Technology

Published on November 25th, 2008 | by Justin Van Kleeck

7

Are Lower Gas Prices a Good Thing?


a gas pump in indianaAfter what seems like an endless period of record-high gasoline prices, gas station signs are changing almost constantly as the cost for a gallon of gas tumbles. Although the numbers vary depending on where you are, the trend is the same: prices have hit the bottom of the (oil) barrel.

As I write, the lowest average price in America for a gallon of regular unleaded is $1.683 in Oklahoma, while the highest is $2.866 in Alaska.1 Whatever the exact figures, they are far more than half of what they were when prices were at their highest.

As I have watched prices plummet, I have felt my joy and relief rising in an inversely proportional ratio. I also know how many others feel the same, given the fact that commuting is a necessity for many folks…and that many folks drive a lot farther than I do and do not have a hybrid to help reduce consumption.

High gas prices have had serious effects on people’s lifestyles across the world, not to mention other things such as cost of food and other goods. People have been driving less and still paying more for just about everything, causing serious problems for people on fixed incomes or with large families, for instance. We have also witnessed the virtual death of the SUV…though you can still find a Hummer barreling down the highway now and again, gas prices be damned.

Ironically, Americans are lucky when it comes to gas prices. Consumers in many other countries pay a great deal more for their fuel, due to lack of subsidies, higher taxes, or other factors. According to NationMaster.com, the top five for gas prices are Uruguay, United Kingdom, Israel, Argentina, and Japan. America comes in at #102, fairly low on the list of 141 countries; the lucky last is Turkmenistan, of all places!2

Still, gas prices are dropping worldwide, whatever that means country by country and state by state. But with all the joy I am feeling, and just about every other human being is feeling, I also wonder if cheaper gas is not really a good thing.

Think about it. Currently, gas prices are determined by supply and demand, along with factors such as production costs, subsidies (or lack thereof), and taxes (or lack thereof). But the industry and governments do not factor into prices consumers pay many other “costs” that are harder to measure.

Right now, we do not have a “true cost pricing” policy for gasoline (along with so many other things). As Shawn Dell Joyce puts it in a story from the Times Herald-Record,

These hidden costs include military patrols of oil shipping lanes and presence in oil producing countries, air pollution from auto exhaust, carbon dioxide levels in the atmosphere, environmental devastation caused by drilling, pipelines and oil spills, and economic damage caused by importing foreign oil.3

Joyce also relates that the National Defense Council Foundation estimated prices pushing $5 per gallon if these “hidden costs” were actually considered, and then including many other hitherto ignored factors could push the price even higher. If such true-cost pricing were to happen on a global scale, prices would soar for gas and many other goods and services.

This leads me to ask again, is cheap gas really a good thing if it is falsely cheap? Are low prices just more reason for people to live in ways that require lots of fuel and so have far-reaching consequences, from pollution to depletion of the oil supply? Is trusting the market a safe way to “regulate” prices given that it is so often manipulated by high-power industry lobbyists or oil-producing countries, determined by speculators more than true supply and demand, and largely ruled by greed rather than fairness?

As I drive by the many gas stations in my town, these questions make me feel elated and depressed over the prices at the pump. I am glad not to pay so much, but I am sad to pay so little when I think of everything involved.

Should we have a true-cost price for gasoline even if it meant paying more? Should we be thankful for cheap gas?

Notes
Image credit: Derek Jensen at Wikimedia Commons.
1. “Daily Fuel Gauge Report.” Fuelgaugereport.com. AAA-Oil Price Information Service. 25 November 2008. 25 November 2008 <http://www.fuelgaugereport.com/sbsavg.asp>.
2. “Gasoline prices (most recent) by country.” NationMaster.com. Rapid Intelligence. 25 November 2008. 25 November 2008 <http://www.nationmaster.com/graph/ene_gas_pri-energy-gasoline-prices>.
3. Joyce, Shawn Dell. “Sustainable Living: True cost of pumping gas: $10 a gallon.” The Times Herald-Record. 8 June 2008. 25 December 2008 <http://www.recordonline.com/apps/pbcs.dll/article?AID=/20080608/NEWS/806080327>.



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About the Author

I am an ethical vegan (since 1999), a writer, an educator, an activist, an organizer, and a vegan-of-all-trades. I have a PhD in English but then left academia to work on social change. I focus on veganism, animal rights, local foods, farming practices, environmentalism, and sustainability--starting from the position that humans are just one part of the biosphere, not the center of it.



  • http://administrativearts.com Jodith

    The problem with high gas prices is that they disproportionately affect the poor and those who have no public transport alternatives. While there are a few places in US that have really good, convenient public transport, they are far, far in the minority. Even in some big metropolitan areas, getting public transportation across town can require multiple busses and several hours. If you’re a single mom who has to drop her kids off at day care and still get to work on-time, the length of the commute can be such that it’s cheaper for her emotionally to just pay the cost and drive.

    Until we address the public transport issues and the issues of the poor who wouldn’t be able to afford to eat if we had true gas pricing, we can’t afford to implement such things.

  • http://www.sherylbrown.com Sheryl

    With gas prices bouncing all over the place, I found this great calculator that helps figure out the TRUE cost of commuting. It’s pretty cool. Especially is you are thinking about getting a new job or moving. Check it out . . .
    http://costofcommuting.com/referral.php?trx_cd=54b3835eb244864f6e958d60954c0de0

  • http://www.green-cd-dvd-duplication.co.uk sam hdc

    What about the new car that runs on water?

  • http://greenoptions.com/author/jsvk13 Justin Van Kleeck

    It is definitely a hard balance to strike between high prices that do not cripple people struggling to make ends meet and low prices that do not encourage wasteful or excessive consumption. I wish I had some formula for figuring out that balance!

    Perhaps one of the best approaches would be to support the development and availability of alternative forms of energy and transportation–be it better public transportation or cars that run on water! And maybe our new American president will really help to achieve this goal….

  • http://www.PlanetThoughts.org David

    In Europe gasoline is taxed heavily, as scooting all over the place in a car (let alone an SUV) does not suit the public’s good. Denmark raised the price to $10 long ago and used the extra funds to build mass transit and to build up a large wind turbine industry. They now sell their equipment and expertise to the rest of the world. Why can’t the USA do SOMETHING creative like THAT!

  • http://www.PlanetThoughts.org David

    I wanted to let you know I am passing the Lemonade Award on to your site. Please click here for more information. Keep up the good work!

  • Karl

    I’ve gone back and forth on this thinking. My initial reaction was “no” because of the awareness that has spread during this period.

    Lately I’ve seen this as a good thing given the state of our economy. Automakers are getting desperate enough to allow the government to impose serious reform. Our president-elect seems to be thinking like a 21st century entrepreneur. But the lower prices come at a time where your average citizen doesn’t need to suffer any more than they already are. So it’s possible just the right amount of damage has been done to put the right ideas in motion. Those of us who are intelligent know low gas prices are not forever.

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