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Wednesday, May 7, 2008

Gas Prices

posted by on May 7 at 9:59 AM

With gas near $4 a gallon, people are buying smaller cars, selling—or attempting to sell—their gas guzzlers, moving back into cities, and, in the aftermath of the bursting of the housing bubble, driving up the price of houses along established mass transit lines (rail transit lines).

So… what do you think is going to go down when gas hits $7.50 a gallon?

RSS icon Comments

1

What do I think will happen?

All the yups living in McMansions in Issaquah will be fucked.

Posted by Hernandez | May 7, 2008 10:01 AM
2

I think I'm going to get screwed out of a seat on the bus. Hell, I already have to stand for the 40 minute ride half the time anyway.

Posted by El Seven | May 7, 2008 10:05 AM
3

same thing as is happening now, lower income individuals and families will have to move farther from urban centers and services that support them. hopefully though, more density, high speed mass transit, and mixed income neighborhoods.

Posted by Jiberish | May 7, 2008 10:06 AM
4

I would like to see $9.00 a gallon gas. I mean I am at Westlake Center and the Mayor (who drove in an SUV) is presenting how getting rid of bottled water will help the planet.....

It would help if he could have walked to Westlake or taken the bus. We all know it would help his health.

Posted by Cato the Younger Younger | May 7, 2008 10:12 AM
5

Since I can only think about the world in my immediate proximity, I think extremely expensive gas would be just great!

Posted by Fiend | May 7, 2008 10:16 AM
6

The problem is, the yups in Issaquah don't care; they can afford it. The lower-income people who live in the sticks are the ones who are going to be screwed; they can't be served by transit, and they can't afford to move closer. It's a problem. It's not the end of the world. We will slowly shift to accomodate it, in ways many of which no one is foreseeing.

Posted by Fnarf | May 7, 2008 10:23 AM
7

Why does everyone on Slog always seem to assume that higher gas prices are finally going to stick it to the yuppies in the suburbs?

It seems to me yuppies in the suburbs are probably going to be able to absorb the higher gas prices better than lower income folks. If the theory holds that housing prices along transit lines will go up, lower income people will also be squeezed out of in-city living.

The article Dan linked to at Money Central makes it very clear that the higher the prices the more jobs eliminated. And while some of those jobs are yuppie jobs a lot aren't, like airline employees, employees at hotels and resorts, etc. Not to mention the small businesses that will collapse because they are unable to afford the fuel (repair people etc.)

What do I think is going to happen? I've said it several times in jest, but I do think it is possible that we will see an Urban War.

Posted by PopTart | May 7, 2008 10:23 AM
8

When I bang it really hard and do a lot of 3.5 second 0-60 runs, my bike gets down almost as low as 30 mpg. So if gas gets near $10 a gallon I'll probably have to cool it a little.

Posted by elenchos | May 7, 2008 10:23 AM
9

I think the city should have an incentive plan for people with SUV's to donate their cars to the city with the understanding that the scrap metal will go to making alternative energy buses or light rail, in return to a tax deduction or something. I mean, hell, maybe the whole state could work on it and then people wouldn't keep crashing their cars between Seattle and Spokanne.

Posted by Kat | May 7, 2008 10:26 AM
10

We will build the monorail.

Posted by crazycatguy | May 7, 2008 10:32 AM
11

I think we need to pray.

Posted by Mr. Poe | May 7, 2008 10:33 AM
12

This does, as many note, disproportionally affect rural poor and low-median-income. None can afford a place near large employment centers, and those that don't work in large employment centers usually require mobility as part of the job (construction, contractors, plumbers, home repair, etc). Of those that don't have access to an employer-subsidized vehicle, most probably have trucks to carry equipment (or because trucks are simply very compatible with a rural lifestyle -- hauling firewood, sand/supplies for pouring concrete for your workshop slab, bails of barbed wire, towing your trailer of stuff to go to the dump, etc). They don't have the capital to purchase an expensive electric/alternative vehicle where the purchase price is high and justified by a later payoff by paying less on fuel. The yuppies *do* have the capital to purchase a new electric vehicle, or to have a commuting vehicle and a work/play SUV/truck.

Posted by yppies | May 7, 2008 10:38 AM
13

Oh, I hope the oil prices keep going up so the Bushes can get enough money socked away to finish up developing their 100, 000 acre estate in Paraguay.

Posted by Peter F | May 7, 2008 10:40 AM
14

Since when did the term "yuppies" mean older, affluent people, with SUVs, who live in the suburbs? Isn't it shorthand for Young Urban Professionals?

So aren't yuppies really the 20-and-30-somethings who already live in Belltown in condos with their dogs and not douche bags from Issaquah? And if so, what is their proper label?

Posted by boxofbirds | May 7, 2008 10:47 AM
15

@14, we're called "working parents"

Posted by Peter F | May 7, 2008 10:50 AM
16

Poor people are perfectly capable of putting their V8 beast on Craigslist and using the proceeds to buy a 4 cylinder. Please stop with condescending nonsense that only rich people can switch to a car that gets better mileage.

And yes, some sucker will buy their V8.

Posted by elenchos | May 7, 2008 10:54 AM
17

@7 yes, but as the burden gets worse on the middle-class, action is more likely. take health-care, for instance. when the prices were high (or too high) for the poor, there wasn't much call for a change in the status-quo. but once it started getting high (and too high) for the middle-class, suddenly national health-care is a viable topic of discussion.

and i still have as little sympathy for the poor with an SUV as i do the middle-class. i do, however, have sympathy for those who will no longer have a reasonable means of transportation available to them.

Posted by infrequent | May 7, 2008 11:03 AM
18

With any luck, something along the lines of this will happen:
1) Someone will find an alternative to petroleum fuel that will somehow be usable in existing vehicles, or an easy way to convert them. No matter how much transit springs forth in the near future, it isn't an alternative for the people we are talking about getting screwed most - the working poor who move farther away from jobs because it's all the can afford.
2) Suburban sprawl areas will convert to dense urban areas of their own. Businesses may choose to operate from the "outer limits" to be closer to their workforce and because rent/real estate is cheaper for them there. After all, Seattle was once just a little blip on the radar. Now look at it.

Posted by Bella | May 7, 2008 11:25 AM
19

Here's what will happen...

Some of us will be cruising down the freeway in our new (deeply discounted) Hummers (without traffic !!!) while the rest of you will be sitting in puddles of piss and watching the fleas jump off of the the bum sitting next to you on the bus.

It will be nirvana! The affluent will have much less traffic to contend with, the eco-fascists will finally have the satisfaction of seeing the unwashed masses forced out of their cars and onto buses or bikes, and the unwashed masses will be able to enjoy the satisfaction of "doing something good for the environment" by being reliant upon alternate transportation. (Which you will all, of course, just love!)

It's a win - win - win scenario.

We will all get to live in the world as ECB wants it to be!

Posted by You_Gotta_Be_Kidding_Me | May 7, 2008 11:41 AM
20

Bring it on! High cost of access is the BEST way to keep the Hoi polloi out of the way!

Posted by You_Gotta_Be_Kidding_Me | May 7, 2008 11:43 AM
21

In the old days, when gas prices got high, people started hitchhiking and carpooling and bus service was expanded.

Same thing will happen again.

Posted by Will in Seattle | May 7, 2008 12:03 PM
22

It's high time to drill in ANWAR. The technology exists to extract oil from multiple taps to just a few drills. Seriously, how many of you greenies are planning your next vacation up there? The Alaskans want it by a majority, and the environment and wildlife can be minimally affected. Yes, I know that’s not good enough for you liberal purists driving your Lexuses – who will still complain about the mean and nasty oil companies (that only make 8% profit) and we still haven’t had any new production come on-line or refineries in years.

Posted by raindrop | May 7, 2008 12:35 PM
23

Well for one thing, more people are going to convert to high-mpg vehicles such as scooters, motorcycles, hybrids and the like.

Poor people who live out in the hinterlands and have to drive 20 year-old beaters will take it in the proverbial shorts, because they won't be able to afford to buy a newer, more fuel-efficient vehicle. Those that take whatever public transportation is available to them will find their commute more crowded, longer, and generally less pleasant than it is already, but at least they'll have the marginal satisfaction of seeing more middle-class folks doing the same.

Meanwhile, middle-class suburbanites will gradually transition from their gas-guzzling SUV's to something more practical - which for many will mean, instead of owning TWO enormous SUV's, they'll ditch one in favor of a hybrid or other high-mpg vehicle, something that's still big enough to hold a few groceries or the kid's soccer gear. They'll have to scrimp a bit in other areas, but unless fuel prices go absolutely through the roof - say approaching $10.00 a gallon - they won't do anything significant to change their lifestyles.

The upper class will of course make no changes whatsoever, because in all likelihood we're already subsidizing their corporate-owned limos, so they've got no incentive to give up the goodies they can still easily afford.

Oh, and we'll continue to spend tens of billions of dollars on freeway infrastructure, because people will still insist on driving everywhere on their own, and because it would take us 50 - 100 years to radically alter our current social patterns vis-a-vis where we live and where we work.

Posted by COMTE | May 7, 2008 12:40 PM
24

@22

1) There isn't as much oil in ANWAR as being advertised.

2) The logistics of getting oil out of Alaska is EXPENSIVE. And you are already doing a bang up job at maintaining the pipeline. Even with the cost of Alaskan oil.

3) IF we started drilling tommorow, we wouldn't see that oil for at least 10 years ... I remain to be convinced it will have an effect on national security etc. etc.

4) Drilling in the ANWAR has nothing to do with homeland security, energy independence, and everything to do dollars, particularly the dollars of the phaty check Alaskan citizens get every year.

If they can be honest and address point number four, then I would find it MORE reasonable to drill for more oil in the ANWAR. But as it stands right now, it just seems like excess.

Oh yeah, and EVERYONE wants to build more refineries now ... except for ironically the oil companies ... maybe not so ironically.

Posted by OR Matt | May 7, 2008 12:45 PM
25

@22:

You can't blame the lack of investment in refinery production on the "lexus liberals" - that one's squarely on the shoulders of the oil companies, and their partners in the refining game, you know, the companies that OWN the refineries, because they're the ones who for decades have held back on making such investments, in order to restrict production of finished product, which in turn restricts the available supply, which in turn keeps prices artificially inflated.

And before you try the "no, it's those wacky environmental laws that restrict new refinery expansion" canard, that one's been thoroughly rebuked.

In 2004 Shrub floated the idea of offering refiners literally thousands of acres of unused land on inactive military bases as sites for refinery construction - which the industry promptly shot down by claiming the "rate of return" wasn't worth the expense of investment.

Strangely enough, however, the rate of return on shareholder equity in the industry at that time was averaging around 24%, well above the rate generally regarded as sufficient to justify new investment. It's not that refiners couldn't afford to build new facilities, and it's certainly not that they were hampered by any onerous environmental restrictions; it was simply that they recognized that if more refineries came online, the supply of gas would increase, and they wouldn't be able to charge as much - and therefore make as much profit, which BTW generally has been running around 10-12% for most major oil companies - as they could with fewer refineries in-play.

And drilling in ANWAR isn't going to make things easier in that regard, either. Refinement capacity is already maxed out, and in fact doesn't even meet domestic demand - we actually have to import several million barrels a day of gasoline from refineries in Canada and Mexico just to bridge the gap.

So, until the industry decides to actually increase domestic capacity, it doesn't really matter WHERE the crude comes from, because the supply of crude isn't the sole driver of gasoline prices; it has much more do to with the fact that the industry has deliberately restricted the amount of finished product it can deliver in order to maximize profit.

Posted by COMTE | May 7, 2008 1:08 PM
26

And ANWAR isn't adding a couple percent to the supply of the US market, it's adding a fraction of a percent to the global market, meaning its even less likely to have a noticable effect.

Yet all these facts collide with the conservative American world-view and they think "but that means the price of gas is determined to rise! Yet I KNOW God promised cheap gas for all Americans forever! I know it!"

As long as you find your way out of this dissonance by saying "ANWAR" or "war" or "lower taxes," you'll remain a conservative. And still the price will rise and rise.

Posted by elenchos | May 7, 2008 1:31 PM
27

You know, Hernandez@1, I think you're a pretty good writer. But show me one- one- fucking McMansion in Issaquah. Prices are high in Issaquah because we have two of the best high schools in the state. But most of our housing is 2/3 BR 1/2 BA houses. Even up in the Highlands. On smaller lots than in Seattle.

Yes we commute. I carpool with a buddy to Kent, where my company is (and the schools suuuuuuuuuuck.) What would you have me do?

Posted by Big Sven | May 7, 2008 3:21 PM
28

You're supposed to sell your house and move your family into a studio apartment on Capitol Hill, Sven. That's always been The Stranger viewpoint.

Posted by Fnarf | May 7, 2008 3:52 PM
29

to be fair, fnarf, he could move into a one-bedroom and still fit the plan.

Posted by infrequent | May 7, 2008 4:04 PM
30

Fnarf, I thought the stranger viewpoint was, don't have a family and live in a studio.

regardless i welcome the higher gas prices and recession because poor people will adapt and survive. fuck the idea that a resetting of price parameters is bad for poor people because they dont have jobs.

Posted by Bellevue Ave | May 7, 2008 4:06 PM
31

@comte,

what business doesn't consider the marginal costs outweighing marginal profit? and consider this, if the only factor preventing new refineries is the established refineries aren't going to build new ones, why hasn't there been new players to the refinery game? what force is preventing new capital for new companies? could it actually be the government?

I agree completely that the current industry doesnt have an incentive to build new refineries.

when you say environmental issues are a canard, you reference one idea by one shitty president. what processes actually need to happen for a refinery to be built in regards to environmental law?

Posted by Bellevue Ave | May 7, 2008 4:17 PM
32

Riots.

Posted by treacle | May 7, 2008 5:44 PM
33

@27

My father in law spent several decades as an engineer for a very large manufacturer of aero-planes, which was headquartered in Seattle, WA, during those years. Over the course of his career he worked at plants in the far North, South, and in between, of the Puget Sound region. In most of those decades he and the other engineers rode the company bus to work. And he thrived and prospered.

So you it doesn't always depend on cheap gas. Or the "Life and Death of the Great American City" model of walkable dense neighborhoods, either.

Posted by elenchos | May 7, 2008 8:08 PM
34

e@33: I tried to vote last fall for a bill that would have increased transit out to my neck of the woods. I'm eager to spend my tax money building mass transit infrastructure. But I also think that politically you have to sugar coat that pill with some money for teh roads, which I guess makes me personally responsible for every dead critter and carbon dioxide molecule in western Washington.

Posted by Big Sven | May 7, 2008 10:08 PM
35

A better use of the money would be a tax credit for converting your existing vehicle to an 80-100 mpg plug-in hybrid and tax credits for buying new 80-100 mpg plug-in hybrids.

Posted by Will in Seattle | May 7, 2008 10:36 PM

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