By The Way...

Tuesday, May 16, 2006
9:43:00 AM EDT
Hearing Walk On -- U2
Two interesting news bits concerning $3 gas and how people are reacting to it. First: Most Americans aren't likely to make big cuts in gasoline use:

Americans are unlikely to slice their gasoline use despite high fuel prices — a striking notion viewed against the current clamor for fuel-efficient cars, the buzz about alternatives to gasoline and the anger about sending our petro dollars to hostile but oil-rich countries.

Many factors play into America's reluctance to conserve, but two facts of human behavior dominate, psychologists say: We get used to high prices that are reached incrementally. And we're more afraid of losing something than we are motivated by the advantages of giving it up.

Second: Escalade sales are up!

As it turns out, we're griping while we guzzle. Since Katrina gave us our first $3 pump prices last fall, gasoline consumption in this country has actually risen, confounding the energy experts who recall how much we throttled back on our gas usage following the '70s oil shocks. Where are we burning all this gas? In big, powerful cruisers. One in four new models today comes equipped with a gas-thirsty V-8 engine—which is unchanged from last summer, before gas prices spiked, according to new data from J.D. Power. And some of the best-selling rides on the road today are GM's trio of beefy new SUVs—the Chevy Tahoe, the GMC Yukon and that blingy 'Slade, which saw its sales surge 127 percent last month. Meanwhile, last year's "it" car, the hybrid, is becoming a harder sell. Sure, dealers are still selling out of the Prius, but sales of the Honda Accord hybrid plunged 69 percent last month and Ford had to resort to a zero percent financing deal to jump-start its Escape hybrid.

Fascinating stuff.

I have to admit that while I don't like $3 gas, the high price of the gas hasn't hit me very hard, probably because I work from home and most of my daily travel is confined to dropping my daughter off at school and then picking her up; Krissy works out of the home but her commute is about 10 miles, so it's not a huge deal. But I find it difficult to believe that people who actually have to commute larger distances aren't feeling the pinch in some way or another. I also wonder what it would take before people actually start to hurt on gas prices. We used to think $3 a gallon gas would do it, but apparently people can take that. But what about $4 gas? $5?

I've already decided that my next car will likely be a hybrid of some sort or another (unless I cave entirely and get a Mustang), so to some extent my car-buying behavior is already shaped by gas prices. But have gas prices changed the way you do things? Are you driving less? Thinking about fuel economy more? Or are just keeping on doing what you're doing? I'd like to know.


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This entry has 5 comments: (Add your own)

• #5 Comment from lurkynat 
  5/17/06 12:19 AM | Permalink

  Dear John,
  Prius rules! I wish you would write more about why the other two hybrids are struggling though because I don't get that part.
  natalie
• #4 Comment from honugrld 
  5/16/06 2:13 PM | Permalink

  One driving (ha!) motivation for me to change jobs recently was increasing gas prices. I had a 100+ mile roundtrip commute to work at a non-profit (i.e., low pay job that I loved). With no chance of a raise any time soon, it was no longer finacially sensible for me to stay at that job even with the very fuel-efficient car I drove. In fact, if gas prices stayed up over 3.25 or so, we'd actually lose money by me working, after factoring in day care. I'm now working in town, at a higher paying job that is slightly less emotionally satisfying. However, there is opportunity to get my current organization involved in similar activities as to what I was doing previously so I don't feel a total sell-out.
  
  We've also made the effort to combine errands as much as possible, and to try to do them on our way home from work. But in our neighborhood, I think we're one of the few who limits our driving. Most people near us drive big SUVs, and seem to be in and out several times a day.
• #3 Comment from monponsett 
  5/16/06 10:38 AM | Permalink

  We have an army running wild in Asia, and the world thinks we suck anyways... why not just steal all the oil in the Middle East? I'd rather have free oil than a Bush-built Iraq.
• #2 Comment from dpoem 
  5/16/06 10:14 AM | Permalink

  I'm definitely driving less.  But, like yourself, I work from home, and have no commute.  However, I don't go out nearly as much as I used to.  A group of us used to get together once a week here in downtown Milwaukee, but now we usually only meet up once a month or so.  The money we once spent on drinks and dinners now go into our tanks.  
  
  I wonder if gas gets to $5, will we see businesses in areas that do not have adequate mass-transit (like Milwaukee) start to hire employess and base their wages on their proximity to where they work, as opposed to their qualifications?  And, what would be the repercussions of that?  
  
  -Dan
  http://journals.aol.com/dpoem/TheWisdomofaDistractedMind/
• #1 Comment from schnauffoo 
  5/16/06 10:04 AM | Permalink

  I'm not thrilled at gas prices right now.  It's costs me $60 twice a week to keep my vehicle running.  The problem with noticing that Americans "refuse" to conserve is that most Americans don't have the option to conserve.  The daily commute is mandatory if we want to keep a roof over our heads and food on the table (oh, to be self-employed and be able to work at home someday).  My wife and I try to combine all our errands into one trip a week to conserve, but it we already don't drive much so it doesn't really help all that much.