Ford, Small Cars, and the Hard Truth Behind Gas Prices

Ford, which led the way in the boom of gas guzzling SUVs and pickup trucks, is now bowing to the inevitable in the face of rising gas prices and shifting production towards small cars. I'd like to draw out a couple of thoughts from what would have only recently been astonishing news.

As congress whips up a flurry of proposals to try to contain gas prices, from offshore drilling, tapping into our strategic oil reserve, and trying to legislate away oil speculation, there are two uncomfortable points we must keep in mind.

First, these efforts are doomed to failure. While there will certainly be fluctuations in the price of oil, as the last week has shown, none of the proposals floating around will have any real effect on long term gas prices. Oil is expensive because: a) we are probably running out of the stuff, and b) even if we're not yet running out, skyrocketing demand from places like India and China mean that demand will continue to outstrip the supplies, and oil prices will stay high.

The second uncomfortable fact is that oil should be expensive and any policy successfully limiting gas prices, as unlikely as such a policy is, would be a disaster. It is true that gas prices are hurting folks. High oil costs are certainly contributing to high food prices, though not as much as the misguided crop based biofuel insanity. Rising oil costs are also contributing to a global economic slowdown, though not as much as the US's ridiculous series of bubbles bursting.

But rising oil costs have also been the only force in history successfully starting to shift our behavior around fossil fuel consumption. We are buying less SUVs. We are riding more mass transit. A serious conversation about alternative energy sources has begun. We've known about global warming for 20 years, and were aware of the threat that dependency on oil imports posed to our economic and physical security for even longer, but we did nothing.

Instead, we allowed oil to be kept artificially cheap. The true costs of an oil based economy, including environmental degradation and global warming, subsidies to industry, military expenditures to protect supplies, subsidizing the highway system and auto industries, have all been hidden. Gas should be $10-15 per gallon, as it has been in much of Europe for some time. We need to let gas get more expensive, not less, and start looking at the deeper changes required to live in a world of expensive oil, rising temperatures, environmental degradation, and rising populations. 

What congress should be doing is looking at reducing long term demand by implementing a crash program for alternative fuels and putting policies in place to cushion the blow of rising prices for those who can't afford it.

Our cheap fossil fuel based way of life is changing. That's OK. Change is the only constant in the universe. High oil prices are not the problem, they are just a constant reminder of this underlying truth. Now we must tackle that hardest of things for human beings, changing consciously, not simply as a reaction to events. We have to imagine a different kind of world where our presence nurtures the land rather than poisoning and depleting it.