Good and bad of $4 gas?

This one depends on where you fall in relation to the article
http://www.boston.com/news/local/articles/2008/06/14/teen_drivers_running_on_empty/

Good:
People are driving less with one person in a heavy 6-passenger vehicle. Carpooling, busses, trains, scooters, and bicycles are being viewed as wise choices, instead of a symbol of a failure to succeed.

Roads and parking will be less crowded, strained travel infrastructure now suddenly adequate.

Interest in E-bikes, E-scoots, and EV’s in general is booming. Consumers actually spending money on alternatives means these will expand, and we will have more and better choices.

People are either moving closer to a good job, or getting a job closer to a place they like to live (always smart). People will walk more, and buying a short-range EV is no longer a problem

Smaller homes that are cheaper to power, water, heat, and cool will become more socially acceptable, because building materials are more expensive to buy and have delivered, and people have less money to spend on their house because everything else has gone up too.

“Chicks” are beginning to accept that it’s better to spend time with a smart and funny guy with a scooter/economy car, than a guy with a big polluting resource-wasting car, and no money to go anywhere. (like Europe/Asia) Young men often do what chicks dig.

There will be a small boost to local businesses that deal with locally produced/grown products. Kiwi fruit is nice, but it’s flown from New Zealand? Cheese from Wisconsin? Tomatoes from California? Apples from Washington, Potatoes from Idaho…(this is also “bad”, as businessmen and their employees who ship products, will ship less of them)

Bad:
The entire infrastructure in the USA was built around cheap fuel. A large central factory can mass-produce a product very cheap because they are selling to a large area. Materials come in with cheap transportation from a wide choice of competitive potential vendors. The cheaper the fuel, the farther the incoming supplies and outgoing products can be competitive.

It’s about impossible to start a new cargo train or shipping line to be competitive. Cheap fuel meant that thousands of small independent truckers across the country could compete. Expensive fuel will concentrate transport onto a few large conglomerates with the higher costs passed on to the consumer. This means people will just have to buy less stuff because you make the same money, but the price of everything has gone up.

People will drive/fly less on vacation. And when they drive/fly, it will be shorter trips to fewer places. Tourism jobs that are dependent on customers using cheap fuel will decline.

Before WWII, flying anywhere was an expensive luxury for the rich, and even then it was only available to major cities with a limited number of flights. There is no constitutional right to frequent cheap flights to a variety of cities, so there WILL be fewer airlines with expensive seats going to fewer cities.

The US will go through a long drawn out re-adjustment. And when the US economy just sneezes, the rest of the world gets the flu.

I’m sure there’s more probables we can think up…

Spinningmagnets did an impressive summary. The only thing I might quibble with is some things in the bad category I might list as good. In general Americans in particular are going to have to get used to a lower standard of living. I think this is a good thing. When I look back on the changes I have made voluntarily most of them head in this direction anyway. Less consumerism, simpler pleasures, more reusing, and more recycling. The cool thing is since these changes were not stimulated by economic necessity I also get to keep the extra money.

One other bad thing is some countries (yes you, Canada) will be motivated to go after really dirty energy sources. Hopefully environmentalists can keep a lid on future exploitation or oil sands, oil shale, off-shore oil, and other nasties.

The one really bad thing that jumps out at me, is with less disposable income brought on by higher prices on pretty much everything, alternative energy becomes less affordable for more and more people. Take a solar powered house for example, right now it is luxury a few people can afford (in part due to all the tax breaks), as peoples incomes get stretched there will be less and less people that can afford the twenty to thirty thousand that it takes for a system. I mean, I can guaranty that pretty much everyone here would have a solar powered house if they had the extra bucks to throw at it. Also on the other side of it, photovoltaic systems will probably go up in price too along with everything else.

Deron.

one thing good about $4.00 gallon gas they didn't mention in the article, is it isn't $8.00 gallon YET. In a few years, We may look back fondly on the time when gas was only $4.00 gallon. I sure hope the supercapicitors and other new super batteries make it to the market sooner than later. I hope we get a government here in the US that starts encouraging and helping finance this new technology, instead of dumping so much money into its military.

I may be dating myself but I miss the good'ol days when gas was $.65 a gallon. I also remember gas wars when I was a kid. This is where the service (FULL SERVICE) stations would lower the price to get customers. My dad regularly paid $.11 a gallon.

Grandpa Chas S.

Here's USA average gasoline price from 1896 to the present:

http://www.theaa.com/public_affairs/reports/Petrol_Prices_1896_todate_gallons.pdf

A while back I recall watching "Bullitt" where Steve McQueen has a car chase through San Francisco, and seeing gas prices in the background. According to this PDF, the 1968 price was around $.74/gal.

With sulfur removed from diesel to make it burn cleaner, the sulfur acted as a lubricant for the high-pressure fuel pumps (18,000 PSI+), so bio-diesel was added as a lube at around a 5% solution. There is now a large infrastructure for producing bio-diesel (typically from soybeans)

A very large pilot farm was built in the Brazilian forest to grow over 80,000 acres of soybeans. Primarily for the world market for clean Ultra-Low-Sulfur-Diesel (ULSD), but the leftover mash is also a high-protein livestock feed. The owner is an Iowa corn family.

They were asked why they did this, and they said that they had suffered financially for years, but now ethanol corn is booming and they have money to expand their business so they can turn a profit for as long as its possible. They wanted to expand inside the USA, but land is now $4,000/acre near their home farm, and in Brazil its $300/acre with no water restrictions, no EPA, no OSHA, and cheap labor that is grateful. He is building worker apartments, and a school + daycare for the workers children.

He burns cheap Venezuelan diesel in the tractors, because his soybean oil is worth too much to use. At $4+/gallon (More in Europe), he has an option on the surrounding forest. I'm thinking deforestation is more "bad" than "good".

Refusing to build more state of the art refineries here in the USA has been very good for Mexican and Canadian refineries. (If you have a choice, work at the Canadian ones. The're very cold in the winter, but the Mexican ones are...hmmm, how should I phrase this?

The US gets the fuel, and Mexico/Canada get the jobs and pollution.

One thing that I have noticed over the last several years is, as gas prices have gone up, my world has gotten smaller. Traveling is fast becoming a expense I can not afford. I even find myself restricting my travel in the immediate area. I sure would hate it, if it got to the point that most people (me included) could not afford to travel outside of our towns. I guess it used to be that way, people would live in die and never see anything outside of the immediate area.

Deron.

Some people live and die and never see anything beyond their TV sets :)

Deron.

Sorry man, I guess I need to work better at getting my point across. What I was thinking of is, before there was widespread transportation, the horse and buggie days, people would live on the farm and maybe make it into town once in a great while. That is what I meant when I said some people "used" to live and die without seeing anything outside the immediate area. Right now I'm sure there are plenty of people that have no desire to travel, I just hate to see it get more and more expensive for the people that do want to get away.

Deron.

I heard a new word to describe people being confined to more local travel due to cost: When they take their two weeks off from work, many are now taking "staycations" where they do some short day and overnight trips locally. the entire travel industry will be bankrupt at this rate.

I agree with Alias' point. No cars doesn't mean no travel. In the future I believe that cars and trucks will exist to solve the last mile problem. Long distance travel will be done primarily by train and boat. As energy gets more scarce this will be all we can afford.

As a larger concept, countries that have had access to cheap transportation have prospered financially (hopefully using that prosperity for advancing society with wise choices). Look at England in the 1800's, the US in the 1900's, and Japan in the post-WWII/present era.

The pattern was set by the Phoenicians, who traded with small ships plying the mediterranean coast. Cornwall, England had easy access to Tin near the surface (the reason the Romans took it over). Cyprus had a great deal of near-surface copper. Mix them 1:7 and you have Bronze, a very valuable substance at the time.

The Britons would trade a lot of tin for a small amount of copper, and the Cypriots would do the same in the opposite ratio. The Phoenicians would end up with a lot of bronze by the simple act of transporting the elements arounds. Bronze (even into the age of iron) could be traded for just about anything. the Phoenician cities of Tyre and Sidon (in modern Lebanon) became wealthy as a result of transporting and trading any valuable commodity. Salt, olive oil, opium oil, you name it.

Instead of pictographs (like Egyptian hieroglyphs) they developed a sound-based alpha-bet (from the Greek Alpha-Beta for A,B,C,D etc) and used clay tablets as pocket dictionaries for the different ports. ("Hey buddy, know where a lonely sailor could find a bar in this town?").

People are social animals, so the majority will be drawn into dense cities with manufacturing and service jobs. The countryside will still be used for mining and farming.

A couple of years ago, gasoline in the USA was around $2/gal, and people were laughing at anyone who said it would reach over $5/gal soon if we don't drill more and build more refineries. They're not laughing anymore.

If Hezbollah (or any other radical group) gets a "truck-nuke" (from Iran?) and sets it off anywhere in the middle-east, there will be an instant 20% reduction in oil available to the USA. The military, police, and food transport trucks will be given access to ridiculously priced fuel, but the average citizen will not. how long will the crisis last? who knows?...

Also, when the USA sneezes, the rest of the worlds economy gets the flu. What would another countries foreign minister say if they were asked to phase out all buying and selling with the USA in order to become economically independent?

If you suddenly can't afford gasoline for your car, you have to change around your entire life to function in the new paradigm (getting an electric bike/scooter, moving either home or job to be closer, or near public transportation).

If there's a collapse of the grid infrastructure, its expensive and complex to become off-grid (solar PV, large battery/inverter, wind-gen, etc) especially when everyone else wants all that stuff at the exact same time (parts back-ordered, huge black-market price gouging).

With expensive fuel and expensive transportation, all the worlds societies will experience a long, drawn-out and painful shift.

PS, dont think the Democrat party or the supreme court will defend the environment in a crisis. The president (in either party) will be granted extoraordinary emergency powers when there's blood in the streets, and ANWAR/continental-shelf will get drilled fast and sloppy.

The president (in either party) will be granted extoraordinary emergency powers when there's blood in the streets, and ANWAR/continental-shelf will get drilled fast and sloppy.

This shows a common misconception of the oil market. Oil off limits now may or may not be drilled, but if it is it will be sold on the world market. America will get to bid along with everyone else. In order for onshore oil to bring down the price of gas in the states significantly we'd have to nationalize the oil companies. I don't see that happening.

Dear DaveW, "..The only thing I might quibble with..." I like your quibbles, IMHO they are often more insightful than some peoples well-researched conclusions! And, you are a man who puts his money where his mouth is.

After Pearl Harbor, Roosevelt gathered the leaders from Ford, GM, and Chrysler and told them how many planes, tanks, ships, jeeps, and Army trucks they were going to have to build in the next few years.

They instantly replied that there was no way that they could possibly make that many and still make cars. Roosevelt replied that they didn't understand, they weren't going to be making any cars until the war was over. Any company that wasn't making war materiel wouldn't be allowed any aluminum, steel, electricity, etc.

He also rationed gasoline to the public (no free market), using emergency powers.

Leading up to WW-one, Turkey wished to remain neutral, but taxed their people to pay for two battleships to protect their two main harbors. The ships were being built in England, and when war broke out, England "took" the two ships instead of delivering them to the client.

The German ambassador to Turkey lobbied to give Turkey two old decrepit German ships, and persuaded them to side with Germany. (Germany lost, and the Turkish Ottoman Palestine was "awarded" to England, which then allowed Jews to repatriate, and the re-form Israel).

Half the oil from the Alaska pipeline doesn't go on the international market, it goes to Japan. Why? Japan paid for half of the pipeline in order to secure a certain amount of physically near supply away from mid-east instability.

I'm not always right, but the biggest problems that have the most hands-on effects are often more complex than they at first seem...

I don't think drilling in currently restricted areas will bring down the oil price either sooner OR later. I just believe that in a crisis "There will be slop"

Roosevelt was a great Democrat, but he authorized Union Carbide in Buffalo, NY to process Uranium Oxide into Uranium Hexafluoride gas (as quickly as possible!) which was shipped to Oak Ridge and Hanford for "the bomb". The federal govt has still refused to review the contamination that resulted, because they already know that Buffalo is one of the most polluted cities in the US. It should be a super-fund site, but it isn't.

When the crisis arrives, either presidential candidate will spin it to say that he "regretfully has been forced into taking the neccessary actions to yada yada yada..."

Anyone with electric bicycle experience will suddenly have an intent and focused congregation...

When the crisis arrives, either presidential candidate will spin it to say that he "regretfully has been forced into taking the neccessary actions to yada yada yada..."

That's entirely possible if it gets bad enough, fast enough. I think the energy problems will creep up on us. There will be ebbs and flows, but an inexorable march first towards very expensive energy and then not enough energy even if you can afford it. I suppose time will tell which one of us was right.