I think everybody in America should plan on $9-a-gallon gas prices. And we should think about what's going to happen when gas hits $12, and $15.
That's not to say those prices are imminent. They probably aren't. Predicting them is not a prediction with a timeframe. But sooner or later, that's what people will be paying for gasoline. (The British call it "petrol.")
Summer before last, I paid $30 for a tank of petrol for the first time in my life. Several times, at that. The price of a fill-up dipped back down below that for most of last winter, but something I saw on television a month or two ago got me to thinking. It was a regular feature they run on the local news that tracks the lowest gas prices in the area. It's meant to reward the area price leader with some free publicity, and, presumably, send viewers scrambling to save those last precious few cents per gallon by driving to that station to get the cheapest gas—although why anyone would drive miles out of their way (spending several cents' worth of gas, at least) to save several cents buying gas is a curiosity I cannot parse. The winner that night—the station with the lowest price in our area—was charging $3.09 for a gallon of regular.
The announcer's rueful comment was, "Well, if you can call that 'low.' "
Then we got to see a florist come on. The only time florists ever come on the news is when the channel is doing a piece on gas prices. This particular florist, with a concerned but fatalistic tone, reported to us how the high gas prices are really cutting into his profits and that he might have to raise delivery prices. "My customers really don't like it when I have to raise delivery prices," he said, in a sort of thinly-veiled threat, "but I may have to do it anyway."
So here's why I think everybody should prepare for $9 a gallon gas. (It's a long digression. I hope you're feeling patient.)
I live in a town in Wisconsin called Waukesha. That's pronounced "WALK-uh- shaw"—it's an Ojibway word meaning "little foxes." We have some neighbors named the Foxes, although in my opinion they don't adequately appreciate the coincidence. Waukesha also happens to be a great internet name, because there is only one in the entire country. Type Waukesha into Google, and it's us you get. Try that if you live in a Springfield or an Oakdale.
Anyway, I live on a very pretty street, one of the nicest streets in all of Waukesha, in a little ranch house that was built in 1957. The house is listed on the tax manifest at 1120 square feet. However, I think 120 of those square feet are phantom square feet, or power-of-positive-real-estate-agent-thinking square feet, because the house is rectangular in shape and one dimension is 40 feet and the other dimension is 25 feet. Those are the exterior dimensions. That would seem to me to limit the interior space to 1000 square feet, even at the very most optimistic, not counting the thickness of walls and so forth. But maybe that's the old math.
But the point is, it's a little, one-story ranch house.
It shouldn't be expensive to heat. But it is. In fact, it's a constant surprise to me, how much it costs to heat. If you took a thermal spectrograph of my little house in the winter, I'm sure the windows would register hot red; I'm sure the house has a great many little air leaks, and that the insulation has settled down in the attic. The house has a full basement—the furnace is down there—but, even though the basement gets darn cold in the winter, there's no insulation in the floor joists. The basement is pleasantly cool in the summer. In the winter, it's as if the house had been built on top of an iceberg. So, all winter long, the furnace merrily sucks down money. The bills are appalling. (Well, to me they are. I'm easily appalled, when it's my money.) I never set the thermostat above 64 degrees in the winter, but my gas and electric bill can zoom past $200 a month and laugh going by. On my budget, it's not that funny.
The problem is that my house was not built to suit the conditions I have to contend with. When my house was built, in 1957, probably nobody foresaw utility prices the way they are today. My house probably had an oil-fired furnace, originally. I can't figure out how much heating oil cost in 1957—the internet has failed me there—but I'll bet it wasn't much. I can just hear the original contractor saying to the original homeowner, "Well, we could put in extra insulation, but it would never pay for itself. Not with heating oil at thirteen cents a gallon." Or whatever it was.
My problem with heating costs is that I live in a house built for 1957 energy prices, but those are not the prices I get to pay.
I think the situation is going to prove to be very similar with regard to gas prices. We are accustomed to gas at $2 per gallon and we enjoy complaining about low prices locally of $3.09 a gallon. If you can call that "low." The problem is, I do think we can call that low. It's very low. Europeans reading this will be eager to tell us how much more than that they pay for petrol now. But for us, it's not low—now. Now it's on the high side. But compared to what we're going to have to deal with ten, twenty, and thirty years from now, my guess is that that's going to be low, all right—probably very low indeed.
If you're not afraid to extrapolate wildly, it soon becomes obvious that our entire society has been constructed and organized, with respect to the price of gasoline, the same way my house was built in 1957—with only prevailing conditions (and perhaps the very immediate future) in mind. The underlying assumption has been that fuel prices are going to remain low forever. We build large suburbs assuming that people won't mind driving five miles to get groceries or twelve miles to get shoes or twenty miles to go to a favorite downtown restaurant. We take jobs miles and miles from our houses and sit in traffic for numerous hours every week, burning gas even when we're sitting still at stoplights and in traffic.
This only makes sense for the current world—not the future one. What I'm saying is that we should think of the future world.
Our entire society now is analogous to my 1957 house. The assumption of cheap fuel flies in the face of the basic law of economics, because worldwide demand is rising rapidly and supply is beginning to tighten, and it's going to tighten much more in the fairly near future. No matter how you parse the arguments, theories, and data of oil geology and consumption, one shining fact is very, very clear: Earth does not have a limitless supply of fossil fuel. We're going to run out one day. Doesn't it make sense to prepare?
Summing up, far be it from me to complain about the professionalism of the local news team. They're fine people and they do a good job. However, I just don't think that threats regarding flower delivery really convey the urgency of the current situation with regard to gas prices...even though I like flowers as much as the next guy. I just wonder how differently we would act, and what different plans we would make, if everybody simply changed the item line in their annual budget to reflect $9 per gallon gas, and tried it on for size. Most Americans are living in a world where $1.50 or 2 for a gallon of gas is "normal" and $3 is "high," but wherever you live, and whatever is normal to you now, well, that's living in the present and the past. Instead of living in the past, or even just the present, we need to start thinking about the future. Because that's where we're going to find ourselves, soon enough.
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Copyright 2007 by Michael C. Johnston—All Rights Reserved
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