Gas prices are not something to crow about. To be sure, there are some benefits to higher prices—a rush to innovate, and a bit less climate pollution — but they’re a tarnished silver lining, at best, to an awfully dark storm cloud.
I can’t help it, I’m going to get a little preachy. Even though the drastic price increases are re-arranging conventional wisdom about our energy dependence, we need to remember that the suddenness of the spike is financially devastating to many families (and to many businesses too). It’s only for a minority that this is an opportunity to try out sleek new bike gear. For many more it’s an “opportunity” to stop saving for retirement, to pinch on necessities, and to run up credit card debt.
People will eventually adapt, of course, by switching vehicles, and perhaps even switching jobs or moving residences. (In fact, folks are already trying to adapt by switching to transit, driving slower, and cutting out far-flung vacations.) But in the near term, most people have few choices that can make a large difference for household expenses. Decades of sprawling land-use—abetted by short-sighted policy and, yes, consumer choice — means that many North Americans need oil.In many places it is truly impractical to get to work, or even to the grocery store, without a car. Until families have time to adjust by reducing gas consumption, high prices will take a big toll.
Finding this article interesting? Donate now to support our independent research!
Right now, it’s pretty difficult to adjust. Consider the housing market. It’s not very feasible to sell an energy-intensive house and buy something else with lower energy costs. As the housing bubble deflates, houses may not even be worth what their owners paid for them. And the problem may be worst in the outer suburbs where energy price worries are making home values fall faster. So some families are locked into homes they can’t afford—leaving them with high gas prices, and few options.
Compounding the problem, it’s often more expensive to buy in the dense, walkable neighborhoods where buses or bikes are a realistic option. So even if you could off-load your exurban house, you might have a tough time getting into a traditional urban neighborhood where you could realistically choose to trade a car for a bus pass. And while I admit that I take some small pleasure in seeing SUVs diminish in value, even that’s preverse: for most families, an auto is the second biggest purchase they make. It’s yet another financial hit.
If that’s not misery enough, the high cost of fuel is quickly propagating throughout the economy, driving up the cost of luxuries and necessities alike. It’s not just airplane tickets that are up because of oil costs — grocery bills are too.
Sure, in some alternate universe, rocketing gas prices could be a good thing. It’s just that we don’t live in that universe.
If, for instance, gas prices were rising because we had thoughtful and well-timed policy—an incremental carbon tax or auctioned cap and trade—then that would be one thing. If the public were capturing revenue from the price increases, and then investing in renewables, efficiency, and equity… well, then that would be reason to cheer.
But that’s not happening. Instead, oil companies are reaping huge profits from consumers who don’t have enough choices. It’s a financial blow to many families, and a knock-out punch to some.
Plus, high prices may not even be good news for the planet. Higher prices make carbon-intensive, environmentally destructive extraction a sweet deal—as the Canadian tar sands are already showing. Next up will be shale oil extraction in the Rockies and coal gasification, either of which is far worse for the atmosphere than what we’re doing right now. And no doubt, higher prices will amp up the pressure for oil exploration in Arctic wetlands or in the Yellowstone Basin.
It’s clear that we need to get unhitched from oil. It’s anathema to our economy and our environment. It will mean change: land-use change, technological change, behavioral change, and political change. The recent price spikes will stimulate some of that change, but in the most painful and least strategic way possible. The current hyper-inflation of necessities isn’t cause for celebration. For most families, it’s simply a tragedy.