By ED VASICEK
Tribune columnist
March 15, 2008 11:27 pm
—
Everyone is talking about gas. No, not the kind that can be treated by Beano, but the kind that runs your car.
Although many of us predicted that gas prices would top $4 per gallon a couple of years ago, we saw the price drop to about $3 per gallon and, although painful, the price was somewhat steady. But the talk of the town and the nation is that the price is going to rise and rise again.
Economics can be a mysterious and unpredictable phenomenon, but a few principles seem clear-cut and consistent. One such principle is the law of supply and demand. When we have more demand than available supply, prices skyrocket. When we have a glut, prices drop.
In the case of petroleum products, it is not merely a matter of how much oil is in the ground: the issue is how much is on hand? Because oil-producing countries want to guard their limited supplies for long-term profits, they are not maxing out their oil wells. Like money in the bank, oil reservoirs sit in the ground gathering interest. If oil-exporting countries produced as much oil as humanly possible, the price of gasoline would be low.
Since the primary concern of oil exporters is making a profit over the long haul, we cannot expect them to take losses to make us happy. For years (in my opinion), they tried to keep prices low enough so that we would not be too aggressive about developing alternate energy plans, but that strategy has fallen out of grace.
Our nation is finally beginning to take alternate energy sources seriously. As we slowly build wind farms and gradually develop electric-hybrid automobiles, we are creeping in a positive direction – yet, like the old song, “We’ve only just begun.” The challenge is to minimize energy misery during the interim.
Like trying to stop a flooding river with a bucket, we are helpless to hold gas prices down. The most economical approach is to cut down consumption of gasoline. Many Americans are already doing so. Some have moved closer to work, others have learned to shop locally (developing a “shopping route” as opposed to making short repeated trips). More folks are walking while others carpool.
A recent Reuters article highlighted one cost saving strategy: “The number of Americans hopping buses and grabbing subway straps has climbed to the highest level in half a century as soaring gasoline costs push more commuters to take mass transit.”
Public transportation can be an expensive proposition in a city our size. Yet the more citizens use public transportation, the more cost-effective it becomes. With the price of gasoline skyrocketing (and who knows where it will end), we need to begin considering a return to buses (or even street cars) along some of our main thoroughfares.
I will grant that implementing such a plan right now seems ludicrous. But we need to ask ourselves, what is the threshold we must cross for this idea to be viable? If gasoline rose to $7 a gallon, for example, would people patronize buses down Ind. 22, U.S. 31, Washington, Boulevard, Morgan, and Dixon streets, for example? Would offering such a service be an important draw to businesses and potential residents?
We might also need to bring back neighborhood schools in which children actually walk to school. High school students might be responsible to get to school on their own, thus offsetting taxpayers expense for subsidizing public transportation (as larger cities do).
Absurd ideas can become reasonable ones given the right circumstances. Desperate times call for desperate measures. These are not yet desperate times, and we might somehow evade those times. But just in case those gloomy predictions become reality, we need to begin formulating tentative plans – now!
Ed Vasicek is pastor of Highland Park Church and a weekly contributor to the Kokomo Tribune.
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ED VASICEK Tribune columnist