Sticker Shock At the Pump
August 22, 2005
It cost me $40 to fill up our old Toyota Corolla the other day.
It just so happens that our kids are going to a new preschool across town in September, and we had been thinking about getting a bigger car, in order to carpool with other families. Suddenly sticking with the old compact, taking the bus, and staying close to home seem like good ideas.
If oil prices keep going up, as nearly everyone seems to think they will, a lot of Americans may find themselves feeling a lot more green. Is there any greater symbol of our nation's hubris than the giant SUVs that have become so ubiquitous on the roads? Still, there's no sense in getting scolding and self-righteous. Individual consumers can only make so much of a dent in America's oil-guzzling habit, which sucks up 25% of the world's oil supply. The President's energy bill doesn't even make a modest pass at raising fuel-efficiency standards. And auto makers are using hybrid technology to give cars more power, but not to get better gas mileage.
With oil prices hitting $66 a barrel, as Bloomberg reports today, and no relief in sight, it is becoming apparent to anyone who drives that we can't keep living our lives as if we could always count on an endless supply of cheap gas.
In his excellent cover story in the New York Times Sunday magazine yesterday, Peter Maass points to all the signs of the fading of what might soon be known as the Age of Oil. Already Saudi Arabia, which produces about a quarter of the world's oil and far, far more than any other producer, is resorting to water-blasting technology in its largest oil fields--a sure sign, despite the country's protests to the contrary, that the supply is "peaking". Saudi Arabia can't possibly keep pace with new demand for oil from the U.S. and China, Maass writes.
One of the most interesting figures in his piece is the number $40--the amount of money it now costs me to fill up my tank, and, coincidentally, the price per barrel at which investing in alternative energy becomes "economically viable," according to Maass: "When crude costs $10 a barrel or even $30 a barrel, alternative fuels are prohibitively expensive," Maass writes. "For example, Canada has vast amounts of tar sands that can be rendered into heavy oil, but the cost of doing so is quite high. Yet those tar sands and other alternatives, like bioethanol, hydrogen fuel cells and liquid fuel from natural gas or coal, become economically viable as the going rate for a barrel rises past, say $40 . . ."
You can almost feel the tipping point plunging us into a new reality.
Those monster trucks already look like dinosaurs.
Haass spends his article carefully balancing quotes from government officials and oil executives in this country and Saudi Arabia who take both sides of the debate about whether oil production is in fact "peaking," and about to begin its inevitable decline.
But the main point of his story is that no one can know, nor does it really matter, exactly how much oil there is left to extract in any particular area. If the Saudis could keep prices low enough to stave off the development of alternative fuel sources, they would, his article suggests. Whatever short-term advances in extraction technology or discovery of new fields, "the era of easy oil is over," as even Chevron now says.
There are myriad reasons why our government should be investing in alternative fuel sources. Dependence on foreign oil, fighting wars over this dwindling resource and at the same time financing our country's enemies with our gluttonous gas habit, the now near-global-recession-causing price of crude, the massive environmental impact of greenhouse gases--just to name a few.
But perhaps we will finally be propelled into action by simple sticker shock. Let's hope $40 is enough to change not just our individual habits, but to kick start a shift in our whole culture.