It has been a while since my last post, I am sure all two of my readers must have thought I died or that I gave up. Never. Well, I like to think I will never die, give up, maybe. But, it is time to tackle a 2006 "HOT" issue, that cooled some last winter, but is now climbing on the Political Hot-o-meter. That is Gas. I am not talking about the type I always seem to get before bed, but the type I'm can no longer get for under 3 bucks a gallon.
Gas prices are starting to soar again, which means that some complex explanations, graphs, charts and indexes are being employed on the Sunday morning talk shows. Over the past few months, Oil prices have been charging up, but gas prices were lagging behind. Today a report said that in the next couple weeks, Gas prices will soar 20 more cents a gallon, making the average gallon around $3.30. I am not going to bore you on an economics lesson of why oil prices go up and down, supply and demand, etc. I am also not going to blame this on OPEC (while they are somewhat to blame, they control less than half the oil production worldwide and are pumping at high rates).
The problem simply is, oil is not a renewable good. It is getting harder to find, when we do find it, it's expensive to dig up and where we seem to be digging it up is either in the middle of the Arctic, the hurricane expressway, or in countries that hate developed nations. While we can talk "fuel efficiency" or "bio fuels", etc...the only way we will ever get out of this mess is by either: a) creating a new and cheap replacement fuel, b) start using A LOT less gas or c) all of the above. The only real way it can be done, is not using as much while cheaper alternative is found.
A great professor of mine once said that if the government would just increase the gas tax several dollars more a gallon, people would use less gas and it would in the end solve our reliance on oil. Now, I am paraphrasing a bit here, but that was basically his point. He pointed to the fact that gas was much more expensive in Europe, and because of that people used mass transit. But, this becomes a chicken and egg question. Did mass transit develop because of high prices, or were governments able to tax more because of the widespread availability of mass transit?
America has no such mass transit. We rely heavily on our cars to get from our home to work. This is because of the 1950s phenomenon of "suburbs". Back then, oil seemed like it would last forever. There weren't as many people or cars in the world as there are today. For long distances, Americans prefer to use planes rather than trains. Europe has both, but an extensive network of trains. So, for long distances, Americans have to either drive or pay an arm and a leg for one of the most miserable experiences on a plane.
So, if we increase taxes (this is turning into economics) what will Americans do? We can't ride bikes or walk to work, like many Europeans, because our house is now 20 or 30 miles from our job. We can't drive, because our gas bill each week will be roughly $100 to $200 per car. There are no trains, or even enough bus routes. The economy would crash over night. So, it has to be a slow process...which, surprise, is what is happening right now, except we are still doing very little about it.
We have known for the past few years that the days of $.99 gallons of gas are long gone. Heck, $2.00/gallon gas seems like a distant memory. Yet, people are still buying cars that get 13 mpg and no one is pushing to construct more train routes or investing in mass transit. Heck, while we are spending money in other countries to fight (some say for oil), our roads and air system is falling apart. The federal and state governments are not putting the required public dollars in infrastructure and Americans are buying more fuel efficient cars, meaning the gradual natural progression of things is going to be a violent economic crash if changes aren't made.
Oil and gas will not be around forever. Even if we have deposits left 100 years from now, it will be so expensive to use, and we will have so many people around the world needing it...it might as well be gone. This is the direction we are heading, because more countries are becoming industrialized (i.e. China and India) and more people want cars and need oil and gas to run them. The only way to eventually solve this crisis is to develop new technologies to completely replace oil. BUT, this will take MANY years to develop. So, while we are all waiting on the mad scientist, other things must happen. These things in part require, unfortunately, a big government (preferably state, but in some cases will require federal). But, a large part if it can be pushed by corporate America, and a lot of money can be made. Al Gore's movie is already beginning to scare people, so if corporate America keeps pushing this green issue, they could make billions upon billions (and save the world at the same time, a win win).
1. People must start buying smaller cars and more fuel efficient cars. Hybrids are great, but there are plenty of cars that are cheaper and conserve more fuel. Car companies need to make cooler looking small cars, that are also practical. This is lacking big time, by all car companies.
2. People must start moving closer to work. The days of driving 20 or 30 miles into work, so you can live in the burbs are rapidly coming to an end. If you want to live in a smaller town, you need a job in that town. On the flip side, this in time will really help the real estate market. If you own land (not a condo) near large or even medium sized down towns, you could be very rich one day. While this will increase the cost of owning property, the flip side is you won't need a car...or at least two cars. Instead you can buy that really cool, but practical, small car.
3. Governments must start providing more money for mass transit. Start building the infrastructure now, so its there when the collapse happens. If you build easy convenient mass transit, then you can tax the hell out of gas to pay for it all. But, the mass transit must be in place first, before the price of gas soars. If oil/gas companies were really smart, they could be investing in these operations. One day, oil will be gone. But, Shell or BP could be operating a quasi private fast rail lines. It would be similar to toll roads, which in some places, are now going private, or like private parking decks. It would have a lot of upstart money, but these companies have been making billions in profits every year. To have a successful company, you must invest.
4. Government and private companies should be investing a lot more in rail technology. People will have a second option for mid range trips, that would take 3 to 8 hours in a car, but is always a pain and waste of money to fly to. Amtrak right now is a joke, because its limited in where it goes, and in many places, is slow. High speed rail options must be created in more places. In addition, more of our goods can be shipped on trains, rather than on trucks, sucking up less gas and not clogging and destroying any more of our already clogged roads.
The sad thing is, none of this will happen, at least, not without the next depression. That is because politicians, corporations and the American public, only care about the short-run, these days. While mixed use developments are becoming more popular, creating higher densities and the "work, live, play" mentality, the other components are not following. In the city of Atlanta, there is the push to move back in closer to the city, which will help save on the amount of miles driven every day. But, people still drive around in the city in huge SUVs and the mass transit rail is a complete joke (it only runs North/South and East/West, missing some of the biggest communities. This is in a big city, so the situation is even worse in smaller cities and towns.
Unfortunately, things are going to get much worse before they get better. To prepare for the end, buy a small car and move close to your job (within a mile or two). Also start saving. But, at least when the next great depression hits...there will be plenty of work projects to build these projects and people to employ (since all the corporations will be bankrupt). Too bad we don't have politicians, corporate execs and citizens that see beyond the next election cycle or quarterly report to stop this from happening.
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