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What If Gas Cost $100 a Gallon?
Posted by Robert Rapier on May 26, 2008 - 7:00pm
Topic: Demand/Consumption
Tags: conservation, fuel efficiency, gas prices [list all tags]
I am very fond of thought experiments. I like to ask "What If?" This can help me wrap my head around a problem. For instance, if I wonder how much land it would take for solar panels to produce enough electricity to supply the U.S., that's a thought experiment. It isn't that I think we are going to build a solar grid that is 50 by 50 miles of nothing but solar panels, nor that I am oblivious to energy storage issues. Rather, it can help frame for me whether the idea is daft from conception, or whether there is a nugget of potential embedded within.
Lately I have been thinking of another thought experiment. What would I, personally, do if gasoline was $100 a gallon? Now that may seem silly. Nobody thinks we are going to have to deal with gasoline at $100 a gallon. But that misses the point of the thought experiment. When I ask people at what price point gasoline is going to have a major impact on their lifestyle, that seems to be a moving target. When gas was $2, they said $4. Now that gas is $4, many have realized they won't make big changes at $10. Oh, they might buy a smaller car, but they aren't going to start walking 3 miles to the store. A friend who drives a Suburban recently told me that he doesn't care about gas prices; that he is going to keep driving at the same rate regardless. I bet he would have a change of heart if gasoline was $100 a gallon.
So the point is to jump so far out there - $100/gal - that there is no question that 99% of us would have to make some serious changes. The thought experiment is mainly designed to flesh out how people might cope as gasoline becomes more expensive and as we go down the depletion curve. This is already reality for some, as your $100/gal dilemma is someone else's dilemma at $4/gal.
What I would like is to hear how you would cope with $100 a gallon gasoline. Let's presume that gasoline prices increase to $100 at a steady rate over the next 5 years. Because many of our energy sources are interchangeable, let's assume that other fossil fuel sources (coal, gas, etc.) follow suit. Alternative (non-fossil fuel) energy sources, such as solar and nuclear, would also follow this trend, but not at the same rate since they are less dependent on fossil fuel inputs. So the idea is really, with respect to fossil fuels, "How low can you realistically go?" I don't want to make any assumptions on what would be happening in the economy as a whole, because in reality the economy would have collapsed under those prices. So my assumption is to simply determine what is within my power to change as fuel prices climb - and I am forced to make difficult choices.
Here is how I think it would affect me. Looking at my own situation, I just bought a house 23.5 miles from my office. However, I did this with my eyes wide open. The fact is, I don't spend much time in the office. Since I started with my new company on March 1st, I have spent just 4 days in the office. So, a long daily commute is not something I have to deal with. In fact, I have never actually made the commute, as the 4 days I spent in the office preceded the purchase of my house. (Presently I am on site at our factory in the Netherlands, and I ride a bike to work).
But, even when I do have to travel to the office, at $100 a gallon, that 47 mile round trip will add up. Even the most fuel efficient cars in the U.S. are going to cost me around $100 for the trip. If I have to make that trip twice a month - and so far I am averaging less than that - it's going to cost me $2400 a year - and that's presuming I have a car that can get 47 miles a gallon.
Clearly, something like an SUV is out of the question. This could cost me $400 every time I had to go to the office. So SUVs, even now in their initial death throes, will be transportation only for the truly rich. What I really want - unless the cost is prohibitive - is the most fuel efficient car I can find. Today, I think that's a Toyota Prius, but I am really hoping that an electric car rides to the rescue. (I would definitely choose the public transportation option if available, but right now it isn't available from my home location to my office).
Even then, $100 to drive in to the office is pretty steep. I want to find a way around that. I am going to lobby my employer for permission to telecommute. At those prices, he is going to get a lot of those requests. When I think about what I do during a typical day, almost everything could be done via telephone, teleconference, webconference, or webcam. And when I do have to go to work, I am going to search for a car pool. At those fuel prices, a lot of people are going to be willing to share rides. I would imagine that new, creative ways of organizing car pools will pop up.
I would completely stop using an auto for short trips, and likely buy a small motorcycle for quick trips within 5 miles. If time is not a factor, I will ride a bike for those short trips. We would have to do a much better job of planning out our groceries, as it won't be economical to run to the store to pick up a few items. Entertainment options like Netflix will start to look a lot more attractive.
In my home, I would also need to make changes. My wife and I currently fight over the thermostat. When I am alone, I will set the thermostat as high as 85 in the summer. With the family at home, I will drop it to 78. The wife and kids like it at 75. (It's just the opposite in winter, with me wearing a jacket around the house). With gas at $100 a gallon and electricity sharply higher, we are going to have to get used to being less comfortable. 82 degrees inside is a lot better than 105 degrees outside. But even so, I would probably face $1,500 a month electric bills.
I am going to install as many solar panels as I can afford, because at these prices the payback period should be very short. Ditto for a solar hot water heater, which keeps beckoning to me, but remains just out of reach. (I have a brand new hot water heater in my new house, and I can't justify replacing it already). Ground source heat pumps are going to look much more attractive. I will need to identify and track the transient electricity drains in the house by installing something like the Kill-A-Watt
My business travel would not be sustainable at those rates. For the next 12 months, I am probably looking at 12 trips just to the Netherlands, and additional trips to China. If those trips are 20 times as expensive, I am going to have to get webcams
Other things would obviously be impacted, such as where we decide to vacation, or where to invest any money that might be left over (which lately has been in Brazil). But I think that covers the major items. What have I overlooked?
I am greatly interested in your thoughts. It helps me understand just how we are likely to respond as the going gets tough.
http://reddit.com/info/6ktgj/comments/
Thanks!
Air travel is going to be the first thing to go. Prices will probably double before year end, and then keep on going up as more and more airlines "consolidate", an euphemism for buying up bankrupt carriers assets. AA is already scrapping planes. I have doubts about Robert ever actually making all those trips. My guess is that air travel will be down by more than 50% in two years with most regional airports closing shop. Goodbye tourist industry. Goodbye my home town which exists on tourism and is already loosing its air routes.
could you show your work, as my teachers used to say?
Stating "my guess" eliminates the need for proof. Clearly his guess is his guess. Personally I won't be surprised either way.
my guess is that air travel will double in the next 2 years.
If you are guessing it will double in *price* in the next two years I would say you are half way there.
If you are *guessing* otherwise you have showed the value of your opinions.
hey I"m just guessing!
“my guess is that air travel will double in the next 2 years.” Posted by John 15
Just reading the MSM these last few weeks, do you really believe this is even remotely possible? If you do, please let me know who your Acid dealer is. He’s got to be selling some baaaaaaad stuff; he has to be, considering the quality of this hallucination.
Antoinetta III
Unfortunately your guesses don't have much credibility here!
I would go along with those estimates of around a 50% fall in air travel in two years.
The rationale does as follows:
The airline industry is not set up to cope with oil at $125/barrel.
Present prices for fares are relatively low because many bought oil on the futures market, but this position is unwinding.
They are hoping that oil prices drop, but if they don't then they will be caught by the dual price structure of air fares, with the bulk of travel at cheap tourist rates.
So those will rise substantially, and people hard hit by the recession which those prices if maintained would create would mean that the tourist trade would die.
It is my expectation that oil prices will continue to rise, so the effects would be even greater.
It might be a good time to invest in tourist resorts close to major population centres!
my understanding was that the airlines were caught unhedged, except for Southwest, this because they thought oil prices would fall.
airlines are raising prices right now and airlines are going out of business so the industry should be a bit healthier for a little while because they have less competition.
If you check out the financial papers that is not what the industry is saying.
Even the strongest are in trouble, and that is at current oil prices.
The business model just does not work at anything like current prices, let alone any increase.
My brother-in-law says the same thing. He works for American. They are not expecting fuel prices to drop and people will have to adjust to ever-increasing airline fares. And, he said just what you said...the old business model for the airline industry will have to change. He believes that hybrid fuel planes are the answer...biofuels, fuel cells, etc. He is not receptive to conservation.
Some around here regard me as a cornucopian, but powering aircraft is a really very difficult problem indeed with oil shortages.
This is the exception which proves the rule, and if you haven't got fossil fuels then producing hydrogen or artificial liquid fuels would seem to be the only way.
Doing that will be very expensive and take a lot of time, and it should not be held in any reasonable contemplation that for many years the mass travel industry will cease as we know it today.
Very expensive flights across the Atlantic and Pacific with some turbo-props or propfans for shorter journeys but mainly trains and boats is the size of it.
Good-bye Hawaii.
Aloha also means goodbye.
Gotta go start carving a giant stone head now...
Coal-To-Liquids is how we'll make Jet fuel in the future...
The air force is already pumping money into it and no they don't care about the extra greenhouse gas emissions.
http://online.wsj.com/article/SB121134017363909773.html?mod=googlenews_w...
I'm sure they do care - they just have higher and more urgent priorities. Whether they will make enough CTL Jet Fuel to sustain cheap consumer flights to Disney World and Hawaii remains to be seen.
Good to know they'll be able to keep their $240 million fighter-bombers going in a time of economic depression, maybe they will save Washington the embarassment of the world doing something productive and blow up a few wind turbines :)
"Very expensive flights across the Atlantic and Pacific with some turbo-props or propfans for shorter journeys but mainly trains and boats is the size of it."
Zepplins anyone?
Funny you should say so - I posted on a demonstrator air-ship the other day!
I think technological solutions are possible - but the present industry will disappear/remodel long before they come along.
We shared comments on that airship yesterday. Intriguing idea. What do you suppose a transatlantic fare would have to cost? Seems like it might be pretty high-- that thing will take a while to cross the ocean, and people will need to sleep, so they won't be able to carry many passengers. It will be sort of like an arial Amtrak
What makes y'all think that airships are more energy efficient? They are bulky, thus have major drag, needing a lot of energy to move through the air. And that's at slow speeds, meaning that any headwind is a major additional loss of efficiency.
The relevant efficiency is per mile, not per minute. It is a common misconception that the engines of an airplane keep it in the air, thus the bouyancy of a ligher-than-air airship seems attractive. But in truth the wings keep an airplane aloft, while the engines are there to overcome drag.
Moreover, the helium to fill airships is depleting (and way too precious to waste on such - it is not "used up" on purpose but it does always leak). Hydrogen is renewable (in principle), but flammable...
The most efficient way to fly long distances is with long wings at relatively slow speeds. Sailplanes fly for hours with no engine at all, extracting roughly 5 horsepower (for a single-place aircraft) from rising air movements. I.e., with a 5HP engine such a sailplane could travel in a straight line at about 70 mph in still air.
I would think a decent application for airships would be similar to sailing ships, but different. What happens if you don't try to go where you WANT to go, but instead just drop the airship into the jetstream and use power only for maneuvering? I know it's a one way street, but it's one way at 90+ kph energy free. On such a large structure, hot air should work pretty efficiently.
That's a very good point.
To the extent that they are adopted I would see them following the trade winds, rather than powering through.
The large surface area also means that part of the power can be generated by PV.
I don't see them as anything remotely approaching the current airliner fleet though - perhaps some might be used as heavy lift vehicles instead of road transport.
The business model will have to change. They will need to begin with the assumption that flying will be very expensive, and thus only the upper crust of business and leisure travelers will be able to afford it. Those who can afford it will only fly when there is a substantial time savings to be achieved over ground transport, because for them, time is money.
This means that the small planes flying feeder routes will be gone. This also means that the megaplanes designed to fly the masses inexpensively will be gone. Yes, they are efficient on a per-passenger basis, but they also need to accumulate a lot of passengers in order to fly a full plane. The upper crust passengers would rather not have to wait hours for one megaplane and have to rub shoulders with we commoners, they would rather have the option of more frequent schedules on smaller aircraft.
Scheduling might change completely. regularly scheduled routes might become a thing of the past. Instead, airlines might be run entirely on a charter basis, accumulating passengers and flying only when they actually have a full aircraft.
I don't know if any of the existing airlines can transition to this new model. They might all need to go bankrupt, and then one or more new model successor airlines might need to pick up the pieces at bargain prices in order to make it work.
The capital cost of owning or leasing say even one new A380 will have an effect of killing off what you have described as the charter model. An airline would find it very hard to have an A380 or even a 747 sitting on the ground waiting for enough passengers to accumulate into a full flight. The interest payment on a $600M aircraft is going to be a lot of money (and no I don't thave the time to dig into the operational costs of airlines) so they need to keep them full and flying to make it viable just to own them.
Rationalisation of airlines will have to occur to concentrate the ever dwindling market onto fewer scheduled flights.
It would not surprise me to see the re-introduction of trans ocean passenger shipping again for inter continental travel, but the number of trips that individuals make via this means may be limited to no more than one in a lifetime.
Then again, the jets will all be sitting on the ground anyhow. It may not be profitable for the planes' owners, but there will be charters flying for awhile since it'll be less unprofitable. Skimping on maintenance will case more crashes, but that's part of the adventure.
They would make decent recycled homes I bet. Given the high quality aluminum structure and their capability of withstanding subzero temperatures.
Has anyone considered the impact of these planes refuelling in the fewer and fewer NET exporting countries?
For example I would expect that London>KSA>Bangkok might remain feasable if the plane refuelled using aviation fuel refined in KSA from local oil...
In addition Ammonia powered airplanes might be possible (Ammonia as an easier to manage Hydrogen carrier) -Ammonia is an widespread Industrial commodity.
Regards, Nick.
Your comments illustrate exactly why I think the huge passenger jets will be as extinct as dinosaurs. Smaller, older jets can be gotten very inexpensively, and it doesn't take so many people to fill them up, especially if you expand the first class section. It won't be a mass transportation market any more, it will be a luxury market, and that is a totally different ball game.
I doubt that we'll see a return to the grand old passenger ships, much as I'd like to see it. Given polulation pressures and the likely imposition of severe immigration controls everywhere, you won't have a bunch of poor people to fill up the lower decks. The well-to-do won't have the time for a leisurely ocean crossing; they would rather pay the premium necessary to get there quickly by air.
"It would not surprise me to see the re-introduction of trans ocean passenger shipping again for inter continental travel, but the number of trips that individuals make via this means may be limited to no more than one in a lifetime."
I would really like to see this. Yeah, forget airships. What inefficiency! But ships ? You can pack lots of people on a ship. I'd like to see an 'economy' passage ... which would not include meals, but where there would be non-fancy food offered as desired. This could be very viable I think. If I were in the ocean liner business I'd start developing a plan for such crossings. I think people would flock to it.
I agree that the business model will have to change (akin to the difference between a low cost carrier like EasyJet and a "regular" carrier like British Airways). However, with the recent collapses of Eon and MaxJet, and the imminent collapse of SilverJet, all business-class only airlines (and hence specifically designed for the "time is money" brigade), the survivors will probably be a different model again. Perhaps it will be more along the lines of spot-hire business jet travel with 10-15 seat aircraft, rather than anything with 100+ seat airliners.
AKH
Looking at the past... I currently live in an old resort city near Atlanta called Pine Lake which is “only” 12.7 miles from Atlanta's zero mile marker. It was built in 1937 back when 12.7 miles was enough to really “get away from it all.” Now, there are more economic centers, mass transit and housing everywhere. I just keep wondering if one day 12.7 miles will be in the boondocks again?
mathematics and linear thinking won't get you there.
OT. I don't know about linear thinking but mathematics did allow us (Humans) to take this picture.
Maybe, just maybe we have a little tiny bit better than a snowball's chance in hell to pull out of our death spiral of addiction to power and do more things like this. Couldn't agree more with the comments on this site. Congratulations to the scientists and engineers at NASA!
http://www.badastronomy.com/bablog/2008/05/26/best-image-ever/#comments
Mathematics and linear thinking won't get you there.
at $100 a gallon i recon a fair few of us wouldn't have to worry about commuting since we wont have jobs.
Ignoring that i currently commute 10miles to work so a 20mile round trip on a 125kwaker motorcycle that does 60mpg and could do better if my maintenance and riding was a bit better. I some times cycle instead but i guess id have to cycle more regularly. I may upgrade to a susuki bandit 600 thatl do around 50mpg but that wouldnt be possible at peak oil prices or hypothetical prices. A better option for me would be to get a royal enfield bullet that tops out at only 70mph but does 87mpg. But id then convert it to run on ethanol and use a home made still to generate ethanol. In theory my commuting costs would then be very low but if i dont have a job because of the huge recession this is all very hypothetical.
What I don't hear mentioned is the fact of inflation. If gas costs $100 a gallon it might not be out of line with an economy that is overheated with inflation.
Will the economy be gutted by hyper-inflation?
Since kids are expensive in the industrialized world, "my guess" is that alot of people will have decided not to have (or have any more) children before we reach $100/gal.
I've wondered at times what the world would be like if land ownership was contingent on responsible breeding. What if guys were required to have had a vasectomy before they could own land?
I could live with that on a personal level (I have no desire to have children, even though I'd probably be a better parent than average), but this wouldn't affect the deadsh**s who will only ever rent and father six kids to five women (each woman also having several kids to several fathers).
Compulsory sterilisation at birth (with a 1-in-30 chance decided by a random number generator of avoiding sterilisation) may be the way to go. ;)
Off you go, then, get the chop.
When you've done it, you can come back and recommend it to the world.