What Will Change When (Not “If”) Fuel Costs Continue to Rise?


How will things change when gas is far past $10 per gallon?  I have been thinking what I would say when I talk to my college-age kids to try to motivate them to plan farther ahead into the future.  Certainly, rising energy costs will make significant changes in how we live.  In my case it probably won’t be justifiable to work 38 miles from home, as I do now.  The cost of fuel alone, currently (this week) passing $2500 per year (with a 30+ mpg vehicle), will before long make it worth it to take a job that pays $10-15,000 less per year in my own small city.  When it costs 30 cents per mile to drive, and especially if average incomes continue to sag, people will start really cutting back on their driving, but that only goes so far.  I think bigger changes in behavior will emerge.

Fuel costs may force people to move closer to their work.  My stepson, a college junior on a 6 year track (involving several major and school changes) has said he wants to teach.  It occurred to me that, when gas is past $10 per gallon he may move to be close to his work, preferably within walking distance (especially given the poor quality of most public transportation in the U.S.).  School teachers might well live, if not in the school itself, at least within a block or two of where they work. 

Businesses may relocate closer to population centers.  Businesses located in the countryside may find it necessary to move into more populated areas, possibly closer to where the majority of their employees live.  Of course, some businesses may not be able to move, due to being tied to a natural resource, for example.  They will have to deal with this problem differently.

Businesses may build company housing to secure their workforce.  When travel costs become really huge, and good workers can’t afford to make long drives from where the good schools are (for example) to where the business needs to be, companies will need to find creative solutions to keep their workforces.  Building company towns, perhaps shared by several businesses, and perhaps involving major renovations and cleanup in heavily industrialized areas, may be necessary.  This was done in the past to enable mining and major construction projects such as hydropower dams, but might be the next wave on the industrial waterfronts of the big cities.

Businesses may invest in mass transit.  Companies may set up their own small bus lines, or provide shuttle services from the nearest rail stations, to make it cost effective for their employees to come to where they do business.  The company where I work currently subsidizes commuter vans driven by paying participants.  Perhaps companies will do more of this and possibly collude on such efforts if public transit can’t handle the growing demand.  I could take a train the 35 miles from my home city to where I work, as a single rail line that actually has regular passenger service a few times a day already exists.  I would only need a shuttle ride to go that last couple of miles from the station to where I work, and the company already has a shuttle service to move people between buildings (it’s a huge company).  I could almost walk the mile to the station in my town – it would be good for me, too – or in bad weather I could take the local bus.  Alternatively, will trains need to provide convenient storage for bicycles?

Personal habits will change significantly.  I already am planning my driving to minimize miles and consolidate all my errands into a single trip, but I might start taking the city bus much more often.  Fortunately my city has a top notch bus system with hybrid, biofuel-powered buses that run every half hour from 7A to 10:30P or so.  I expect that they will go to a 15 minute system when ridership supports it, which would be much more convenient.  Right now I watch the clock and figure out when to go to the bus stop at the end of the block to minimize the wait, but then I will just walk down there, and a bus will probably be there within a few minutes.  Many other cities will learn from the more progressive cities like mine.

Home delivery may have a resurgence.  Some businesses may find it a marketing advantage to take their products to the customer, instead of requiring the customer to come to them.  The total cost could be significantly less to have a delivery of dairy products, bread, and similar staples in a fuel-efficient optimized route as opposed to having me and all my neighbors driving all over town to fill such needs.

Country subdivisions may set up their own shuttle services to take residents to shopping and work zones, and train and bus stations in town.  The value of the more remote housing in the North American urban sprawl zones will decline significantly as transportation costs skyrocket, and developers and homeowner associations may need to take action to preserve housing values and promote sales and residency.  Investing in localized power generation is a strong possibility, but setting up or (more likely) contracting in transportation services for residents may be even more cost effective.  That suggests that there will be room for more small transportation service companies.

Neighborhood stores could reappear.  When I was a child all of the older neighborhoods (pre-WWII homes) had a small store that carried a minimal selection of necessities, and could be reached by walking just a few blocks.  The supermarkets and car culture killed almost all of them off except in special areas like college town “student ghettos” were many students don’t have cars, or out in the country where the nearest big box store or supermarket is many miles away.  When it costs enough (too much) to drive to the nearest big store or mall the total cost may make neighborhood stores profitable again.

Bicycle manufacturers and shops may change their offerings.  These days, when I go to a bicycle shop, mostly they carry sophisticated and expensive high-technology mountain bikes, with lesser quantities of equally-high tech road bicycles.  Finding a nice, utilitarian tricycle with a big basket (or several) for going to the store is nearly impossible unless you order it from somewhere.  The current market is all about sports and recreation, but higher gas costs could bring in a lot more human-powered transportation with a decidedly practical bent, as the customer base moves from fitness and recreation enthusiasts to middle-aged and elderly folks who mostly just want to get to the store or the train station and back.  This also means an uptick in business for bicycle rack and locker manufacturers, and even a market for services to maintain the lockers (Bike lockers have already appeared in my city).  My city’s bus system already has bike carriers on the front of the buses, but will they need to be made a little (or a lot) bigger?

Vehicle rental agencies may be more dispersed and provide more utilitarian vehicles.  In Europe I learned that many people in cities own either no vehicle at all, or perhaps a scooter, and rent a truck, van, or car when they need to go out of town or move a group of people or something large. 

The use of scooters may become more prevalent in North America.  A shopkeeper in Florence, Italy, with his production facility outside the city, rides his scooter to work every day and parks it in the back of the shop.  He has a car he only uses once a week to replenish stock at his store in the early morning hours, after which he takes the car home and comes back on his scooter to open the shop for the day.  Other people I met there use their scooters on nice days and take public transportation when the weather is bad.

Those are a few ideas on how higher fuel prices could change the way we live.  I will add more as they come to me, but I welcome your ideas, as always.

Thanks for reading, and best of luck in the new economy.

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One response to “What Will Change When (Not “If”) Fuel Costs Continue to Rise?

  1. I really enjoyed reading your blog. It was very informative and I was impressed by the breadth and detailed wealth of your knowledge. I really liked that you took your theoretical stance and applied it to specific details of your local city. It was very interesting to read. Actually I enjoy reading all of your blogs. They are quite varied in their speculations on many topics and I enjoy following your thinking on such a multitude of topics.

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