What will happen if Gas Prices keep rising (U.S.)?

As gas prices keep rising – $4.69 in California, will the US experience some lasting change in transportation? Such as mass transit being developed? Or will the cost of mass transit, as well as the political inefficiency, and time it takes to build light rail, etc, keep things the same?

Will people begin buying smaller cars? Seems like that is just a temporary solution. As prices continue to rise, even increasing your MPG wont help, you could at most keep even. Also, as gas prices rise, the demand for hybrids and smaller cars increases, so you end up paying more for it. No point in paying as much extra to buy a smaller car as you will pay in gas if you had bought a medium sized one.

In other words, will anything be able to shock the US enough for us to develop european style transportation? Or will it be the same zombies (commuters) driving alone for an hour each way in heavy traffic, paying more and more?

If you mean a fundamental shift a la Europe, I seriously doubt it.

We HAVE mass transit. So, if you mean will it be USED more…sure, I could see some shift to it. If you mean will we build up a new mass transit system to take over from personal transport (a.k.a. cars and such), no…I don’t think so. Before the price of gas gets that high there will be several alternatives on the market…and they will be much more attractive to people than pouring in trillions of dollars on coast to coast HSR systems, new metros, etc etc.

That is happening already…though substitute ‘more fuel efficient’ for ‘smaller’ and you are more on track. Already we are seeing a shift to fuel efficiency being one of the major selling points on a car…instead of other parameters as in the past. Car manufacturers (as well as truck and SUV) now tout how fuel efficient their vehicles are, and in nearly every commercial fuel efficiency is mentioned…and the reason for that is simple. People are now factoring that in to the equation at a higher priority than they did in the past.

Not unless the price rises radically. Even today personal transport is relatively cheap. I still have friends in the DC metro area and many of them say that it’s still cheaper to drive in (assuming you have a parking space perk) than to take the Metro in…and even with the traffic it’s still quicker as well.

By the same token as the price of gas rises and people buy more fuel efficient cars then the demand for gas (in the US at least) will go down. And as manufacturers go into higher levels of production for hybrids and more fuel efficient cars the supply of such vehicles will rise to meet the demand. So…your premise is a bit flawed, except in the short term.

People will do what they are doing right now…they will make an (informal) cost to benefit assessment. If they will save more in the medium term by getting rid of their less fuel efficient car that gets 20 miles to the gallon by buying a more efficient car that gets 30 or more miles to the gallon then they will do so. In fact, that’s exactly what I did about 4 months ago…turned in my older less efficient car for a more efficient car…and while it’s costing me a bit more a month in payments than I save in gas I now have a new car…so it’s worth it (less maintenance problems for instance).

To paraphrase: Look around mon…dis look like Africa to joo? Short answer is…no, of course not. The US isn’t Europe, and no realistic projection of the cost of fuel is going to make the US look like Europe or develop a European (or Japanese) style transport system. It would take too long and cost to much. Remember…the Europeans (and the Japanese), besides having a completely different population density and geography have also spent decades building their system to it’s present state…they didn’t just decide one day to go for it. The US on the other hand has spent the last half century (or so) building OUR infrastructure to meet OUR needs…we aren’t likely to simply abandon it, or the mind set that goes with it. Not unless gas goes to some ridiculous level in a very short period.

YMMV of course.

-XT

A part of me wishes gas prices would go UP! (Not the part of me that has to pay for it, but the part of me that sees the long-term picture.)

Americans are pretty good about adapting once they get their proverbial kick in the butt, and this looks to be a good example.

As food prices continue to go up due to shipping costs, heating bills rise, the travel industry starts to tank, car companies start closing - all of which is happening - it will be a lot easier to be blunt and tell us that we have to bite the bullet and do something.

First up will be a long overdue move towards conservation of energy. Then there will be a willingness to invest more money in new technologies - solar panels for homes is currently quite expensive and takes years to recoup the costs, but when that starts to make more financial sense, it will become the norm and costs will lower. Same with smaller, more efficient cars - using hybrid technology and better batteries, etc.

Maybe I am a cockeyed optimist, but I think when the going gets tough, Americans are pretty resilient and quickly learn to adapt and demand alternatives.

Whoever wins the election in November is going to be faced with some hard choices, but it is going to be a lot easier to force-feed some difficult mandates down our throats when it is clear there are no real alternatives.

I’ve been seeing a lot more 50cc motorscooters on the road.

98 mpg must look good!

:rolleyes:

You seem to have Africa confused with a combination of Jamaica and Mexico.

The reference was from a book called Voyager…and the guy speaking was a guy with a Haitian/Jamaican accent. But your knee jerk reaction is much appreciated…especially the rolley eyed bit. Glad you didn’t ask first or anything…

-XT

Of course, once you’re at $4 per gallon of gas, $5 is only a 25% increase. That’s not going to change most people’s equations. And so on.

Of course the market responds to higher prices: Demand for Gasoline Down

So yes, you’re seeing the market at work here. Not just on the demand side, but on the supply side - investment in wind and solar is now booming, billions are being spent on the oil sands, billions are being invested in carbon sequestration and clean coal, new orders for nuclear plants are springing up around the world, and there is increasing pressure to drill off the U.S. costs and in ANWR.

The real questions are: How far can demand push the price curve up before demand collapses? And what will the economy look like if that happens? What if we simply can’t supply the energy we need to support a growing China and India?

We won’t run out of energy - eventually we know we can completely replace oil with other sources at a known, if slightly higher cost. The question is whether our lack of planning will put us behind the curve in being able to bring those new sources of energy online as needed. If not, it could get a little rocky for a while. But I doubt it. I think you’re going to see an economic transition faster than you ever imagined once it becomes truly necessary.

The most basic fact of economics is the one that all the professional economists never talk about: Price doesn’t matter–what matters is psychology.
Human beings are not rational creatures. When prices rise, sometimes people react calmly, and sometimes they panic.

compare:
Recently, housing prices went stark raving mad, totally bonkers and completely out of control. Millions of people were suddenly paying hundreds of dollars a month more than they were used to on rent/mortgage. But people didn’t panic and society didn’t collapse.

Now, millions of people are paying tens (not hundreds) of dollars more than they were used to on gas—but there is panic in the air, and talk of American society collapsing.

Anybody here remember 1973? I was only a kid, but I was aware of the panic as gas jumped from 20 cents a gallon to that huge psychological barrier of 3 digits. Gee whiz, how did we survive?

You’re right—
People can get used to anything. It only takes about a few months to forget that life used to be different.

People will just get used to more expensive gasoline. And in a couple of months if the price drops from $4.27/gallon to $3.86/gallon, expect to see people filling up at $3.86 with broad grins on their faces, since it’s such a bargain. Nevermind that just 2 years ago gas was in the $2.xx range.

People will just get used to budgeting more for transportation, and they’ll stop panicking about it. Because the price of gasoline is just one part of your annual transportation bill. You’ve got your tabs, your taxes, your insurance, your car payment, your maintainence, your teenager occasionally wrapping the car around a tree, your road maintainence, your road construction, and on and on. Yeah, it’s a bit of a sticker shock when you could fill your tank for $30 2 years ago and now it’s $60. But you still pay more for the non-gasoline component of driving a car, both directly and indirectly. Just because gas prices double doesn’t make your transportation budget double.

And even when/if it gets to the point where your transportation costs double, well, you’ll get used to it. When the price is high but relatively constant, people just figure that’s the price they have to pay. It’s when the price is increasing that people scream.

Huh? Now if I’m not mistaken, you live in New Mexico. What mass transit is available to you? Because here in Phoenix - larger than any city in NM - it’s virtually non-existent. In the rest of Arizona it’s literally non-existent. I’m having a hard time imagining what NM is doing that we’re not.

We have Rail Runner here…as well as city buses. We aren’t THAT backwards :wink:

When I said ‘WE’ I didn’t necessarily mean here in the Great Southwest btw (I grew up in Tuscon btw, so I know how it is in Arizona), I meant in general in the US we have access to mass transit. Especially on the East Coast they have a lot of mass transit options.

-XT

And those two facts are inextricably linked.

So far we’ve talked about the effects of gas prices directly on drivers. What about the longer-reaching effects? Everything travels by truck; as gas prices rise, so must food and consumer goods. Ultimately, someone has to pay the extra cost of transporting these goods, and it will always be the consumer. Food prices are already rising–what will be the long-term effects from that?

Well, the first step is that people are driving less. The second step has been switching to more fuel efficient transportation. The third step is greater use of mass transit, although that has been hampered by governments actually cutting back on mass transit, which is stupid. The fourth step will be greater density, with more people moving into urban areas and away from suburbs. Cheap gas basically created the suburbs and expensive gas will probably put an end to the suburbs.

So we will start to look more like Europe in that respect, but it will take some time. Step one and two are already happening, but step three will take a few years because governments don’t do anything quickly, and step four will take decades.

Have you been to the East Coast lately? Sure, Boston, NYC, and DC have mass transit, but in most of the south east and upper north east it’s not like that outside of areas immediately surrounding college towns. No buses pass through my town, nor a train, and that’s hardly unusual.

2/3rds of train riders and 1/3rd of bus riders live in NYC - wouldn’t this figure be astonishing if there really was significant mass transit coverage in the country?

Been about 10 years since I lived in the DC metro area. It’s not surprising to me that outside of the big metro areas that there isn’t as much mass transit though…there wasn’t when I was there either. Nor was there a huge demand for it…even the Metro in DC was under utilized in my time because it was expensive, kind of a hassle to use, and actually took nearly as long to get to where you wanted to go as driving would have.

It would be, especially considering that until quite recently there wouldn’t have been a market for such a system…which would mean that such a system would have been running for years in the red.

-XT

A lot of people say that there’s a problem of geography in the US, with most people not having an alternative to the car for travel. Well, Australia is very similar to the US, with one big difference – it has about 7% of the population, but almost exacty the same land area. Currently petrol prices are about AUD 1.60 per litre in the capital cities (it tends to be significantly more in the bush), and with the AUD at about USD 0.98, that’s about USD 6 per gallon. Of course, Australians complain about the price of petrol, but it doesn’t seem to be doing Australia any harm economically, since the AUD is currently moving upwards against the USD.

Australia is mostly desert and most of the population i believe is in certain relatively small sectors – inapposite comparison?

Not really, because local population density is generally similar. For example, the largest metro area in Australia is Sydney, with a population of abut 4.3 million, and an area of about 12,000 square km ( http://en.wikipedia.org/wiki/Sydney ). The closest metro areas in the US are Detroit–Warren–Livonia and San Francisco–Oakland–Fremont ( http://en.wikipedia.org/wiki/United_States_metropolitan_area ), with areas of about 10,000 square km and 18,000 square km, respectively. So, in size and area, the cities are similar in size (and the metro area with the lowest population density – the Bay Area – has the best public transport system, while that with the highest density – Motor Town – has the worst, oddly enough).

Sure, most of Australia’s population is concentrated on the east coast rather than the outback. But so what?

The contention that Europe is dense while the US is spread out and therefore mass transit won’t work in the US forgets that mass transit isn’t between cities, it’s within cities. We don’t need mass transit between Seattle and Atlanta, we need mass transit within the Puget Sound metro area and within the Atlanta metro area.

And the Eastern seaboard of the US is just as dense as Europe. The US is only less dense because we’ve got miles and miles of empty deserts and mountains and prairies and cornfields. But we don’t need to run busses and light rail out to the empty deserts and cornfields and mountains because very few people live there. We need busses and light rail to connect suburbs with core cities, and suburbs with each other. Sure, high speed rail along the Bos-Wash corridor makes sense, but we don’t need bullet trains connecting NY and LA to have mass transit.

Mass transit is what people would use every day to get to work instead of driving in a car, not what they use when they go on summer vacation across the country.