Friday, May 23, 2008

Degassing over Gasoline

News sources have been buzzing since late winter over the price of gasoline and diesel. As we head into Memorial Day weekend, the topic is coming into an especially intense light. One survey I heard cited (sorry, I can't find the source) suggests that about a quarter of American families have changed their plans for the weekend, either shortening or canceling planned trips. An article on MSNBC states that an AAA survey shows a 0.9% decrease in the number of people intending to travel 50 miles or more from home. And an article in the San Francisco Chronicle shows a whopping decrease of 0.1% in planned excursions of the same distance. The same article later goes on to say:

TripAdvisor, a travel Web site, surveyed 4,000 people worldwide and found that 51 percent of American travelers are altering summer vacation itineraries because of soaring fuel prices. While 73 percent of those surveyed will take driving trips, 37 percent will take fewer road trips and 18 percent will drive shorter distances.

Let's take a look at what gasoline actually costs with all this "skyrocketing" rhetoric: according to NationMaster.com (homepage link- this is an interesting and useful site), on the world gasoline prices page, US prices are 0.77 (that's 77%) of world average. In a list from highest to lowest, we rank 102nd out of 141 countries listed. For each $3 we spend (and I'm rounding a little here), you would spend $4 (or its equivalent) in the average country. Or to put it another way, for the price we pay for ten gallons, you would get only seven and a half in an average country. (To get a clearer description of exactly what these numbers represent, move your cursor over the Definition button at the top of the bar graphs)

16 countries are paying double or more the price we are. Germany, at #19, and a country that I think most Americans would identify as Europe's industrial powerhouse, is paying 1.49 compared to our 0.77: not quite double but nearly so. In other words, quite a number of countries are paying nearly double the price Americans are. Their economies may not be quite as robust and productive as ours, but nearly so.

According to a recent report from The James A. Baker III Institute for Public Policy (57 pg PDF, 1.1 Mb) at Rice University, "The future of U.S. oil consumption is centered squarely on future developments in the transportation sector, which represents more than two-thirds of total petroleum use." A relatively small increase in efficiency or decrease in driving could have a relatively large impact on prices. (In the spirit of full disclosure, I haven't read this entire report yet, though I intend to. A further caveat: Most of the "Energy Forum Sponsors" listed on the seventh page are major oil producing or production support corporations- this suggests that the conclusions should be examined carefully for bias)

So my point is this: quit whining. Gasoline is far underpriced in our country. We as citizens and drivers could, if we chose, have a substantive impact in stabilizing its price with a few simple descisions. When I see a driver sitting in an enormous Hummer, complaing about how much it costs to fill his tank, and immediately afterward saying that he loves his vehicle and would never give it up (CNN around 3:00 PM today), I have no sympathy. Gasoline is a precious and, with known technology, essentially irreplaceable commodity. When the impact of "skyrocketing prices" reduces our travel plans between 1 and 0.1 percent, we ain't hurtin' that bad.

1 comment:

BadTux said...

The deal is that the high price of gasoline in Europe is due to road taxes. Railroads don't pay that price for fuel. Airlines don't pay that price for fuel. Electrical generating utilities don't pay that price for fuel.

Furthermore, Europe has functioning mass transit. The United States does not, outside of a few exceptions such as New York City and San Francisco. In most of the U.S., you must own a car, or else you are severely restricted in where you can live and what occupations you can pursue. For example, even minimum late-night shelf stockers at a grocery store must own a car in most of the United States -- the buses generally stop running around 9pm even in areas that *are* served by mass transit.

I can take mass transit to work. It is a 20 minute walk to the nearest light rail station. From there it is a 30 minute ride to the Mountain View Caltrain station, then a 10 minute ride on the Caltrain shuttle to get to the office. *OR*, I can jump into my car, and be there 15 minutes later, but at the cost of putting 20 miles of use onto my car. At the moment, the 1 1/2 hours of extra commute time to use what is laughingly called mass "transit" (bwahahahah!) is far more expensive (in terms of my per-hour billing) than the $4 worth of gasoline needed to get to work and back.

-- Badtux the Practical Penguin