Rising Gas Prices, Part One: Pain at the Pump, World Markets

Nothing speaks louder to our addiction to oil than the panic over rising gas prices. I've felt it too, I am driving a lot, and I mean A LOT to and from work these days. Just check out the tab I ran up at the pump during a recent fill-up. For the past two months, gas in Connecticut has steadily risen to just under $4.00/gallon when the above pic was taken. The upward trend hasn't slowed though, and more and more stations have surpassed the $4.00 mark for regular unleaded. Even when I shop for the very best price among the nearly two-dozen filling stations I pass during my commute (it's true, regional variation doesn't change that much), I can't best the $4.00 beast. Soon I'll be living and working in a place where I won't need to own a car, but that day hasn't come just yet (and it won't stop GM from enlisting MTV to help draw us young whippersnappers into the showroom).

If you follow me on twitter (@agmaynard) you'll remember I began on this train of thought a few weeks ago in a series of tweets about the origins of the pain at the pump panic. My thinking out loud went like this:

The response "use less oil" to those worried about rising gas prices must sting to the subset whose livelihoods depend on driving to work//But keeping costs cheap perpetuates dependency on that system, hmm... (assuming we can have any control over oil markets in the 1st place)//Hint: no single agent does, really, especially not @BarackObama//Doesn't the question then become, how do we gradually increase cost to shift paradigm while assisting the most impacted?//Increasing costs = decreasing oil subsidies, transfer the difference to fund renewable tech? But then there's the problem of design...//...that facilitates long car commutes in the first place and is a longer-term fix. Need to do some more thinking on this.//This comes to mind for some reason: "The only way not to think about money is to have a great deal of it" - Edith Wharton, House of Mirth//Panic comes partly from the pain at the pump, but I'm guessing more so from the anxious feeling that they have no other choice but to pay.//That panic goes away if there are viable (and cheaper) alternatives.

The parts I want to focus on are the beginning and the end, where I attempt to identify the motive of those beating the cheap gas war drums. For the purposes of this post let's ignore the middle bit about transferring oil subsidies to renewables R&D. What I meant to say there was more along the lines of assistance programs for those most impacted by rising gas prices, but regardless I don't think that'd be an even 1:1 exchange. Then of course there are the obvious political ramifications and deadlocks necessary to thwart Obama's socialist agenda ;)

SO, pain at the pump. What is it? Fear. Anxiety. A sense of being trapped, locked into a system, at the mercy of fluctuating global markets. Is anything more maddening, or hopeless, for a household struggling to pay the bills, who simply can't afford a bigger bite out of their income? Especially in this economy. This is a very real fear for those living from month to month, paycheck to paycheck. Budget dependability? What a pipeline, er-- I mean pipedream.

This panic reminds me of a similar fervor displayed by some residents from my hometown over a proposed Costco development two years ago. The retail giant would provide jobs and economic development, they said, and thus the proposed megastore should be unanimously approved by the Planning and Zoning Commission. During interviews with local planning officials for a paper I wrote on the plan, they told me that for these residents Costco symbolized relief from the sometimes crippling financial stress associated with the recession. It didn't matter if the developer's jobs and salary claims were overstated or that much of Costco's labor force doesn't originate in its host communities. It represented stability, and an escape from the doldrums of a down economy.

What's important to realize though is that I grew up in small-town Connecticut. We have a Walmart that was only approved because it was an as-of-right development (aka it conformed to all existing zoning regulations). What this means though, is that we are home to one of the smallest -- if not THE smallest -- Walmarts in the country at just over 85,000 square feet. A request at the time to expand the building into the surrounding parking lot was denied. The proposed Costco would have been almost double the size at 150,000 SF. In my opinion (when do well-researched opinions become facts, anyway?) it would have been disastrous for the intimate character of the town that, ironically, makes Guilford such a vibrant economic landscape in the first place. I digress; this is a post about gas prices, after all. The takeaway from this anecdote, though, is that sometimes people jump at short-term fixes to chronic problems because they don't have the luxury of looking further into the future. Their immediate needs aren't being met, or there's a very real threat that in the near term they won't be met.

CNN's John King summarized this message well during a broadcast a few weeks ago: "Your views on energy are driven by your bottom line."

So the next logical question is what can we do about alleviating pain at the pump, or avoiding it entirely? Drill baby drill, right? Riiiiiiiiiiight? I say no, and here's why. I'll be the first one to admit that I am not an authority on global oil markets, but I've been sifting through the literature for the last month or two and if I've learned one thing it's this: We're all connected. Take this graph, for example.



The United States is connected to other global economies through the intricate web of petroleum production and distribution networks. It is incredibly difficult for one nation, even the US which admittedly uses a disproportionate amount of global supply, to tip the scales through increased domestic production. When prices go up for us, they go up for (most) everybody else. The same goes for when prices drop, but there may not be much reason to hope for cheaper gas in the future.

Here's the reality as we move further into the 21st Century: Gas prices are not going to go down. At least not over the long-term. As developing countries like China and India continue to industrialize and as their bulging populations rise into the middle class, they are going to demand a higher standard of living (implication here, powered by fossil fuels). They have quite the role models (U-S-A, U-S-A!) and Econ 101 says that when demand for a product increases, so does price.

So if we're locked into the global market and prices will steadily go up and up and up regardless of an increase in domestic production, what are our other options? How do we get some relief from that pain at the pump?

In my next post I'll explore some of the alternatives to emptying your wallet at the gas station. I'll focus mainly on efficiency, hybrid/electric vehicles, and algae-based biofuels. Stay tuned for Part Two of this Rising Gas Prices series.

We Need Our Oil... (Part 2)

Yeah, yeah, yeah, so I said I wouldn't say much about the Gulf oil spill last time, but I found some interesting posts which complement the point I was making last week about how deeply embedded fossil fuels are in American culture, and how design can dictate our mobility choices.

The first is an article by Jonathan Hiskes of Grist entitled, "Can we just drive less after the Gulf spill? If only it were so easy..." Hiskes comments on interviews of gas-station customers conducted by NPR reporter Brian Mann. Mann concludes that despite the fact that many customers have been very concerned about the spill, "they also don't see a real connection between the spill in the Gulf and the decisions they're making about the cars and trucks they drive, and the number of times they fill up the tank in the week." Hiskes is quick to point out what I was getting at last week, which is sometimes (oftentimes?) Americans lack viable alternatives to automobile transportation, especially in a place like semi-rural upstate New York where these customers were interviewed. None of what they're saying suggests they don't understand the connection between their consumption of oil and the disaster in the Gulf, he says, "They're saying they lack good alternatives to driving. That's the real problem: Our cities and towns (and lives) are built around the assumption that we'll be driving our own cars and trucks to get where we need to go."

Don't believe that urban design and car use go hand-in-hand? Check out the following graphic:



Also linked from Hiskes' piece, this graph from Left for LeDroit depicts the relationship between pre-autocentric design in the Washington DC area and the ability of residents in these places to forgo car ownership. As you can clearly see, in the neighborhoods established before the rise of car culture it is possible to get around without an automobile. Hiskes concludes:

Conversely, people aren't going to walk or bike when amenities are too far away. They're not going to ride mass transit where it doesn't exist. They're not going to buy electric cars when they're not affordable, and when we don't have a network of charging stations. The way to help people drive less is to give them alternatives.

So if it is impossible to avoid car travel in some areas of the country, what else can people do in these places to stick it to BP? Boycotting BP is unfortunately not as straightforward as simply not fueling at their stations. Quite seriously, they have their hands in everything. As Ronald White of the LA Times reports, "Few foreign companies have ever become as deeply rooted in the U.S. economy as BP." Chris MacDonald of The Business Ethics Blog has even called a BP boycott "futile and unethical."

So even though tempers are hot right now and we want some sense of immediate retribution, we must shift our attention to longer-term strategies like investment in renewable energy technologies and related infrastructure, as well as legislation to promote this shift and hold the oil companies responsible for their actions. A little good urban design never hurt anyone either, but again this is obviously a long-term strategy. It took a decades for the oil companies to obtain the power they now have, and it will take a sustained, concentrated effort if we are ever to defeat the monster that we helped create.

We Need Our Oil...

I'm not here to say much about the BP oil spill in the Gulf of Mexico. I've kept quiet since the Deepwater Horizon sank almost two months ago today, and to be perfectly honest, there has been so much written and broadcast about it in the interim that any more would be beating a dead horse, or a dead pelican/sea turtle/sperm whale as the case my be. (Too soon? Yeah, I think so).

Also I spent the first week or so of the disaster glued to my TV and laptop, hoping for some shred of good news, but when that good news never came I did what any other sane person would do when trying to rationalize that which cannot be rationalized: I disassociated myself from it emotionally. There have been too many conflicting feelings bouncing around in my head to tease out a coherent narrative or opinion even if I wanted to. So let's keep it simple, shall we?

I came across the following video a few weeks ago and I think it sums up the situation in the Gulf pretty nicely:



Aside from being adorable and pretty darn funny there's an important take-away at the end after the CEO's faux change of heart. As justification for doing nothing to help those who are suffering, he tells Cooper, "It's f**king oil man, they'll need us again." As sad as this is, I can't help but agree. Over the last hundred years or so, we've built our society on a foundation whose success and stability depends on oil, and lots of it. This is also one of the reasons I actually don't believe this oil spill will have any measurable impact on investment in renewable energy technologies and the like. Oil (and the oil industry for that matter) is too entrenched in our way of life to disappear overnight, even in the face of the current catastrophe wreaking havoc on the ecosystems and local economies of the Gulf.

There's one more noteworthy nugget in the video above, and that's the message that comes up on the screen at the very end of the clip. In case you missed it, it read: "You're not mad enough to not drive your car." (Which also relates well to a political cartoon I came across in Newsweek a few days ago)



Though this perceived consumer hypocrisy is a closely related matter, and my support for consumer-based activism is well documented throughout this blog, to me this falls under a slightly different category precisely because of the role that oil plays in our lives today. In many cases there is only so much we can do to limit our consumption of it. What if there are no alternatives to driving our cars from Point A to Point B? (And in many places across the country, there are no alternatives, believe me). We can be as angry as we want at BP and still be justified in filling up the tank and driving to work because we live in a broken system that needs much more attention before these types of behaviors can be changed, and these types of judgments levied appropriately. (If you think this is a cop-out let me know and we can talk about it.)

For now we need our oil, we need our oil, and there is no escaping that reality. Yes, a transition away from fossil fuels is currently underway, but it has been painstakingly slow and it will take much more than an oil spill, even a really really REALLY bad one to accelerate that process.

I said I wasn't going to say a lot about the oil spill and here I've rambled on for far too long. Alright, that's all for today - I'm off to try and find myself some of that marmalade...