Posted by: nickgerlich | May 15, 2008

Running On Empty

Everyone loves to hate somebody.

And today the latest victim of our disdain is the oil industry. With quarterly profits in the area of $10 billion for Exxon-Mobil and nearly that for its competitors, Americans are venting loudly, and blaming Big Oil much like rock band Steppenwolf condemned the drug pusher nearly 40 years ago.

You know what? The oil companies are not to blame for their stellar profits. No, we are. Period.

Running on EmptyThe oil companies are merely doing what we pay them to do: keep a steady supply of gas at the ready so we can continue driving…to the store, school, work, church, or just for fun.

Today¬† the average price of unleaded gas in the US is $3.76, a price that Amarillo retailers have amazingly matched penny-for-penny the last month. While I betray my age by saying I actually remember gas prices in the twenties (that’s cents, not the decade), I will add that the current price is not out of line at all when one compares demand to supply.

You see, a lot has changed since the late-1960s when I witnessed an old-fashioned price war at gas stations in southwest Missouri while on vacation. We were a one-car family, we took one modest vacation each year, and we drove sparingly in our suburban Chicago residential area. Driving was a privilege.

Today, though, we have about 240 million vehicles in the US (for about 303 million people), we live ever farther from our place(s) of employment, and we drive everywhere. It is no surprise, then, that waist (or is that waste?) lines have expanded correspondingly.

Cheap gas has become the American entitlement, and politicians are playing this card frequently. Candidates McCain and Clinton promise a three-month gas tax holiday in summer 2009, relieving us of 18.4 cents per gallon. Of course, this is folly, because for the average person driving 1200 miles per month in a vehicle that gets 15 mpg, the savings would be a whopping $44.16.

Woohoo. We could almost bail out the housing industry with that.

We don’t need the federal government to intervene and tell us that our gas consumption is really OK, and that they’re the bad guy for having taxed us in the first place. That price reduction could actually lead to increased consumption, leading to further price increases. Artificial market adjustments are hardly what is needed at this point.

No, what we need is to simply drive less. Walk. Ride your bike. Take the bus. Car pool. But don’t just drive aimlessly.

I have been bike commuting for 15 years, back when gas was a buck and folks thought I was crazy. But with over 20,000 commuting miles alone during that time, I have saved a lot of dough. Add in bike trips to the store, Post Office, etc., and it begins to resemble a lifestyle choice.

And a big boon to my wallet.

The problem is not with the oil companies. Penalizing them would be like charging Google for being too popular, and reaping the benefits of a stock price run-up…like blaming Wal-Mart for our woes because they happen to sell what people want at decent prices…like accusing Apple for dominating the MP3 market because they happen to have the coolest music player.

If we don’t like Google, Wal-Mart, or Apple, then we should be sure to stand in the mirror when we point that finger. And we must be sure to finish that sentence with Exxon-Mobil, Valero, BP, et al, for their success is but a reflection of our willingness to patronize them.

Just my 2 gallons.

Dr “That’s about $7.50” Gerlich


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