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$20 Per Gallon Gasoline – The World Becomes Round, Again

$20 Per Gallon Gasoline – The World Becomes Round, Again

I just got through listening to Chris Steiner, staff writer for Forbes Magazine, discuss his new book on the above subject. Unlike the doom and gloom crowd, Chris asserts that there will be a number of positive outcomes when gasoline prices escalate.

Certainly a number of sectors of the economy will be seriously hurt or outright euthanized when energy in the form of cheap oil goes away. Exurbs built on the ability to cheaply commute 100 miles each day will be under severe stress. Ultimately folks who want to live in these places are going to either telecommute, work locally or move back to the urban core. Airlines, already on the ropes, will be further consolidated as prices of transcontinental tickets escalate beyond reach of the middle class.

On the flip side, as city cores repopulate a vast amount of business opportunities will arise for suppliers of all types. Real estate values in these areas will no doubt go up creating personal wealth for anyone owning property, new forms urbanism will evolve to suit the needs of the erstwhile country dwellers and perhaps even a new urban aesthetic will emerge.

Because fuel is currently cheap, we are able to import food from all over the globe, often at the expense of local producers who can’t compete with low wage suppliers on the other side of the planet. When the delivery cost of produce is rescaled to reflect the new reality, apples imported from South America are no longer cheaper than those from Washington state.

And for those of you who have always realized that the cost to transport goods and people on trains is far lower per ton-mile than any other form of drayage, you are about to be vindicated. Rails of all types will undergo a radical rebirth as inter-city transport goes to high-speed rail networks.

Someone noted that all forms of technology are disruptive. As we convert away from a petroleum economy gigantic opportunities are going to be produced all up and down the ladder. The trick is to find out where the growth is and go with it.

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