Shifting Gears   Baby Boomer…Member Life 2.0…Wife, Mother, Grammie…Bicyclist…GoldWinger…Mensan…Girl Scout…Reader…Knitter…Rotarian

Women of Substance pal Vickie suggested the book “$20 Per Gallon” by Christopher Steiner a few months ago and I knew immediately that I’d enjoy reading it.  After all, I’m an economics junkie and this book throws in all kinds of sociological predictions to go along with the economics of increased gas prices so it’s right up my alley.

In a few places I’ve gotten a bit bogged down with the minutia so I’ll admit to doing some skimming – plus I’ve also read a couple of novels along with this book to keep from getting too immersed in something so intellectual!  After all, my gray matter needs some candy in the form of lighter reading.

In case you plan to read this book, you can quit reading now because I’m about to do a recap of the first few chapters!  More will follow as I finish the book!  Just remember that all of these predictions are cumulative as the price of gas rises – and the author only focuses on the price at the pump.  We all rely on a myriad of products daily that use oil and the changes from those price increases aren’t included.

$4 Per Gallon – In 2008 we came precariously close to the $4 per gallon mark in Springfield – and when we were traveling in California in June, 2008, we actually paid $6 per gallon in Big Sur.  That was a day when we gave thanks for being on a motorcycle.  We also became acutely aware as we rode through the western US that gas taxes play a big part in the price paid at the pump.

I remember in 2008 when the price in Springfield was over $3.50 per gallon that I planned my trips more carefully, coasted on hills and drove at a lower speed – all those things I should do routinely but unless it hits my bank account, old habits are hard to break.  But the gas prices plummeted and I reverted to how I’d driven for years.

According to Steiner, here’s what we can expect when gas hits (and stays) at $4 per gallon:

• Americans will drive fewer miles – case in point, in 2008, we drove 100 billion fewer miles than in 2007.
• The costs of all energy will climb as oil prices climb – creating opportunities for innovation for some.
• We will rethink hybrid cars, smaller cars and other forms of transportation.
• Families cut back on vacations
• SUVs stayed in the garage and the compact cars and sedans were driven more often
• But the changes won’t be too dramatic at $4 a gallon as we’ve already seen.

$6 Per Gallon - this book was published in mid-2009 but I’m betting most of it was written by the end of 2008 which is probably why the author predicts gas at $7 per gallon as early as 2010.  We still have six months to go to see if we hit that mark but I’m betting/hoping we fall short.  But at this price, Americans will be truly shocked and deeply affected – we may not be able to convince ourselves that gas in the <$3 per gallon range will be available again.  Now we’ll really have to make some changes.  Such as:

• More cars will come off the roads and the majority of those will be SUVs – a model that will virtually die.
• Americans will embrace diesel fuel at the $6 per gallon level
• Fewer lives will be lost – we’ll be driving fewer miles = fewer accidents = fewer deaths – especially when you take the SUVs off the roads since they have the highest number of deaths per million miles driven.
• We may get skinnier – using public transportation will introduce an element of walking to the access points – or people may depend more on bicycles.
• Fewer gas emissions will clean up our air and help our lungs
• Sustaining our infrastructure will become more difficult – the gas tax that supports our roadways is based on a per gallon rate and not a % of the cost – fewer gallons consumed means less tax revenue to repair and maintain our roads and bridges.  The result could be an increase in toll roads.
• School districts won’t be able to maintain their busing policies – the cost of transporting students will be far beyond what school boards can afford.  The choice will be busing the students to schools – or having teachers for them when they get there.
• Youth in sports teams will travel less – they will revert to the days of playing opponents in their own backyard instead of across the state – or even the country.
• Law enforcement will return to foot patrol to save on costs which bodes well for better police protection.

$8 Per Gallon – now our economy is really going to see some major changes!

• The skies will empty!  The major airlines stand to lose the most in the world of $8 per gallon gas.  They already have heavy debt loads and many of them have been through bankruptcy.  According to one expert, the major US airline with the best chance of survival is Continental.  Smaller airlines such as Southwest and Jet Blue should also stay in business.
• Foreign countries will lose their national carriers with international routes being covered by Continental, Air France, British Airways, Lufthansa, and All Nippon Airways.
• Fewer airlines = fewer planes = fewer routes = increased fares.
• The downturn in the airline industry will be felt in manufacturing as well and will include massive job losses in building, maintaining and running the planes and airlines.
• Families will concentrate in one region – no more flying home to see the family over the holidays or summer vacation – and driving costs will be prohibitive too.
• College-bound students will look for schools closer to home.
• Resort towns may become ghost towns.
• Las Vegas could go bust.  Statistics show that few visitors to Vegas actually drive so while it’s unlikely people will quit gambling, they will do it closer to home and not in Vegas. 

I’m now on the chapter where gas goes to $10 per gallon – stay tuned and see what predictions there are for our lives at that price point.  Unless you’re already out the door pricing hybrid or electric cars and thinking of where to unload your SUV or gas guzzling pickup truck.