Is It Good News or Bad News that Gas Prices Will Soon Be Significantly Higher?

By Dom Nozzi, AICP

Recently, I pointed out to a friend that it will be quite beneficial to our society when gas prices (hopefully incrementally) increase to a much higher level. He responded by asking how people will be able to afford such things as the cost of health insurance and medications? And other essential household costs?

I responded by reminding him that as the writer James Howard Kunstler would say, we are an evil (unsustainable) people who “deserve” to be punished.

Americans have opted to unsustainably live it up by taking actions (such as imperialistic militarism) in which our gasoline has been artificially a LOT lower, for almost 100 years, than they should be from an economic and environmental point of view.

At some point, Americans need to pay the piper for the 100 years of subsidized, artificially low gas prices. In other words, we cannot forever violate economic or environmental principles. Nor can we violate the laws of physics. One hundred years of very cheap gas means that Americans have been conditioned to establish unsustainable lifestyles. Lifestyles that naively assumed cheap gas would last forever. And that, of course, is impossible. By assuming gas would always be cheap, many of us are stuck with lifestyles that cannot survive the inevitable rise in gas prices.

The only thing we can do now to ease the pain is hope that gas prices will rise relatively slowly and incrementally. If it happens slowly, many of us can more feasibly adjust our lifestyles so that we are not as dependent on cheap gas.

News flash: It is not possible for us to forever engage in happy, cheap gas motoring by living in such a way as to make it a requirement that all or nearly all of our trips are by motor vehicle. Such a lifestyle can never be sustainable economically or environmentally.

Unless we somehow violate the laws of physics and find an endless source of no-pollution, cheap energy for our cars, we MUST start moving away from a car-dependent lifestyle.

As an aside, even if we do find this “perfect” energy, we still would have to contend with unaffordable sprawl, loss of sociability, loss of community, 45,000 people dying on highways every year, noise pollution, loss of critical wildlife habitat, and unaffordable household costs associated with needing 4-5 cars per household, among other things.

Are there other ways to cope with the inevitable end of cheap gas? Should we strive to find an endless supply of cheap fuel? Subsidize people who live in remote locations by giving them “gas welfare payments”?

Maybe we should think about changing lifestyles that depend on cheap fuel instead. I don’t see a way around it. We either pay now (by changing our lifestyles more slowly), or pay later (which would be a LOT more costly and painful).

How can people afford to pay for essential household needs if gas prices are significantly higher?

Consider an analogy.

Someone who has lived for their entire lives in a community where natural gas and electricity prices have been very low. Their house, largely because of those low prices, is very leaky. It has poor insulation and very bad energy efficiency design. The household uses an enormous amount of natural gas and electricity because it is so cheap. They then learn that natural gas and electric prices are inevitably going to skyrocket in cost due to resource scarcity and new environmental air pollution regulations. They worry that they will not be able to afford health insurance if their home utility costs go way up.

What do we tell them?

To fight against the environmental regulations to keep natural gas and electric cheap? To keep their fingers crossed that technology saves us by giving us “nuclear power too cheap to meter”?

I would tell them that I hope their utility costs go up relatively slowly so that they will have a better chance to adjust their lifestyle and establish enhanced home energy conservation. They can therefore less painfully adjust to a doubling or tripling of the per unit cost of home energy.

I would NOT tell them to pray for a miracle so that natural gas and electric are forever cheap. A miracle in which they can continue to use huge amounts of natural gas and electric.

Another aside: As many others have noted, when (not if) gas prices become much higher, folks who have a lifestyle that depends on cheap gas will be forced to start making trade-offs. They’ll have to start cutting expenses in their lifestyles so that they can afford to pay for more expensive gas until they are able to adjust their lifestyles to be more sustainable. They will have to eat less at restaurants. Grow more of their own food. Buy clothes less often. End their cable TV subscription. Keep the thermostat lower in the winter by wearing warmer clothes in the house. Find a second or third job to get more income. Get rid of their expensive cell phone service. Sell a car or two so that the household has one or none (way too many low-income American households own several cars today). Stop eating meat. Walk, bicycle and use transit more. Put their pets up for adoption. Find a tenant to rent a room at their house. Sell their home and rent a place in or near the town center. And so on…

Changing lifestyles is the key. Not “DRILL, BABY, DRILL!!!”


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Filed under Economics, Peak Oil, Politics, Sprawl, Suburbia, Urban Design

4 responses to “Is It Good News or Bad News that Gas Prices Will Soon Be Significantly Higher?

  1. Wow, I’ve been wanting to write a post like this for ages, and you’ve just summed up what I’ve been wanting to write and tell people!

    I went car-free about 2 years ago, I’d been on low car usage (less than 100 miles per month) for more than 4 years before that. My primary modes of transport are bicycling, transit, and walking. I’m healthier and actually get to travel to far away cities and places more, have more disposable income, get to see movies, eat out, and enjoy life more than my auto-bound cohorts.

    The other irony is I pay a little more for housing (about 15% more) and have a little less space (about 5% less) than I would if I lived another 30 minutes away. However, I actually end up spending vastly less time than most of my friends and cohorts in transport. When they have 1-4 hrs of commute each day, I have about 45 minutes. When they spend about 1-2 hrs driving around for errands, I spend 10-25 minutes walking around doing errands.

    The trade offs might sound scary to many Americans, but the fact is, Americans need to learn to live more like Americans again. Independent, intelligently, frugally, and with a good dose of freedom from financial servitude.

    Cheers, great write up!
    Adron Hall – AKA Transit Sleuth :

  2. Pingback: Dom Just Summarized It Perfectly… Get Ready America, and step away from the car! « Transit Sleuth

  3. Thanks, Adron. Your experience tracks my own, and what I would expect for those who have the wisdom to reduce their own car dependence. Sadly, most all Americans firmly believe their lives would be worse — not better — if they were less car dependent.

  4. yason

    I’m waiting for the higher prices as well: then, maybe, this planet will redirect itself to a more livable and sustainable course of life and the resurrection of walkable, human-scale cities on account of the inevitable.

    In my opinion, the current gas prices aren’t nothing yet.

    Gas costs roughly 2.0-2.5 times more in Finland than in the U.S. and it doesn’t show anywhere although the distances are smaller. Much of Finland is rural so a car is a necessity for most part of the country. Most suburbia in Finland is luckily suitable for at least low-frequency city transit but the house prices are driving people further to the country and small villages. People generally don’t skip on driving even if they have a dreadful 20-50 km commute one way.

    A further data point is that because of emission and CO2 and other “green” regulations new car engines are a lot more efficient yet people compensate that efficiency by buying larger cars with ever larger engines. As for reference, a traditional engine size here through the 80’s and 90’s has been maybe 1.2-1.6 liters from small family car to a large family car. The gas price ruled out American style “gas guzzlers” but now the average engine size is probably closer to 1.6-2.2 liters because, albeit their larger size, they consume less fuel than they would have before. Cars are also a lot heavier than before which is yet another indicator that the price of oil and gas is not a driving factor. Yet, I hope.

    A ten-fold increase in pricing would probably be needed to put the priorities straight. It would hurt certainly and at least put societies nearly out of order but I don’t witness enough people seeing the big picture in time. I agree that it would also be nice to have a gradual increase in energy costs but I don’t buy that. The price of oil is likely to fluctuate between higher-than-ever peaks and relatively deep lows as the production is self-regulated already but that can be lifted if demand goes too high, and because the markets like to speculate the price and buy oil futures instead of oil.

    Illusions can only hold so far and it’s about time realities finally kick in in the coming decades. Everything will come down to a simpler form and excess abuse of “free” resources will wind down. I think it won’t necessarily be a bad thing, at all.

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