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It was the summer of 2008 and high Gas prices were getting people to think about how much they drove.  It was getting a lot of people to rethink the cars they purchased and it was actually making a lot of headlines.

High Gas Prices Cause Bike Shortages in N.Y.

High gas prices are causing spot shortages of bikes in New York City, as commuters turn to pedal power.

Many of these new cyclists are from areas not commonly associated with the "Bike Belt" — neighborhoods such as the Upper West Side and Williamsburg in Brooklyn — but are instead from Queens and other places where driving to work has long been common and affordable. With gas costing nearly $4 a gallon, these commuters are switching to bikes, leaving some stores short on fashionable brands and preferred colors.

It was steep enough for people to worry about a permanent trend in changing habits, from buying different kinds of cars to changing how we live our lives.  Could you imagine?  

Gas prices rattle Americans

Record high gas prices are prompting Americans to drive less for the first time in nearly three decades, squeezing family budgets and causing major shifts in driving habits, federal data and a USA TODAY/Gallup Poll show.
As prices near — or in some places top — $4 a gallon, most Americans say they are cutting back on other household spending, seriously considering buying more fuel-efficient cars and consolidating their daily errands to save fuel.

Americans worry that steep gas costs are here to stay: eight in 10 say they doubt today's high prices are temporary, the poll finds. It's the first time such a large majority sees pricey gas as a long-term problem.

The $4 mark, compounded by a sagging economy, could be a tipping point that spurs people to make permanent lifestyle changes to reduce dependence on foreign oil and help the environment, says Steve Reich, a program director at the Center for Urban Transportation Research at the University of South Florida.

But as you notice, the last two summers actually haven't been as bad as the summer of 2008, I noticed that myself.  It's not an accident.  

As Daniel points out in the article below, many might think low oil prices is a bad thing, but not necessarily so.  

Why OPEC Doesn't Mind Low Oil Prices by DANIEL INDIVIGLIO points out something that was talked about today on CNBC's Squawk Box.

OPEC is more concerned about long-term market share than they are about short-term price gains. Therefore with lower oil prices, what you're actually doing is raising the entry barrier for alternative fuels. I speak with OPEC regularly, and this is consistently their main concern is about the political shift of the sentiment in the U.S. especially towards alternative fuels. The cheaper you make OPEC oil, the harder you make it to bring alternative fuels to bring on. So no, I don't think OPEC is that concerned.

I think he makes an interesting point that ties together with the fact that our Government so heavily subsidizes energy costs that many Americans don't pay the true cost for Gas.  In a piece just this week, Mark Engler argues that Gas Is Really Costing Us About $15 a Gallon.

These are the costs we do not pay out of pocket, but we pay them when our environment is harmed, health care from pollution, etc.  It's the indirect costs of dirty energy, the dirty energy that oil companies would prefer that we remain dependent on even if it means the ultimate destruction of our very planet because it's profitable for a very few.

What We Do Not Pay at the Pump

Aspects of this situation are reminiscent of the aftermath of another recent “spill.” They recall the way in which bailout banks like Goldman Sachs and JPMorgan Chase relied on billions of dollars in public funding to stay afloat after causing a global economic near-collapse, then turned around the next year to report massive profits and once again award exorbitant bonuses to their well-heeled employees. In each case, there is something deeply unsatisfying about how the market handles the destructive behavior of powerful economic actors.

It is not a new idea to suggest that the true costs inherent in many economic pursuits have been unfairly socialized. Nor does this notion apply only in moments of crisis. Economists give the name "externalities" to costs associated with a business that are not reflected on the balance sheet of that enterprise or in the prices of its products, but rather are borne by society at large. For example, if a factory can dump its waste in a local river and is never fined, it has successfully externalized the cost of waste disposal, which the public pays for in the form of polluted water and its consequences.

Oil has many externalities, and the BP disaster has been only the most recent trigger -- "the reminder we didn't need," as Carter Dougherty at BNet put it -- for refreshed awareness that the gas we buy is far more expensive to our country than what any of us pay at the pump.

Gas Is Really Costing Us About $15 a Gallon

Of course, there are so many costs, from national security, the costs of two wars, climate change, pollution, you name it.  But that we continue to subsidize these costs, that we continue to reward the artificially low costs, keep people on this cheap energy rather than investing in alternatives, such as tax incentives for plug in cars, etc.  (Yes, I know those have issues as well, but with solar panels on your house and tax incentives for that as well, it diminishes, it's a start people).

But we just keep digging this whole, pushing the limits since peak oil means that what is left in the ground is going to be harder to get to, more expensive and more environmentally detrimental.  

Mark Engler continues with this exact point, it's important, we have to push for change because of this... (it's a very long article, so I am taking more than three paragraphs and feel it is more than appropriate as fair use, it is six pages long).

That Which Makes Life Worthwhile

To the extent that energy corporations are made to spend more to do business in the future -- forced, for example, to pay for mandatory safety measures, pricier insurance policies, or taxes from which they were previously exempt -- some of the costs of oil could be "internalized." If enough costs were accounted for, some companies, no longer confident that their efforts would be profitable, might begin to reconsider exploiting harder-to-extract reserves of fossil fuels. A recent article in the British Guardian offered this scenario: "If the billions of dollars of annual subsidies and the many tax breaks the industry gets were withdrawn, and the cost of protecting oil companies in developing countries were added, then most of the world's oil would almost certainly be left in the ground."

Unfortunately, this is surely an overstatement. If the exploits of oil companies were made more costly, these companies would simply raise their prices and pass along the costs to consumers. And we would pay them because we are unwilling to give up the speed and convenience of driving, or the luxury of airline travel. We would pay them because we are unwilling to reduce our consumption of foods shipped to our grocery stores from far away, or diminish our energy consumption in many other ways. We would pay them in order to maintain at least a facsimile of our previous lives.

Or would we?

While it is too much to say that "most of the world's oil" would be abandoned, some might be. In 2008, when gas prices soared above $4 per gallon, Americans did behave differently. As the New York Times reported, we drove 10 billion fewer miles per month than the year before; surprising numbers of SUV owners traded in their vehicles for smaller, more efficient cars; and daily oil consumption was lowered by 900,000 barrels. Investors began to reconsider how "realistic" the costs of developing alternative energies might be and to fund them more seriously. In other words, Americans responded to the market.

Gas Is Really Costing Us About $15 a Gallon

So, you see, keeping the prices artificially low actually helps keep alternatives at bay.  The summer of 2008 showed that people would not actually pay more and they would change their habits.  Shift where we put some of that money, give people alternatives and maybe we could actually see some change.  It's not at all impossible.

Originally posted to Ellinorianne on Tue Aug 17, 2010 at 09:21 PM PDT.

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