Fantasy Exercise: Tommorrow Gas is $10

[Chuck]

Only way it would happen is an embargo, but imagine tommorrow gas at the pump is $10 a gallon for personal use. Truckers and commercial drivers are exempted. It would change our lifes in a lot of ways. Frankly, I think many of them would be for the better. See if you can think of the ways.

[tbaleno]

It would be devistating. How would comercial use be subsidized? It would put a HUGE burden on the government. $3 was painful. $10 would pretty much be the same thing as not having any gas at all.

[lakedude]

OMG! What a great Fantasy Exercise!!

It would be AWESOME if gas was $10 a gallon. People might actually think and plan ahead for trips. They might walk or ride a bike more often. They might combine trips, carpools and drive less in general. They might be more friendly to their neighbor: "Hey I'm going to the store, do you want me to get you anything while I'm in town?" Some might actually admit that they don't need a huge hulking SUV to get to work every day.

The only downside to gas being $10 a gallon is all the whining and complaining non-hybrid drivers would force hybrid drivers to endure. How is my mock sympathy? " I feel your pain SUV brother. Some of my best friends are SUV drivers, I even dated one once in high school. How much to fill up (snicker)? OMG how can you afford that? It must make you feel awful having to spend that much on gas every week. Nah, don't get a hybrid, that high mpg stuff is all hype...."

Tom I totally disagree that $10 a gallon would be the same as no gas at all. If you took the average SUV driver getting 14 mpg at $3.00 per gallon and put them in a hybrid getting 47 mpg at $10.00 per gallon the cost of gas would be about the same.

If gas was $10 per gallon alternatives would start looking attractive. That short range silly looking electric might not look so silly with gas at $10/gal.

[brick]

Assuming commercial fuel were subsidized (and I don't really think that's a reasonable stipulation, but OK) it would still be a disaster. Yes, the idiots who buy tanks to commute in would be given pause for consideration. But the value of those vehicles would sink so low so fast that they wouldn't be able to trade them in for the smaller and more efficient cars, which would be vastly overpriced and nowhere near in sufficient supply. Welcome to the world of the $40,000 Prius, the $30,000 HCH-I (yes, used).

People working high-tech jobs like myself would be fine because, frankly, I don't really need to be at work to do my job. I only show up because it's easier to walk out to the shop to talk with the manufacturing guys, or holler across the aisle to another engineer. But realistically I could be just as productive from home with my cable connection and a phone. So I would need to drive six, call it ten miles a week to get food and other necessities and in good weather I could walk that pretty easily.

But that's high-tech land. Blue collar land would be decimated. Those guys have to drive to get to their jobs, they don't make a whole lot of money, and their choice of vehicle tends to be just as bad as anybody else. Maybe they would make it, but I know for a fact that some of them wouldn't. If only a few guys can't come to work anymore overall productivity suffers, our profit margins fall, our customers get annoyed, and our business hurts. Even the hit to morale will do some damage. Maybe not permanently, but the adjustment period would be years, not weeks or months. Since I depend on them to build the things I design, I'm screwed too. Apply that to just about every workplace and you get idea that this wouldn't be such a good thing.

I'm all for relatively expensive fuel (though preferably through taxes, and preferably taxes that would go to viable alt fuel programs...probably a pipe dream given how our government operates) but not to the point that it throws our working class and our economy into the gutter. We need to make people think, not starve. And I'm afraid $10/gal would cause the latter.

[Chuck]

I'll admit it's almost impossible to social engineer a situation that would target discressionary gas use - and politically impossible, barring a 1973-style oil embargo. 1973 and WWII are the situations I imagine.

In the long run, it would be a turn for the better, but definitely painful at the outset. It might take a Federal bailout to save Ford in such a situation.

Brick and lakedude mentioned many of the things I was expecting. Later I'll link the editorial that inspired this thread. He originally speculated on $6 gas, then decided to up it to $10. A spike to $6 would be massive enough.

The suburban market would probably get even worse, but help the downtown real estate.

Gas guzzlers would be abandoned, while there would be a premium for hybrids, motrocycles, bikes, maybe even good running shoes. Racing to traffic lights and other wasteful driving habits would become a fading memory.

Perhaps the greatest irony of all would be by the people that have blasted the Mother Jones article on Wayne's hypermiling - they would be doing it. They would resent hybrids for a differnt reason - some would be so fuel efficient, the drivers could afford not to hypermile.

[brucepick]

$10/gallon gas would certainly make people think.
WHAT it would make them think is not entirely predictable.

The change would be so extreme that I'd expect to see all kinds of extreme responses.
To expect that some will be upset would be putting it mildly. I'd expect wild price changes for everything related to transportation and automobiles. I think brick is exactly right in expecting conventional vehicles to become unsellable, and the most fuel efficient cars would zoom up in price until demand was met.

Personally, I'd have a tough go of it. 25-30 or even 35 mpg in a hypermiled trusty Volvo would not be a cost effective commute, 59 mi. each way.

[xcel]

Hi All:

___Like anything else in short supply, the nation would adapt however painfully. Those going to work and back would begin sleeping in their cars during the week, the work shift would move from an 8 hour day to a 12 - 16 hour day so as to accommodate less days traveled and you would see the highways and byways slow down tremendously. Our consumption would immediately come in line with production but the “Shock” would cause a recession at a minimum. It would hurt everybody including the individual that is close enough to bike to work because our consumption of not just gasoline would diminish and there would be a lot of jobs that disappeared overnight.

___There was a great MP3 story posted last year about this imaginary nightmare scenario. I will try and find it …

___Good Luck

___Wayne

[Dan]

Well I see $10 gas happening piecemeal. First you have $200 bbl oil. Then there is an immediate spike in gas prices to $10 / gal. No one buys gas that day. Within about 12 hours of $200 bbl I see an executive order to open all national strategic oil reserves. With this price begin to flutter back down to $6/gal. Everyone buys gas that day, and the stations run out (happened in Houston during hurricane season).

Within 12 hours after that, I see congress countering with national price capping a rationing.

I see capped prices and rations or options as being the end state. I think the price would probably be capped at $6 /gal and rations issued at 5gal/wk/adult and 2.5gal/wk/dependent_child. So a couple with two children would get a ration or an option to buy 15gal/wk at 6$ gallon. If they really wanted to be all free market about it, they could allow gas to be bought without the option price. I think that gas would go for $20 /gal. So the UberRich would still be ok.

Most families could survive under this situation since it would simply mean that instead of taking two cars to work, they only take one. Allowing the sale of un-capped gas to subsidize the capped gas prices would also allow the Fed to finance the price capping. I think that there are still lots of people with tons of money that wouldn't think twice to filling there full sized HumVee at a whopping $1000. If your dumb enough to pay $70k for a land yacht, your dumb enough to pay 1k to fill it.

Real problem would be US troop movements. At $200bbl Powering a naval fleet and it's air force becomes anything but trivial.

Ohh yea, the selling of options is illegal. Get caught doing it, the state revokes your registration and title for your vehicle and bars you from getting a new title, registration or license till rationing is over. The Fed pushes this down on the states by revoking all federal highway funding and denying access to national reserves until a state complies.

Disclaimer: non Texans, feel free to skip the next three paragraphs of Texas rambling

In retaliation to the federalists behavior of the national government, states begin flexing state rights by refusing to enforce rationing. The first to do this is Texas (sorry Chuck & Marc, I just had to do it). Texas exercises its right under the 1845 US Texas treaty to subdivide it's land from 1 US state to 4 US states. The area of Central Texas and South Texas remain as the state of Texas, with 3 new states, North Texas, West Texas, East Texas. Capitols of Dallas, El Paso, and Houston. The members of Congress are divided according to district, and elections for 6 new US senators are held. All senators campaign on unifying Gulf state representation in Washington.

The new state of East Texas petitions the state of Texas for national guard troops to station around it's gulf cost refineries. Louisiana, seeing the positioning of Texas troops deploy their national guard as well. The federal government fearing an embargo of gulf coast refineries deploys US war ships to the Gulf of Mexico. Interstate frictions drive un-rationed gas prices to over $25/gal. The states formerly know as Texas who have refused rations are under cutting and selling at just under $8/gal.

East Texas and Louisiana, without a standing Navy Concede to the federal demands, but relations between the Texas States (and Louisiana) and Washington remain raw. Legislation aimed at penalizing the gulf states is never drafted, due in part to the unbalance in the senate, fresh with 6 new Texas senators, coupled with the abundance of Texans in the Executive branch and cabinet.

Eventually, the rationing takes hold and the population accept the inevitability of it. The US auto industry is crushed by need to switch to FE lines, but eventually switch most production to efficient lines. The transition takes enormous tolls on the Big 3, and the emerge from it a fraction of their former strength, but formidable none the less.

The hardest hit among all industries is housing. Across the country suburban ghettos are abound, as many people simply abandon their houses due to sharply falling real estate trends.

Heavy hits on the the Stock markets trigger a sharp recession which the federal reserve combats with raised interest rates. The escalating urban housing market drive many tenants out of their homes, most of which are forced to relocate in under valued suburban areas. Property ownership becomes harder to obtain due in part to the scarcity of viable urban real estate coupled with the ballooning interest rates.

After a sever US recession, the economy adjusts. Most of the permanent damage is in home ownership. Fewer US families can afford the luxury of owning homes. The US auto industry is heavily marred and dependent on deep US subsidies to remain afloat. They emerge significantly smaller than they were before.

The rationing is never really lifted, but simply transformed to a government price capping of "Strategic Energy Resources". Most opponents to energy exploration in wildlife reserves are over run. US restrictions of refinery construction are lifted and both the East and West coast become major hubs of US refinery work.

To stimulate the economy and curtail a national Depression, Next New Deal legislation is drafted for government programs focusing on Energy Independence and Sustainability. Huge education campaigns are started to stimulate national pride in conservation.

10 years after the fact the US is just like every other country, and is much more in line with global norms of energy consumption. Oil peaking is accepted and studied widely.

[Chuck]

Dan,

That's quite a write up!

I'm hoping money is heavily invested in alternative energy in this scenerio to slowly get out of this pickle.

[Bruce]

Originally Posted by Delta Flyer

imagine tommorrow gas at the pump is $10 a gallon for personal use. Truckers and commercial drivers are exempted.

Nearly everybody would become a trucker or commercial driver.