What if gas was $20 a gallon?
On the Today Show this morning I saw author Christopher Steiner talking to Matt Lauer about his new book “$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better.” I have to admit as a guy who rides his bike 3 miles to work every day, even when gas hit $4.00 I never even thought twice about it. But $20 a gallon?
Steiner doesn’t start there, however. He first starts with gas at $6 a gallon, and says it means this:
The death of the SUV
Crumbling road infrastructure
Healthier Americans
Most of this is pretty self-explanatory. No one will be able to afford SUV’s, and with more people switiching to smaller more fuel efficient cars and other forms of transportation gas tax revenues will drop. The interesting thing to note here is that Americans get healthier: according to University of North Carolina professor Charles Courtemanche for every $1 per gallon that gas increases, obesity drops 10%. The 10% drop in obesity equates to $11 billion savings in the health care system
When gasoline hits $8.00 per gallon, the situation gets far worse:
- Major airlines fold
- Vegas resorts and Disney World close
- Families live closer together
When gas hits $8 per gallon
Not having read the book yet, I am not sure how Steiner comes to this conclusion, but from the interview it sounds as if the cost of running an airline will prohibit many of them from continuing operations when gas hit this price. No wonder Vegas wants a bullet train from So Cal right to its very door.
$14 per gallon brings some interesting news too:
- Walmart dies
- More mom-and-pop stores
- Factories return to the U.S.
Steiner notes that Walmart has 6,000 suppliers 80% of which are in China. They rely on a fleet of 7,000 trucks to move good from ports inland to 4,000 stores. That will no longer be cost competitive when gas hits $14 a gallon.
Finally at $20 per gallon:
- 90% of Americans will live in cities
- 70% of Americans will never own a car
- Nuclear reactors will power everything
All of us have heard the “peak-oil” pronouncements over the last 30 years so those with a sense of history will probably look at this book and say “huh.” I haven’t spent enough time thinking about this to form a real opinion. Still it’s fascinating to consider the implications of gas prices, which if they were actually controlled by the invisible hand, should be rising as world-wide demand has never been higher.
Tags: Gas
Economic Development, Economy, Social Science, Transportation | admin July 24, 2009
1 Comment
Other Links to this Post
RSS feed for comments on this post. TrackBack URI
By Charles, July 24, 2009 @ 3:15 pm
Heard about this on Marketplace yesterday.
Of course this becomes meaningless if we can achieve independence from fossil fuels. Hydrogen, electric or biofuel powered transportation and nuclear or renewable power grids, using the power readily available in the environment and we won’t need gasoline.
Otherwise, very interesting to see the effects of suburban sprawl and international trade reverse.