Saturday, April 08, 2006
In re higher gasoline prices
The New York Times has an article today about the inevitability of higher gasoline prices. Maybe, maybe not. As regular readers of this blog know, I harbor the view that the Times' predictions about the future of market prices are no more accurate than a random walk.
This particular article does contain a couple of bits worth commenting on. The first is buried 24 paragraphs into the story:
Betcha didn't know that the Bush administration is implementing sulfer regulation that is tighter than those in greener-than-thou Europe. You learn something new every day in the New York Times, at least at the end of the articles.
That leads me to the main implicit claim of the article, which is that consumers have arranged their lives in such a way that they cannot really cut back on gasoline consumption. The evidence offered for this is two-fold: a couple of man-on-the-street quotations, and the observation that higher prices have not, so far, had an impact on American gasoline consumption.
With all due respect to Mr. Teixeira, he's not using his imagination. We live in a suburb, my children do lots of activities, I drive to work, and we burn a lot of gasoline. I am also totally convinced that we could cut our gasoline consumption by at least 20% with no more effort than a little planning. Easily. Why don't we? A 20% reduction in annual gasoline consumption for our family is at most 500 gallons a year. Even at three bucks a gallon, the hassle of all that planning ahead and carpooling and not acting on impulse and occasionally riding a bicycle somewhere or making a kid actually freaking walk 1000 yards through Princeton's pastoral streets is not worth the measly $1500 a year it would save. We spend vastly more than that in a year on convenience food or eating out because we are too lazy to cook and don't want to do the dishes, so why wouldn't I spend it on gasoline to avoid all that annoying coordination? Gasoline, at least as deployed in all these endless local trips, is cheap.
Don't believe me? Look around you. People -- not some people, but most people -- drive down the New Jersey Turnpike at speeds that waste gasoline. Why? Because they are thrilled to spend a little extra money on fuel to spend less time in the car. Gas is cheap. And when they get to a long stoplight, they don't turn off the engines the way lots of people did back in 1979. Why? Because gas is so cheap that they can't be bothered with turning off the engine. Does anybody share a ride to work? Almost all our employees live near some other employee. Even though many of them drive hundreds of miles a week to and from our office, I am unaware of anybody who carpools to save money. Why? Because gasoline is cheap. Is carpooling a hassle? No more so than having to catch a particular train home like millions of Americans who work in the city and live in the 'burbs, but for some reason the idea of coordinating with a co-worker is too inconvenient. At least as long as gas is cheap.
There is nothing about the suburban "lifestyle," if that is even the right word, that prevents us from slashing our consumption of gasoline. We don't, because gasoline remains a spectacular value for the American middle class. Spending money on gasoline is almost always preferable to the alternative, which is at worst a miniscule reduction in the personal freedom to be spontaneous.
This particular article does contain a couple of bits worth commenting on. The first is buried 24 paragraphs into the story:
The problem is that some imports from European or Caribbean refiners might not be available much longer as the United States tightens it environmental regulations. This year for example, refiners must start producing ultra-low-sulfur diesel that meets standards much more stringent than those in Europe.
Betcha didn't know that the Bush administration is implementing sulfer regulation that is tighter than those in greener-than-thou Europe. You learn something new every day in the New York Times, at least at the end of the articles.
That leads me to the main implicit claim of the article, which is that consumers have arranged their lives in such a way that they cannot really cut back on gasoline consumption. The evidence offered for this is two-fold: a couple of man-on-the-street quotations, and the observation that higher prices have not, so far, had an impact on American gasoline consumption.
A. J. Teixeira, who works as an information technology specialist for the World Bank in Washington, says that since Hurricane Katrina drove up gas prices, he cut down on his family's twice-a-month weekends at their Ocean City, Md., beach house, and now does the 300-mile round trips only once a month. If gasoline prices rise more — as he expects they will — Mr. Teixeira might make minor adjustments to his routine, including carpooling when taking his two children to school or cutting down on trips to the mall.
"I struggle to adjust to the reality of higher prices," Mr. Teixeira said. "Our lifestyle is designed around the car and cheap gasoline. There's very little we can do about it to reduce our dependency on our automobiles — between the schools, the children's activities, the soccer practice, and the rest, nothing is within walking distance anymore."...
[T]he biggest surprise so far is that high prices seem to have had little impact on driving habits. Gasoline demand, which averaged 9.1 million barrels a day last month, remains very strong; in fact, it is up by 2 percent since January 2004 when oil prices began to rise. Analysts are puzzled.
With all due respect to Mr. Teixeira, he's not using his imagination. We live in a suburb, my children do lots of activities, I drive to work, and we burn a lot of gasoline. I am also totally convinced that we could cut our gasoline consumption by at least 20% with no more effort than a little planning. Easily. Why don't we? A 20% reduction in annual gasoline consumption for our family is at most 500 gallons a year. Even at three bucks a gallon, the hassle of all that planning ahead and carpooling and not acting on impulse and occasionally riding a bicycle somewhere or making a kid actually freaking walk 1000 yards through Princeton's pastoral streets is not worth the measly $1500 a year it would save. We spend vastly more than that in a year on convenience food or eating out because we are too lazy to cook and don't want to do the dishes, so why wouldn't I spend it on gasoline to avoid all that annoying coordination? Gasoline, at least as deployed in all these endless local trips, is cheap.
Don't believe me? Look around you. People -- not some people, but most people -- drive down the New Jersey Turnpike at speeds that waste gasoline. Why? Because they are thrilled to spend a little extra money on fuel to spend less time in the car. Gas is cheap. And when they get to a long stoplight, they don't turn off the engines the way lots of people did back in 1979. Why? Because gas is so cheap that they can't be bothered with turning off the engine. Does anybody share a ride to work? Almost all our employees live near some other employee. Even though many of them drive hundreds of miles a week to and from our office, I am unaware of anybody who carpools to save money. Why? Because gasoline is cheap. Is carpooling a hassle? No more so than having to catch a particular train home like millions of Americans who work in the city and live in the 'burbs, but for some reason the idea of coordinating with a co-worker is too inconvenient. At least as long as gas is cheap.
There is nothing about the suburban "lifestyle," if that is even the right word, that prevents us from slashing our consumption of gasoline. We don't, because gasoline remains a spectacular value for the American middle class. Spending money on gasoline is almost always preferable to the alternative, which is at worst a miniscule reduction in the personal freedom to be spontaneous.
1 Comments:
By 
Lanky_Bastard, at
Sat Apr 08, 05:38:00 PM:
I was going to guess the TigerHawk family conserved gasoline for foreign policy reasons.
Gas prices aren't prohibitive to me. With an income around double minimum wage, I'm too poor to own and insure a car,let alone fuel it.
The value of an extra fifteen hundred dollars depends on your worth. And the worth of not pumping an extra fifteen hundred pounds of gasoline into the air every year depends on your values.
