Oil has been on people's minds lately. The runup in oil prices has not been that big a surprise, or at least should not have been to sentient beings. With gas prices in the $3.40 a gallon range, there are now calls to drop the federal gasoline tax for the summer to help the American consumer. Senator Obama is against it, Senators Clinton and McCain are for it. I think it's a stupid idea. Gasoline has become more expensive, but it's going to stay that way and you might as well get used to it. In the meantime, the Federal budget deficit continues to increase (and will take a nice jump next week when the government sends us all money borrowed from the Chinese so that we can go out and blow it. I may take my children to dinner since they're the poor sods who'll be paying it back, with interest) which helps weaken the dollar which helps push up oil prices.
Although not normally someone I cite when I make a point, how about this quote:
"Let us rid ourselves of the fiction that low oil prices are somehow good for the United States"That's Dick Cheney in October 1986 shortly after introducing legislation to increase the gas tax. He supported it in part because it would help reduce the federal deficit, something that seems to have become less of a priority for him in recent years.
It has been interesting to watch the airlines' reactions to the oil price increase. Prices are going up and some airlines have simply shut down operations. I think airlines are in a bad position and combining Northwest and Delta, as has been proposed, does not answer the question of how to get by on $120 a barrel oil. With the economic headwinds from contracting credit, reduced consumer confidence and increased commodity prices showing up in oil and food, there is going to be reduced demand for air travel, a situation exacerbated by the higher ticket prices airlines will have to charge. Almost the whole industry has gone through bankruptcy and they don't have the equity cushion to absorb a lot of losses from fuel prices.
I think airlines are going to have to find some new equilibrium, with much higher ticket prices and a much reduced flight schedule. I looked to see how many flights there are from here to Chicago O'Hare each day. Care to guess? My boss guessed 12. Wrongo. If you choose to fly on May 5th (I just picked a date), you can select from 32 flights to O'Hare on United, American or Northwest (you can find USAir or Continental flights, too, but they're just code-shares with these guys). There's two off at 6AM, two more at 7AM, and after the fifth flight of the day goes at 8:15 not an hour goes by without a flight until the gap between the American 7:35PM departure and Northwest's 9:15 and 10:16 flights, at which point we're done for the day, only to run it all again tomorrow.
One wonders, is there currently and will there in future be sufficient demand to support 32 flights a day between here and Chicago? (I'm ignoring flights to Midway airport, although when ATA collapsed a few weeks ago a lot of those went away). What if there's only really demand for 24 flights, or 17, or 10? There will be some painful price discovery and service adjustments as the competitors and customers grope through the scheduling and pricing scenarios trying to find this equilibrium.
Less acutely, regular people are going to have the same groping, expensive journey. Transit ridership in the Twin Cities is already way up this year; bicycle commuting will probably increase as well, helped along by the promise of finally getting some temperate weather. Does anyone doubt that carpooling will become more popular? My father used to carpool in the 1960s and 1970s, partly because we didn't have a second car until I was 16. If you live a long way from work, or work and home are areas not well-covered by transit, these adjustments are going to be hard.
I have to say I have enjoyed the cheap energy era. As much as I like bicycles, I also love airplanes, and first flew when it was so unusual that everyone dressed up and they published a passenger list, just like on a ship (OK, 1960, for the curious, by British Overseas Airways Corporation Douglas DC-6, Buffalo-Gander-Shannon-London service)(and no, I don't remember a thing, but I do still have the passenger list and I am exceptionally cute in the photos wearing my camel hair overcoat). I've enjoyed many a car trip just aimlessly sightseeing, and many of the advantages of cheap energy, from year-round fresh foods to cheap airline tickets, have enlivened my life. I think this era is drawing to a close, that we are getting higher energy prices from structural economic reasons rather than transient supply disruptions, and that adjustments are going to have to be made.
Bicycles are part of the answer. They can't do everything, of course, and they're pretty useless for nipping down to Chicago for the day, like I did last year on planes with a cheap advance-purchase ticket, but for many trips most of us take much of the time, they'll do fine. I guess it's our job to welcome new cyclists into the fold, show them the ropes, restore to them some sense of the joy and discovery that riding still holds. No matter how much you like bicycles, though, I'd probably hesitate to introduce yourself as a pedalphile!