Large areas of the upper Great Plains, the South, and Southwest are being hit hard, due to a heavy dependence on generally low-gas-mileage pickup trucks, low incomes, and those aforementioned high fuel prices, The New York Times reported Monday.
The Times reported that several social phenomena present during the U.S.'s last oil shock are on the rise: gasoline thefts, people running out of gas, and substantial reductions in consumer retail shopping to allocate more money needed to meet higher fuel costs, among other consequences.
Gas prices: to change communities
Economist Glen Langan told BloggingStocks Monday that while it's too soon in the U.S.'s latest high-gas-price-era to forward any predictions regarding economic/social trends 5-10 years out, the early signs are not good.
"It's going to be a matrix, a patchwork, because some rural communities, those that are self reliant or have some hub, like a cluster of information technology companies or another magnet, will be o.k. But those that are dependent on a larger town or city 40 or 50 miles away are in trouble," Langan said. "There will be exceptions, but this business of commuting 40 miles, each way, alone, in an SUV or pickup, is done, basically."
Further, Langan said had the United States created a more fuel-efficient vehicle fleet it could have lessened, if not averted, today's oil shock consequences. "Think about what economic conditions would be like if each car got 30 miles per gallon, or 35 miles per gallon? Different economy," Langan said. "But the fleet is a generation behind, so the nation will spend the next five years or so playing catch-up as the auto sector designs cars for today's needs."
But in the meantime, disposable income will take a large hit, Langan said, lowering U.S. economic growth, at least through 2009. Langan said sustained fuel prices above $4 per gallon could reduce U.S. GDP by as much 0.6-0.8 percentage points.
A dollar-for-dollar U.S. income tax credit up to $300 for annual gasoline expenses could lessen that drag effect, Langan said, but historically, there's been little political support in the United States for such measures.
What's more likely? Tax credits for accelerated capital investments for the auto makers as they re-tool to build more-efficient vehicles, he said.
Comfort Zone Investing: The unmighty dollar
Five winners of a weak dollar
For a quick-read on the U.S. economy, check the price of gasoline
Reader Comments (Page 1 of 1)
6-09-2008 @ 6:30PM
Ronald Chambers said...
The really sad part about this fuel situation is we are not over the top yet. At the first of the year I prodicted four dollar a gallon by end of June and was laugthed out of the office. NOW they come to me and ask -- what do I think will happen by the end of the year??? We could very well be looking at five dollar a gallon by that time.
MERRY CHRISTMAS EVERYONE
6-09-2008 @ 7:06PM
william lindblad said...
Fuel costs impact will extend far beyond "rural" communities. The retail structure of the U.S. varies widely. By this I mean how far one must drive to do even basic shopping, groceries, clothing,etc. Taking the kids to ball practice or anything alike, even a day at the lake may become impossible. Anyone with a half a brain is not doing a 40 mile commute with an SUV or big V8 pick up. It's the affluent that have been putting on this show, not the guy driving the 12 year old s-10 with a four banger and a multi color paint job. I have lived in numerous states and I can say that "rural" can mean 6 miles outside a small town or 6 miles out of a city. It still is a 12 mile round trip, but the small town may only have a hardware store and a gas station at which you can buy a quart of milk or some candy. The city may have near everything. It's like they say in real estate - location, location.
That's for now.
Wait until late Sept when most have to resort to heating - location will not mean a thing.
6-09-2008 @ 7:29PM
Dan Barnett said...
Mr. Lindblad,
What now happens to property values in the ex-burbs? They drop, right? So now you got more people looking to dump (formerly) expensive houses in semi-rural areas with no interest from a buyer who isn't looking forward to a 30+ mile commute each day.
What happens to our county budgets when they have to gas the school busses? & do they keep an extra bus in operation for after-school activities? & if not, to what extent do the parents pick up the slack? & how much does this then cost? Are the days of the "Soccer Mom" over?
Oil Prices are a much bigger problem than most realize. & all I see as solutions are demands to attack some country & sieze its oil.
6-09-2008 @ 8:16PM
Anthony said...
This country is self destructing energy prices are way too expensive, food is expensive, health care is out of control and the worst part of this is all jobs that left this country and the jobs that are here dont pay well and for the most part no more pensions and who can contribute enough to their 401k plan survive retirement without the social security because bush says we shouldn't count on it being their in 30 years. These problems only affect the middle class and poor and who cares about these people.
6-09-2008 @ 11:03PM
Mary said...
American Strikes Oil -- from a Plastic Soda Bottle?by Geoff Williams Jun 9th 2008 @ 3:30PM
Filed under: Technology, Transportation
I just learned about Frank Pringle. Get to know his name. He might be our savior when it comes to oil.
Let's get the elephant out of the room: for all of you wondering, he is not the inventor of Pringles. However, he can probably take a Pringles can and extract oil from it.
Pringle, 64, is the CEO of Global Resource Corp. (GRBC), in West Berlin, New Jersey, and he has developed a patent-pending emissions-free environmentally-friendly technology that uses microwaves to pull out fuel from shale rock, tires, plastic bottles, toxic sludge from river bottoms and other pieces of junk. Actually, I'm not sure if he can get oil from a Pringles can, but he has microwaved lawn cuttings into a substance that could be refined into alcohol fuel. It sounds like he can make oil out of about anything.
A public relations colleague of mine represents him. Late last year, he was covered in Time Magazine (which named his invention as one of the best of the year) and Popular Science, which also said he had one of the best inventions of the year. Why his technology hasn't caught on yet, assuming it works as well as it's been reported, is beyond me. But maybe our $4 per gallon of gas will make Pringle more in demand.
I can't explain it better than Popular Science, so I'll just borrow their words: "The machine is a microwave emitter that extracts the petroleum and gas hidden inside everyday objects -- or at least anything made with hydrocarbons, which, it turns out, is most of what's around you."
Pringle's machine can turn 10 tons of auto waste--tires, plastic, vinyl--into enough natural gas to product 17 million BTUs of energy. BTUs are British Thermal Units. Beyond that, I know next to nothing about BTUs, but 17 million sounds like a lot of them.
Maybe that's why Pringle told Popular Science: "I've been told the oil companies might try to assassinate me."
Here's hoping that Pringle's technology takes off, and that regardless, he remains alive and well for years to come.
6-10-2008 @ 4:14AM
sgentilejr said...
Stop crying. Bbush told you in 2002 that we had to invade Iraq because Saddam was selling MORE OIL than he was allowed to sell and YOU supported the invasion. Mission Accomplished...Saddam is no longer selling too much oil.
6-10-2008 @ 4:17AM
sgentilejr said...
What the hell did you expect when you elected a bunch of Texas Oilmen to run the White House?
Bush met with OPEC secretly at his Crawford Ranch. Cheney met with BIG OIL secretly at the White House...and now YOU are paying through the nose.
6-10-2008 @ 7:13AM
Mary said...
The truth go to link and listen to the REAL reasons our Country is in the shape it is in.
Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, he knows the rest of the story! Educate yourself and others....
http://video.google.com/videoplay?docid=3340274697167011147
....very interesting video from John Perkins, the man who wrote "The Confessions of an Economic Hit Man" ....google John Perkins.