“For the moment, watching gas prices roll relentlessly higher, we’re transfixed by the slightly terrifying novelty of it all.” — Bill McKibben
In even more earth-shattering news than the forthcoming fixed-gear apocalypse (now with its very own Facebook group!), the signs of the automobile’s waning hegemony continue to mount. “We’re on the edge of people changing their travel patterns,” says John Roberts Smith, mayor of Meridian, Miss., quoted by Damien Cave in the NYT, after years and years where “local officials never talked much about driving. It was just how everyone got around.”
Writes Nelson Schwartz: “The speed at which gas prices are climbing is forcing a seismic change in long-held American habits, from car-buying to commuting… A Ford spokeswoman says the market shift is ‘totally unprecedented and faster than anything we’ve ever seen.’ ” Echoes LA city planning commissioner (and former councilman and mayoral candidate) Michael Woo, in an LAT article by Martin Zimmerman, “throughout our history, we have grown on the assumption that energy costs would be low. Now that those assumptions are shifting, it changes assumptions about housing, cars and how cities grow… [it could be] the urban-planning equivalent of an earthquake.”
A nation which has long taken cheap gas (and unlimited automobility) for granted, where 5% of the world’s population gulps 44% of its gasoline, is now in the midst of whiplash.
The quick turnabout is particularly notable since the elasticity of oil prices typically requires a lengthy time delay:
In the short run, neither demand for nor supply of oil is very elastic. It takes time for people to replace their old guzzlers with more fuel-efficient cars, or to switch to jobs with shorter commutes, or to move closer to public transport… [according to U of C economist] Gary Becker… over periods of less than five years, oil consumption in the OECD dropped by only 2-9% when the price doubled… But over longer periods, consumption dropped by 60%. [The Economist]
Yet Americans have slammed on the antilock brakes, hard. Andrew Leopard, quoting a NYT article by Clifford Krauss, predicts that “2007 may end up being the peak year for gasoline consumption, ever, in the (past or future) history of the United States.” After decades of inexorable growth, VMT fell by 4.3% from March 2006-2007. The biggest monthly decline in driving ever (since record-keeping began in 1942) occurred in March 2008 — until May’s tumble beat it, and typically driving increases in May as “the summer driving season” begins.
The deepening plight of big SUVs, in particular, has me positively grinning with schadenfreude. Needless to say, I’m not disappointed in the least that the Hummer brand could die. In that WaPo article, Frank Ahrens notes, “it’s hard to imagine a product other than a handgun that so clearly splits the division between what some people perceive as a right and others perceive as social destruction… So, the Hummer may go the way of the brontosaurus and other lumbering herbivores, actual and metaphorical, all grazing peacefully in the growing shadow of the incoming meteor.”
Today, NPR listeners were treated to Yuki Noguchi’s report from a used-car dealership in suburban Virginia, where the owners of a year-old Escalade were shocked to learn that their vehicle had lost 60% of its value over a year. As an aside, this underscores just how fundamentally stupid SUV owners are — and exemplifies just how amazingly out of whack this misallocation of resources got. Even ignoring the marginal costs (much less the externalized social costs) of running the truck — the $100 tanks of gas, the $2,000+ annual insurance bill, the repairs and maintenance, the $40,000 or $30/day parking space — and even assuming that these guys paid cash and didn’t (shudder) borrow to buy it (much less lease it), the $40,000 in value they’ve lost in one year is nearly $110 a day that just went poof! Add in the $9.59 in daily interest (at 5%) forgone by spending the cash rather than keeping it in the bank (and, naturally, subtract any higher investment returns that one could reasonably expect), and that’s a loss of nearly $120 a day just to park that thing in the driveway, plus whatever it costs to run ($25/day, per Edmunds). Maybe $145 a day is worth it for some people, but I just don’t get it: own an Escalade or dine on a ten-course degustation every night? (Or even two hours in a limo [with full bar!] every day.) No contest. Nobody needs to spend that kind of money on a mere convenience, which is all that a big SUV amounts to in a city. (Another sign of how bad the market’s gotten: the latest wave of spam comments to this blog advertises used trucks.)
High gas prices have also particularly hit recreational driving (the sort that auto apologists always neglect to mention), and Americans are surprisingly willing to turn to alternatives. “In Nebraska, Ric Hines of the Omaha Hummer Owner Group — known as Omahog — stopped doing off-road trips this summer and started riding his recumbent bicycle instead,” reports Christopher Maag in the NYT. In another NYT article, Karen Ann Cullotta quotes Ewelina Smosna of Chicago: “We’re not cruising around anymore… We just park the car and walk around.”
The story’s similar in Chapel Hill, as reported by Bruce Siceloff in the 8 June N&O: “[Manny Opoku, 19, a UNC-CH junior, is] getting to know his neighborhood and getting to know his fellow students. In the era of $4 gas, lunch lasts longer and conversation runs deeper. ‘Before, you would just eat lunch and talk about sports, talk about girls — and then go, “Hey, I’m leaving.” And get in your car and leave. But now, because gas is so high, there’s nowhere to go… You run out of superficial things to say. If you want to keep the conversation going, you’ve got to talk about something deep. And you like it. Now we’re moving at a different pace.”
So at least in Chapel Hill, Garrison Keillor’s vision of the future has already come to pass:
So we will need to amuse ourselves in new ways. I predict that banjo sales will pick up. The screened porch will come back in style. And the art of storytelling will burgeon along with it. Stories are common currency in life but only to people on foot. Nobody ever told a story to a clerk at a drive-up window, but you can walk up to the lady at the check-out counter and make small talk and she might tell you, as a woman told me the other day as she rang up my groceries, that she had gotten a puppy that day to replace the old dog who had to be put down a month ago, and right there was a little exchange of humanity. Her willingness to tell me that made her real to me. People who aren’t real to each other are dangerous to each other. Stories give us the simple empathy that is the basis of the Golden Rule, which is the basis of civilized society.
Bill McKibben, the mightily eloquent proponent of localism, similarly writes about the hope ahead in a Post op-ed:
This spring, something… profound and defining has happened: Pulled back by the inescapable gravity of higher prices and the growing scarcity of fossil fuels, we’re starting a slow recoil into more dense and compact regions and localities. The frontier of endless mobility that we’ve known our entire lives is closing… We could debate whether those changes will be good or bad. I think, on balance, that they’re positive — that in the United States sprawl has eroded our sense of community, with grievous results.”
Even Jeroen van der Veer, chief executive of Royal Dutch Shell, appears to agree: “a society can work, can function and can grow even at higher fuel prices. It’s a way of life — you get used to it.”
How else might those changes prove positive? Time counts a few ways; among them:
We know that higher gas prices cause many of us to slow down and drive less — which means fewer people die. Early research into 2006 accident data suggests that many lives have already been spared. If gas remains at $4 per gal. for a year or more, expect as many as 1,000 fewer fatalities a month, according to professor Michael Morrisey at the University of Alabama at Birmingham and associate professor David Grabowski at Harvard Medical School, who calculated that estimate for TIME… A permanent $1 hike in prices may cut obesity 10%, saving thousands of lives and billions of dollars a year, estimates Charles Courtemanche, an assistant professor of economics at the University of North Carolina at Greensboro.
With obesity’s death toll in the U.S. estimated at 300,000, and an additional 2,000 lives saved from better air quality, that’s at least 44,000 American lives saved every year just by raising gas prices by $1 or so.
Our regret, of course, lies in the fact that this shift is sudden — “We have waited until we are at a crisis point to address transportation,” says Mr. Smith, the Meridian mayor — and that the direct gains are not accruing to Americans, to address our tremendous unmet social needs. As I’ve noted before, we’d be much better off if a “gas price escalator” had been installed in 2001; a $1 increase in gas prices yields $142 billion (“according to Stephen P. Brown, an economist at the Federal Reserve Bank of Dallas”), but right now $1 of that extra $1.50 per gallon flows directly to our overseas enemies.
In 2004, George W. Bush’s presidential campaign ran TV ads ridiculing John Kerry for supporting a $0.50/gallon increase in the gas tax. Gas prices have increased by nearly $2.50/gallon since then — but none of that increased cost can pay for needed infrastructure, help lower income families pay the bills, or address countless other national needs, since ALL of it is going to already scandalously wealthy oil producers and oil companies.
That gas prices will rise now seems a given; the question is whom those higher prices will benefit.