Planning ahead

Wednesday, April 30, 2008

Maybe it's time to get serious in planning for $5 a gallon gasoline. Even the thought itself would have been ridiculed not too long ago. But study after study says that world consumption — especially from Russia, India and China — will continue to push gas prices higher and higher. Expect prices to nearly double in the next four years, says a new study out this week.

It's time to quit playing the blame game in our constant complaints about soaring gasoline prices. At this point, the profits of Exxon or the lack of refinery and drilling capacity here at home matter far less than how we Americans will adjust to this new challenge.

Were the problem limited to the shock at the service station, that alone would be a major adjustment for all households. But, obviously, the price explosion will be felt in nearly every facet of our lives from higher food prices to the loss of jobs as business tightens its belt to offset the gasoline spiral.

Our first action will be to complain and demand change. That is expected. But beyond that, everyone needs to make a common sense assessment of the impact on their budgets, their activities and their jobs in the face of this impending probability.

The reality is that some segments of the population will simply be unable to absorb these costs. There will be increasing pressure on the federal government to bridge the gap in this price hike or on employers to nudge wages to help offset the higher costs. But neither the government sector nor the business sector is exactly flush with cash right now and that may put most of us on our own to handle what may well be a crisis in the making.

Despite the practical sense, our efforts at higher fuel mileage mandates for automobiles or mandatory car pooling are just drops in the bucket of the oil crisis. At the true core of the problem is the worldwide change in transportation. The lifestyle changes in other countries are bringing millions of more vehicles into the world and they suck up consumption in record amounts. Our minuscule efforts at conservation are noble in purpose and minimal in impact.

We cannot and will not find alternative sources of energy in time to avoid this dilemma. We cannot and will not make sufficient adjustments — including releasing our strategic oil reserves — to counter this price spiral. If states and the federal government begin removing the taxes imposed on gasoline — which is likely — that may soften the blow. But the counter is that our infrastructure will begin to crumble with less revenue and we'll simply swap one problem for another.

I'm by no means cynical nor pessimistic about this issue. I am being realistic and trying to plan a future that seems inevitable. The time to address these issues is now, not later.

Since over half of the oil consumption involves transportation, there's limited value in looking beyond that point. And all experts agree that transportation consumption will grow, not diminish.

Driven by higher fuel costs, food prices are growing daily. The highly respected Wall Street Journal has made a case for stockpiling food. Reports this week indicate that some airlines will simply abandon flights because, even at full capacity, they lose money as a result of fuel costs.

Should we be alarmed? You are damned right we should be. But at the same time we must understand that the rules of the game have changed and we must change accordingly. The difference now is that in the past, it was America who could set the rules. No longer is that exclusively the case.

If you're planning on having children, you prepare. If your children are heading to college, you prepare. Well, we need to start planning for the soon-to-arrive day when our fuel consumption and our mortgage payment are equal.

For some, that day has already arrived.

Michael Jensen is a Southeast Missourian columnist and publisher of the Standard Democrat in Sikeston, Mo.

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