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Interesting juxtaposition of news headlines

June 6, 2008

The image below is a screen-grab of CNN.com a few minutes ago. The main headline is about how today’s huge spike in the price of oil is tied to the events of the day. And then off to the side is another story about how some Americans will keep paying for their gas guzzlers because their big vehicle is at the foundation of how their lives are structured. Many simply cannot get rid of it all of the sudden. Others are willing to pay extra just because they like it.

CNN reports these as separate stories … the red lines are the connections I’ve drawn.

I realize that the daily to weekly ups and downs on commodity prices are significantly influenced by geopolitical events, release of economic forecasts, and so on. But, I think it’s important to always realize the longer-term/bigger-scale influences as well. Our news is delivered in such a way that the short-term and the here-and-now is overly emphasized in my opinion.

I’m not saying it’ll be easy to change the American lifestyle. And I realize that I always harp on the demand side of the energy equation … it is because I’m a tad nervous about the supply side.

Although it is already forgotten in light of today’s spike, just a day ago, a report came out stating that:

Crude futures prices fell June 4 to the lowest level in a month in the New York market among indications that demand for gasoline is declining

Interesting. Demand declines, prices decline. There might be something to that!

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6 Comments leave one →
  1. June 6, 2008 1:26 pm

    Right on!

  2. June 6, 2008 2:31 pm

    As a very pro-environment person as well as having at least a little economics in my background, I have a lot of conflicts related to the this issue. My latest relates to the juxtaposition of urban dweller needs versus rural dwellers, as well as income level-related opportunities.

    I would have traded in my AWD sta-wag type for a Prius long ago, if I had stayed in that part of the country that’s pretty much always sunny and seventy degrees F. Once I moved to my current little corner in the mountainous, snowy part of the SW US, I realized that most of the populous in this neck of the woods cannot survive w/o AWD. For some, large diesel 4WD rigs are an absolute necessity (think hauling hay, horses, cows, trailers of various types, or oilfield workers – all on remote dirt roads that turn to foot-deep mudpits when wet). For some on tribal lands in this neck of the woods, that beat up 4WD pick up truck is the only thing that will get them food, water, and medical attention (many have no electricity or running water and live in very remote locations). It’s nice to talk about city folk changing out their SUVs for a hybrid, but for the rural and remote dwellers, unless a hybrid pickup truck is developed that can haul a trailer with three horses and a ton of hay, you’re asking the nigh-on impossible.

    Add to that many of the people who are rural dwellers in my area can’t afford an in-town home anymore. Even if they wanted to reduce their gas consumption, they couldn’t. They have to get to work, get their kids to school, often on snow-covered (think several feet) dirt roads. I’m sure that many would love to walk their kids to school and ride their bikes to work. But the reality in my area is that lifestyle is for the upper middle class (think urban professional double income with no kids) and for the wealthy out-of-staters, not for the locals.

    I don’t see a lot to resolve these issues in my area. The lower-income folks are just going to see their income drop even more. I hate to think about what is happening with many on the tribal reservations who purchase fuel in remote locations, often at prices up to $5 per gallon.

  3. June 6, 2008 3:49 pm

    Coconino … you bring up so many good points … one of the reasons I am interested in these problems is because they are so challenging. What I think is good is that we are having the conversation in the first place.

    I don’t think anything is impossible … we HAVE to solve these problems. The alternative is ‘collapse’ of civilization, which is not really an option. I agree with you … many people, especially the lower-income folks as you mention, are going to suffer from high fuel prices. That is something to consider and discuss about how to mitigate. But, as you even say yourself “…unless a hybrid pick-up is developed that can haul a trailer…” I’m optimistic that, in the long run, these prices will motivate that development.

  4. June 7, 2008 7:14 am

    My husband, MOH, is planning on driving his Prius to work in the winter – althought we will see how that works out. His drive is not very far (10-12 miles one way?), although we have a very steep, snowy to icy in winter, driveway. Because the Prius is front-wheel drive, we think that with studded snow tires he will be able to make it out, otherwise he will park down the street (?). 4WD is used by many in this neck of the woods (Ely), not by all.

    I think that one solution is that trucks and pickups, necessary for many kinds of work, are going to have to get better and better mileage, and are going to have to go hybrid at some point.

    The investment now, in a higher mileage vehicle, would pay off in the long run over a used, beat-up, old, paid-off pickup – but one needs the cash, usually, at the car dealership.

    Living in towns and cities will not be possible for everyone anytime soon, if ever. A rancher or miner may be able to cut mileage some, but many ranchers did that during the first energy crunch (70’s). Some mines in Nevada, where there is a long drive, say from Elko or Winnemucca, have vans to take employees to work, cutting costs, but that type of thing has been in place for years. Some companies where mines are close together like on the Carlin Trend, may pool van resources – I’m not sure about that. Other mines not already van pooling, could consider doing so – somehow these would have to come up with an equitable way to deduct costs from paychecks, fine for people with high mileage vehicles, maybe not so fine with people getting 50mpg on the way to work.

    Just some thoughts.

  5. June 7, 2008 7:17 am

    That should be – fine for people with low mileage vehicles – in the last sentence. Can’t preview comments!

  6. June 7, 2008 8:31 am

    Silver Fox and coconino … As you both point out, it seems folks in truly rural areas will likely not be able to significantly transform their modes of transportation (or modes of hauling, working, etc.) very quickly. I think that’s fine. I’ve lived in a city where it was definitely easier to not use a car all the time to get around. It seems that the areas in between urban and rural are the areas where some big changes could be made … better and more dense public transport is one of many. The cost now is a lot, the cost later could be much more.

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