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      « The Three Trouble Spots in the World | Main | Why is Gas so Expensive? »
      Monday
      Mar122012

      Can We Survive the High Price of Gas?

      In last week’s column, I addressed the issue of why gas prices are so high. If you did not ask yourself some questions from that article, you might think about how it is that we were using gas at alarming rates during the Vietnam War and as soon as the war ended, we had no gas to fill the pumps; or why did gas prices skyrocket while motor oil remained at the same price for a decade or so?

      But this week’s column is about surviving these high energy costs. The dilemma is far worse than just the extra prices at the pump (which is bad enough). The prices have increased so rapidly that the average person can barely afford the cost of one week’s worth of gas for one car, let alone multiple cars.

      In1993, I finally bought a smaller car (a new Chevy Beretta) with a V6 instead of my usual big V8. It was a surprisingly fun downsize. At that time, I used to take $35.00 out of my check each week for gas and incidental expenses (Yes, I am truly a fiscal conservative). I bought a tank of gas for $12.00 and the rest took care of my weekly expenses. If I ran out, I considered myself to be done with incidental spending for the week. Now, my 4- cylinder car that gets 40 mpg highway costs the whole $35.00 to fill.

      There is no doubt that the cost of gas is causing changes in our daily behavior already. Many who had resisted the change have finally given up their big cars, gas guzzling trucks and vans. Many have stopped eating out as much. Others have cut back on other expenses. For more people, walking and bike riding are the only feasible means of transportation. The scary thing is that we have not come close to the end of the price increases, if predictions are correct.

      I am an Amateur Radio operator (Ham Radio) and talk with people all over the world on a daily basis. A few days ago, a radio contact from Canada asked me about the price of gas here in Missouri. I told him it was $3.55 per gallon. When I asked him what price he was paying, he responded with a price that nearly caused me to fall off my proverbial chair. His price is $7.00 per gallon. If $3.55 is hurting our economy now, just imagine what $7.00 per gallon is going to do to us.

      Of course, we can turn to the hybrid or electric car, right? Unfortunately, there is a cost involved in electric cars which nobody wants to address. Electricity does not come from nothing unless you can capture a lightning bolt. There is a cost to electrical production and it generally, but not always, involves the burning of coal. There are some major issues to consider regarding this fuel source: first, we currently sell our excess coal to China. Second, coal produces carbon and particulate emissions that exceed the problems associated with internal combustion engine emissions. Third, the demand for electricity will increase, thereby causing a higher demand and therefore higher electricity costs. Also, the cost of an electric or hybrid car is significantly higher than a standard car; and, while these vehicles are improving dramatically, they still have very limited driving range. Last, replacing the batteries in an electric car is too expensive for most to even consider. So, at the present time, the cost of buying and maintaining an electric car (one that comes with many limitations such as driving range, speed, reliability, etc.) would pay for the increased cost of gas for a very long time.

      When I was a teacher, I demonstrated how a single item affected the entire manufacturing community and everything else in the world. I would use something as simple as an ink pen and ask the students to determine how many people it took to make the pen and get it into our hands. The answer is surprising when you begin to think about it. The pen is made from plastic and metal. It has a spring and color. It has been machined. It has ink which requires pigment, oil and other chemical components. Machining, molding, printing, packaging, advertising, stores and their employees, trucks and airplanes for transportation, people to mine the components, machines that are needed for the mining, people that make the machines, people that make and maintain the trucks and machines and on and on forever. The answer is that almost everyone in the world is required to make the pen and get it into your hands. So, what happens when the cost of anything increases? The answer is simple. The price of everything escalates. If gas costs $7.00 per gallon, the cost of anything that uses gas will rise. Imagine the cost of airplanes, buses, and anything related to traveling, but also consider the cost to bring groceries and other products to our stores and to your table. Everything you use and buy has to get to you via truck, train, plane or some other vehicle. At $7.00 per gallon, the cost of the gas will not be our only worry.

      John Wayne Tucker

      http://johnwaynetucker.com/congress

       

      © TBP Publishing 2012, The Bold Pursuit®. All Rights Reserved.

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