it has brought about: (1) reduced driving, i.e., less multiple trips, (2) carpooling and use of mass transit, (3) explosion of alternative fuel innovation, exploration and design, (4) huge awareness of global warming and the affects of "greenhouse" gases from carbon fuel emissions, (5) greater conservation of resources, etc. While we all hate $5.00 or more per gallon gas prices the higher price has caused us to take actions we would not have taken otherwise. Hit'em in the wallet and they'll pay attention. What will $6.00 per gallon wrought?

Sven Brendel

Well, oil is over-priced, in the sense that speculation has moved the price higher than the level dictated by supply and demand. In any case this price increase is what we (Americans) need to lessen our dependence on oil (be it foreign or domestic). The domestic oil drilling "solution" completely misses the point; now consumers are starting to pressure automakers to make more fuel efficient cars and are more cautious in their consumption. If we want to lessen the burden placed on working and middle class families, we should consider making college tuition and health care more affordable, but letting gas prices remain high to discourage more oil consumption (kind-of like a Pigovan tax).

Lastly, I hope this will make U.S. automaker make more fuel efficient cars. My current generation Lincoln Town Car - a 2 1/2 ton, 18 foot car gets up to 24 mpg @ 70 mp/h on the freeway and 19 in the city; that more than the considerably smaller average American Car. If my Town Car can get such mileage there is no reason for chevys and Buicks to get a lower milage. Furthermore, even my car could run at 30+ mpg if Ford used the most up-date technology. Perhaps this rise in prices will give Ford that incentive.

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Bradh2o

Hey cry babies...

I drive 55 on the Highway while the speed limit is 65 (55 for trucks). What do I see... Everyone, including big rigs, flying past me.

Why drive 55MPH? Driving 55 MPH increases my gas mileage by 18%, by simply driving 10 MPH slower.

That amounts to an additional 140-170 miles per tank.

Slow down, pay less, go further. You'll still get there.

Think America! Think!

Greg

#46, I agree with you up to a point. However, we American gas consumers have to own up of the fact that we are a part of the problem. I know two co-workers who have bought homesand farther away from our office. I also know several people who even as gas was steadily rising from $2 a gallon still went out and purchased SUV's (despite my pleading). I think only now are people really starting to think about more efficient vehicles. I guarantee you, though, if gas were to suddenly drop back to $2 a gallon, the same people who are buying smaller cars would run drive to the dealership and jump right into an SUV.