A reader challenges OurMontville.com ("Yippee, America is great. That's a topic? One comment so far, and it's boring") to publish his post below:
I can remember filling up a one gallon gas can for a quarter down at the old Phillips 66 in Rockaway. The year was 1969. Today, gasoline is nearly that cheap in Venezuela (38 cents per gallon), and other oil rich nations (Nigeria, Saudi Arabia, etc.) The rest of us poor saps have to pay what's starting to look like a second car payment.
At what point will the price of fuel change our habits? The average American drives 20,000 miles per year, and uses approximately 1,000 gallons of fuel @ 20 mpg. At $3 per gallon, that's $3,000 per year, or $250 per month. At $5 per gallon, the cost goes up to $417 per month. Where do those additional $167 dollars come from?
From your "disposable income", presumably. You might have preferred to go to the movies or out to dinner, but now you'll literally have to burn that money. But you won't just spend it on gasoline. The price of fuel is a significant factor in the cost of shipping, travel, food -- pretty much everything that you can buy. So when the cost of fuel goes up, it's like the rising tide, which raises all boats.
For example, FedEx just issued its second profit warning in two months on escalating fuel costs and meager demand for US freight, sending the company’s shares lower. They spend over a billion dollars each year on fuel. When the cost of overnight delivery goes up (as it has and will continue to do), watch the value equation change for catalog and Internet retailers, who must ship all of their real goods. If the current trend continues, you can expect to pay significantly more for your holiday gifts (not to mention, everything else), even if you choose to ride your bike to Wal-Mart.
Speaking of bikes, here's a quick survey question. What is the critical price per gallon that would cause you to change your behavior in any of the following ways:
Commute with a co-worker
Take the bus or train to work
Sell your SUV
Cancel a holiday road trip
Consider riding a bicycle or scooter to do your shopping
Is it:
A) $4 per gallon ($333 / month) B) $5 per gallon ($417 / month) C) $6 per gallon ($500 / month) D) $10 per gallon ($833 / month) E) Higher
What will you do differently? Perhaps we can take a lesson from the Europeans. They're already paying about $6 per gallon in the UK, and almost $7 per gallon in the Netherlands. Perhaps that's why bicycles, trains, scooters and Smart Cars are so popular over there.
One final thought: What is the true cost of oil? So far, the Iraq war has resulted in the deaths of 3,873 US soldiers, and has cost $470,376,300,000 (that's $470+ billion). It will go up $2 million while you read this article. Watch it rise at http://www.costofwar.com/.
Nice article! This should be the core issue of the presidential debate. To answer your questions, I don't know where the money will come from. Things are already tight, but I guess we would eat out less. I think $5 a gallon is probably the magic number when I will drive less. Too bad the electric cars are so expensive.
Posted by
Anonymous
on
November 28, 2007 1:44 PM
What does this have to do with Montville? People have been saying that oil is running out for decades, and somehow it never does. I don't think the sky is falling.
Posted by
Anonymous
on
November 28, 2007 2:08 PM
Isn't Montville part of the world?
Posted by
Anonymous
on
November 29, 2007 10:34 AM
why not discuss it...this is a timely issue. maybe we should pull our heads out of the ground and deal with the problem instead of hoping it will go away. forget vote your conscience...this is vote your survival or maybe your kids.
Posted by
Anonymous
on
December 3, 2007 4:38 PM
Yes this is a very worthwhile topic, though I don't think riding bikes or scooters is realistic. That's just not practical given the distances most of us have to travel every day.
There's no secret why, even though our dependence on foreign oil is obviously a national security issue, no President has ever been serious about doing something about it.
You might demonstrate your support for The Detroit Project by trading in your SUV. Activism begins at home.
I would agree that walking and riding a bike or scooter is not realistic for every individual, or every season, but it could work for many people. We are the most obese nation in the world. The good news is that nature is about to put the world on a diet. It's been a nice energy boom, hope you enjoyed the hors d'oeuvres.
Posted by
Anonymous
on
December 7, 2007 1:22 AM
The Detroit Project is about treating our addiction to foreign oil as the national security issue that it is. We're fighting a war against the nations that sponsor terror, but right now we're paying for both sides.
The Detroit Project is not about making Americans drive tiny cars that don't suit our livestyles, but rather about urgently employing our nation's best and brightest minds in an all out effort to develop the technology to drastically reduce our need to send billions each month to countries that desperately want to kill us. We can do it if we treat the issue with the urgency that went into The Manhattan Project.
Our government should get behind it too, through tax policy. Removing the tax breaks for vehicles like the Hummer. Adding tax breaks for hybrids so that a Toyota Highlander hybrid costs less than the gasoline only version, etc.
A financial incentive to get consumers to purchase energy efficient technologies can really jump start those industries. For example we recently installed solar panels on the roof of an office building because the rebates offered made the payback period less than 7 years. We probably wouldn't have done it without the rebate. We should provide similar incentives for most fuel savings measures.
Oh, and I did trade in my SUV. I got a new one (American made, of course) that gets better fuel economy than the one it replaced.
One day I could be chaffeuring around a bunch of real estate clients and another hauling a load of construction materials. An SUV suits my needs, much as it does for many others.
I believe that using American technology as well as tax policy to bring new technologies to market can go a lot further than driving smaller cars.
Ron, I know you know who I am, but please don't use my name.
I've heard you say that we need less government not more, but here you are saying that the government should meddel more.
Aren't you the one who says that the free market is best to solve problems?
Posted by
Anonymous
on
December 10, 2007 9:25 PM
My opinion is that the government should only do what only the government can do. That means leave education, healthcare, mail delivery, airports, etc., to the private sector.
But since the authority to tax is given to the government, I think that encouraging energy efficiency through government policy is entirely appropriate.
I'd consider raising gasoline taxes, say 10% per year, and using the proceeds to fund research and maybe offer a billion dollar prize to whomever can come up with a commerically viable ultra fuel efficient SUV. Or improves battery storage technology to allow a commercially viable truly electric vehicle.
Rising gas prices would also encourage people to think harder about their vehicle choices and get manufacturers to put more effort into making fuel efficient vehicles since they know people are more likely to buy them with a certainty of rising oil prices.
Government should also eliminate the loopholes that exempt lots of light trucks from fleet fuel economy requirements.
There are lots of things government shouldn't do, but leading the charge to reduce our dependency on foreign oil isn't one of them.
Good comments Ron. But they won't ever happen because remember "the Saudis are our allies".
Bush and company make millions from oil.
Posted by
Anonymous
on
December 12, 2007 2:34 PM
I'm starting to pay attention to the price of gas, but it hasn't changed my driving habits yet. I think if it goes to $5 I'll probably think twice about a ride in the car. My commute is from suburb to suburb, so there's no practical option for me to take mass transit.
BTW, those smart cars were featured on Good Morning America, and I was surprised to hear that the gas mileage is not too impressive: 36 mpg. You can do better with a Honda Civic and plenty of other cars. Smart cars might make sense if you want something that's easy to park, or you're into "cute".
The real mystery is why there are so few diesel cars available. Europe offers dozens of models with diesel engines. Modern diesels are clean and very fuel efficient. Honda has a diesel that'll get around 60mpg -- that beats the Prius hybrid.
