smart spending

Can $20-per-gallon gas save the world?

Jay MacDonald Christopher Steiner is definitely a cup-half-full kind of guy.

Given lemons, he'd become the lemonade king.

Rain on his parade and it's squirt guns for everyone!

It's the only possible way he could have written an optimistic book with the non sequitur title, "$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better."

“The rising price of gas will unlock countless doors to innovation, opportunity and change.”

Steiner, a staff writer for Forbes, has read the same doom-and-gloom predictions as the rest of us -- how we will soon be living in caves and teaching our kids to read by yak-oil light, yadda, yadda, yadda.

But Steiner sees our dribble-cup of gasoline as more than half-full because, once it runs dry, it will bring a halt to the oil rush -- and by extension, the waste and materialism that currently plagues Western civilization.

"There is little to be afraid of," Steiner assures us. "The rising price of gas will unlock countless doors to innovation, opportunity and change. Does Walmart going out of business scare you? It doesn't scare me."

Benefits by the numbers

You remember the sting of $4 a gallon gas? Here's Steiner's analysis of what's ahead as growing demand and diminishing reserves send gas prices soaring:
  • At $6 per gallon, traffic thins dramatically. As a result, traffic fatalities decline by 10,000 lives per year. As more people walk or ride bikes, we save $11 billion annually in health care costs.
  • At $8, the skies become blissfully quiet as short-haul air travel ceases. Say goodbye to Mickey; tourist-driven destinations like Disney World and Las Vegas will wither.
  • At $10, electric vehicles replace gas guzzlers. Noisy snowmobiles and Jet Skis disappear.
  • At $12, outer suburbs become ghost towns, resulting in a revitalization of urban centers such as Cleveland, Detroit and St. Louis. Mass transit expands rapidly.
  • At $14, bid adieu to Walmart as globalization reverses itself. American manufacturing returns to America, reviving domestic rail and river supply routes.
  • At $16, say sayonara to sushi, caviar and kiwi fruit. Local farms flourish as the cost to transport food becomes prohibitive.
  • At $18, high-speed trains connect the nation. Service between Los Angeles and San Francisco, or New York to Cleveland, takes less than three hours. No wonder Warren Buffett acquired all that rail stock a couple years ago.
  • At $20, the rewired national electric grid runs on hydro, wind and nuclear power, as well as recycled industrial waste heat and clean methane gas from bacterial digestion of human waste.

Slaying a sacred cow

To make this ride a little easier on the bearings, Steiner says Congress needs to tinker with one of its last sacred cows: the gas tax.

"Right now, the federal gas tax is 18 cents (per gallon), it was put in almost 20 years ago when gas was 90 cents a gallon" he says. "What if gas were $4 and for every gallon of that, the government was getting $1.25? The government would raise $500 million per day! That's $150 billion a year. That's real money. That's fix-health-care money. That's crazy money."

Steiner says a stepped-up tax would not only wean us from gas gradually, but would provide the money to rebuild our energy infrastructure and give innovators the price support they need to develop alternative fuels.

"We saw some projects get off the ground in the summer of 2008 and now they've been shelved because they can't count on the price of oil being that high," Steiner says. "Ford and GM are pressing forward with hybrid cars, but now with gas at $2.50, they're probably not going to sell as many."

The pony in this there-has-to-be-a-pony thought experiment? A trickle rather than a stampede back into the cities, a gradual slope rather than a cliff dive to a new transportation paradigm -- and just maybe a healthier quality of life.

"Preparing for the future isn't about buying the latest gadgets or the car with the best mileage," says Steiner. "Instead, move to a walkable neighborhood where groceries, your kids' schools, your office and a train are all within several blocks. That's a change you'll profit from and a place where the future will be kinder. Where you live largely determines how you live."

Just fuel for thought.

If you have a comment or suggestion about this column, write to Bank Shots.

News alert Create a news alert for "smart spending"

advertisement

Show Bankrate's community sharing policy
          Connect with us
REFINANCE HOME EQUITY AUTO CDs CREDIT CARDS
Product Rate Change Last week
30 year fixed refi 4.01%  0.19 4.20%
15 year fixed refi 3.09%  0.08 3.17%
10 year fixed refi 3.16%  0.02 3.14%
 
View Rates in your area Next
Product Rate Change Last week
30K FICO-based HELOC 4.32%  0.02 4.30%
50K FICO-based HELOC 4.06% --0.00 4.06%
100K FICO-based HELOC 3.92%  0.01 3.91%
 
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.81% --0.00 2.81%
48 month used car loan 3.04% --0.00 3.04%
60 month new car loan 3.24% --0.00 3.24%
 
View Rates in your area Next
Product Rate Change Last week
1 Year CD 1.00%  0.02 0.98%
2 Year CD 1.19%  0.02 1.17%
5 Year CD 1.85% --0.01 1.86%
 
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.73%  0.02 15.75%
Cash Back Cards 16.43%  0.02 16.45%
Low Interest Cards 10.98%  0.02 10.96%
 
Next
advertisement
FRUGAL NEWSLETTER

Discover new ways to cut costs and save more every day. Reduce your spending, not life’s pleasures. Delivered weekly.

advertisement
Partner Center
advertisement

Connect with us