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Back on the Coast

Back on the Coast

Sunday, April 27, 2008

Will the Rising Price of Gas be the End for Vandwelling?

For now, no, not yet. In the future, quite possibly. As of today, the US national average price of gas is $3.59 US per US gallon. In Canada, the national average price of gas is $5.74 CAN per CAN gallon. Now, our gallon is 20% larger than the American gallon, and our money is approx. worth 2% less. So, taking into account the variances, that would make our equivalent gallon around $4.75, due mostly to increased Canadian taxes over the States. Regardless, everyone is concerned with the price of gas, how it affects their livelihoods and with good reason.

In North America, our lifestyle is based on the availability of plentiful, affordable petroleum products. Plastic is everywhere. Rural homes, farming, suburbia, industry, trucking, etc. - require great amount of gas to move people, products and produce all consumables. Everything man made is effected by the price of gas, either by transportation, production or labour. Even if you don't drive at all, the price of gas will affect you.

So, what are we supposed to do? As a consumer, apparently the media says we have elasticity to be able to absorb the rising price of gas. Oh, really. I look around at a lot of people who's budget is strained already to the max. But, that is because they think or live in the North American culture mindset. Spend, credit, debt, no leverage left, maxed out.

In Europe, the price of gas is approx. $8 - $9 per gallon. They've paid twice the price or more for decades, compared to North America. And they make it work. How? Conservation. More fuel efficient vehicles, efficient driving, extensive public transit, doing with less. Less food, clothing, electronics - everything - as they allocate more funds to gasoline instead. The question is - can we do this in North America? It's not a matter of can we - we're gonna have to.

The predictions in Canada are that gas will hit approx. $1.50 per litre here in summer, and around $2.25 per litre by 2012. That translates to $6.81 per CAN gallon this summer, and $10 per CAN gallon by 2012. I figure this summer in the States, that gas prices will jump to around $4.25 per gallon, and around $8 per gallon by 2012.

For myself, I can deal with these prices. At the moment, gas and food are the two largest cost centres of my budget. I allocate $300 monthly for both of them. On an average month, I drive around 200 miles weekly combined driving, so my gas usage costs $240 per month (today's price, leaving me with a $60 budget surplus) . By the summer though, the same gas usage will be $281 per month, still doable with my budget. But by 2012, this rate of gas usage will cost $420 per month. But, keep in mind that this is a bare minimum of driving, just the essential. When I go away for any trip, weekend or longer, I will have to budget extra funds because my regular weekend allotment of driving miles is only 100.

The problems facing North American culture, when compared to Europe, isn't easy. The crux of the matter is the distances involved. If you drive 200 miles in Europe, you are probably in another country. The distances involved are much less than those in North America. Here, we think nothing of living 20 or 30 or more miles from work - produce and products are produced on the other side of the country, if not the world. So, there are going to be many changes, as what worked before barely works now and will not in the foreseeable future.

Because we have eliminated the huge expense of shelter, we as Vandwellers, have a much greater elasticity to deal with the rising price of gas. However, even we have a breaking point. But, our breaking point will be much later than everyone else around. So in 2012, if your vandwelling budget won't handle $8 per gallon in the States, or $10 per gallon in Canada, you will to make drastic choices. Plan accordingly.

One of the neat things about capitalism and macro-economics is the effect of supply and demand on the price of goods. When the price of gas climbs to $10 per gallon, North Americans will have to evolve into more conservational consumers. If the overall gas consumption drops considerably, due to nationwide conservation, so will the price. I realize that China and India are creating a large demand, but sooner or later, their economies will max out too. Why? When the Western world greatly reduces their demand for products from these countries, China's and India's economies will stall or stop growing and as well, their demand for gas.

Another factor in the price of gas is the effect of investment dollars. Gas futures, options, speculation - control of supplies and so on - are increasing the price of a barrel of oil by around 30%. A lot of these factors are completely artificially made by capitalism. So, if the world's nations started looking at oil and gasoline not at a commodity, but as a necessity, it's time for our governments to impose regulations which would control price environmental factors. If not, gas prices will continue to soar, which in turn will ruin economies around the world. Choices, choices.

Because Europeans make high gas prices work there, I say we can do it here too. But, it's not going to easy. We will have to work hard to implement changes, both systemic and technological, but being an optimist, I know we can do it. Humans have the ability to adapt and change, and here in North America, we have as much ability to do so, as anywhere on the planet. So for the moment, forget about crying about gas hitting $4 per gallon in the States, or $6.5 in Canada. Evolve. Deal with it. One day, you will reminisce when the price was that low.


admin said...

you mention the year 2012 in your post. I have seen several times a documentary on the Mayan Calendar and how it ends as of 2012. The Mayan were a most interesting people and were advanced in their study of the stars. This is a bit of prophecy in that I have read and done some study on Revelations. I recently saw on the net where Rice stated there is the possibility of peace being declared this year in the middle east. If so that according to Revelation would be 3 and 1/2 years long, before all hell would break lose, literally. The peace agreement would be for 7 years, but be broken in 3 1/2. Hence bring us to 2012. Uuummm

Jacqueline said...

where's the urban van dweller? i hope you're OK.

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