Handling Finances

Everybody has their favorite pet theory about why gas prices are so high. It could be the evil excessive profits taken by oil companies, risky speculation by profit-seeking investors, a simple case of supply vs. demand or all/none of the above. It’s very hard to know since most of these effects are unquantifiable and it seems like politics has more to do with a person’s answers than actual facts.
Whatever the cause, high gas prices aren’t as bad as most people seem to think. Here in America, gas has been almost ridiculously cheap compared to the rest of the world. By itself that’s not a problem or anything, but it does mean that we’ve become used to thinking of gas as an abundant and cheap source of energy. We’ve built an entire country with sprawling suburbs and extremely limited train and subway access that heavily depends on cheap and abundant gasoline. We’ve scorned fuel efficiency and invested heavily in the largest, most powerful vehicles.

Since oil takes millions of years to form in any useful quantities, it is clearly a limited resource at the rate we’re using it! I should qualify that — we will never run out of oil altogether, it will just become more and more expensive to extract from the ground until some other form of energy is cheaper. We know we’re going to run out of oil at some point, so clearly we need to prepare well in advance. Except, we’re not remotely prepared. We’re decades away from any other fuel source for our vehicles and that’s assuming significant investment for those decades.

One option that gets thrown around a lot is to allow drilling in X or Y location that is currently being protected for Z reason. This will make the situation worse — prices will drop, investment will drop with it and we’ll be right where we started except X and Y reserves will now be depleted.

An unpopular solution.

Quite simply, we need to feel some pain in order to prepare for the future. When prices are low, some people simply deny that there will ever be a problem, the majority simply doesn’t care as long as their tanks are full and a second minority complains ineffectively that our increasing suburban sprawl and refusal to develop alternative technologies or even simply more fuel-efficient vehicles is just digging us further into a hole. When prices hit $3.00 per gallon in America, the former and latter groups grew for a while and then everybody went back to not caring. Now that gas costs $4.00 per gallon, people are really starting to hurt and put a significant bit of money toward changing our habits now so we can avoid wasting a huge amount of money changing once we’ve exhausted our last reserves and gas jumps to $5.00 or $6.00.

High gas prices aren’t all good — the poorest among us who have no cushion will suffer the most as they have to choose between gas to get to work and food. I certainly don’t enjoy paying twice as much for gas as a couple years ago. At the same time, this is the first I’ve seen long-term efforts to increase the reach of mass transit, to develop electric and hydrogen-fueled vehicles and to actually make token efforts to use currently available technologies to increase fuel efficiency in the average American car.

I won’t claim that the days of the 4-car family or the 1-kid family with and SUV and pickup that gets used once a year are over. Many of us have grown quite accustomed to the convenience of these light trucks even if we could easily do without. I’ve even heard some people who genuinely feel entitled to the affordable use of a Ford F-350 used primarily in a daily hour-long freeway commute. In the end though, we’re just going through the pain at the start of any new exercise routine. It won’t be easy, and it might not feel good at first, but in the end, we’ll stop wasting a limited resource, limit pollution, and save billions of dollars that are currently going toward oil companies and oil producing countries. And hey, if we can avoid pumping up the last of the American reserves in the process, then we might truly become less dependent on foreign oil rather than putting ourselves in a desperate position by using all our oil first.

People love to complain about gas prices.  I once heard that “we’d find any price ridiculous if it was displayed in huge numbers at every major intersection” but the truth is that gas prices are on the rise and it’s hurting many people’s budgets.

Saving on gas isn’t easy.  Sure, you could obsessively check gasbuddy.com and go out of your way to find the best deals (thus burning more gas to get there) but unless you want your car to smell like french fries by running on cooking oil,  it’s tough to save a meaningful amount on the price of gas.  However difficult it is to save on the price of gas, it is easy to save a ton on the amount of gas you burn in your daily driving!  How much can you save?  How does $0.50 a gallon sound?

Cars generally get the most miles per gallon at about 55 mph.  This isn’t just a hold-over from when speed limits were 55 mph nationwide (to save gas by the way) as some engines are tuned to be most efficient at 60 or 65 — it’s more a simple matter of physics.  As you drive faster, you have to push air out of the way faster and the drag on your car increases exponentially with speed.  In simple terms, every 10 mph you drive over 60 makes your engine burn enough more gas to effectively increase the cost of gas by $0.50.  As I drive to work on a 60 mph road (that’s the limit — traffic generally pushes over 70) this is a huge deal for me!

It’s not always safe to drive significantly slower than other traffic, but I’ve found a significant number of people who drive similarly in the slow (right) lane.  No matter how fast traffic is moving (when it’s not backed up in rush hour anyway) driving on the slow side will save you money both by decreasing the amount of fuel you buy and by avoiding nasty speeding tickets and higher insurance rates.  Oh, and it’s also safer, but if people cared about driving safer, they wouldn’t be going 10 mph over the speed limits anyway.

But I don’t have time to drive slowly!

Especially when I’m driving with passengers (*cough* my wife) I occasionally hear that driving more slowly isn’t worth the extra time spent driving.  It’s true, when I’m driving 600 miles on the interstate, I can save 30  minutes of a 9-hour drive by driving 70 instead of 65, but on my daily 20-minute commute, saving 90 seconds by driving 5 mph faster isn’t worth the extra $0.25 in my book.  Seriously, if you’re worried more about 5 minutes a day than $0.25 a gallon, stop whining about gas prices and drive as fast as you think you can get away with!

Of course there are other, less effective ways to save gas.  Fueleconomy.gov suggests that next to slowing down, stopping and accelerating less aggressively can cut your fuel cost by 33% on the highway and 5% in the city.  If you’re carrying around an old book collection in your trunk, cutting 100 lbs of weight can also increase fuel efficiency by 1-2% or 3-6 cents per gallon.