The rising price of gasoline

Aug 01, 2008
<p>With gasoline prices on the rise the consequences can be felt across the global economy</p>

Over the last few years, as gasoline started costing more and more, I wondered why no one was protesting.

To be sure, Americans are still paying only half what Europeans are accustomed to. Even so, for a long time the steady increases did not induce significant behavioral changes in a population that seemed to think cheap gas was constitutionally guaranteed by the Bill of Rights.

Instead, even those who accepted that fossil fuels were a rare, disappearing resource, and that their continued use was affecting the climate, responded by buying bigger Hummers or by commuting even longer distances from the outer suburbs.

The invisible hand of the free market can flap with feigned ineffectuality for some time before crashing down like a 50-megaton fly swatter, however. Most predictably, the bottom has belatedly dropped out of the SUV market. The brontosauruses of the road, the Winnebago and other recreational vehicles, are also going the way of all gas guzzlers.

Oil has seeped into every crack of the economy. Recently Kellogg’s reduced the size of its cereal boxes – a disguised price increase. I have written before about the baneful effects of turning food into fuel, but a smaller portion of cornflakes was not what I expected.

House prices in places that involve a long commute have fallen far more sharply than in the cities. Public transport usage is soaring. Freight costs are rising and manufacturers are reopening their mothballed US plants and repatriating production back from China.

Airlines are doing all that they can to lighten their load and reduce fuel consumption, although it’s a lousy excuse to stop serving meals. Some are considering breaking up the longer non-stop flights because it takes so much fuel just to carry the fuel over thousands of miles.

There are clearly seismic effects looming for the world economy. I can’t help thinking that anyone who still owns shares in airlines or car makers – especially US ones – has somehow decided to go down with the ship.

So what is the investment of the future? Forward to the past! We may not be bringing back the horse-drawn carriage, but the long-abandoned electric car is now being raised from the dead by high fuel prices.

Other prematurely abandoned technologies are due for a reincarnation. If flights are going to take longer as planes fly more slowly and stop more often, and it’s too expensive to send cargo by jumbo jet, then surely it’s time to revive the airship. Not the small, albeit creditable version made by Airship Industrie before it went under, but the big passenger and freight-carrying zeppelins: Hindenburgs and R101s with low fuel consumption.

Flying will soon be an expensive luxury, so let’s make it luxurious. Just imagine a stately, silent flight over the abandoned JFK, then mooring to the mast atop the Empire State Building.

It’s a leap ahead, of course, but surely our ingenuity can rise to airships that use all the hot air being generated by – and about – global warming? Watch out for my Hot Air Inc IPO, coming soon.

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