$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline will Change Our Lives for the Better — Christopher Steiner

One major problem of $20 Per Gallon isn’t just the book itself, but its ancestors. Christopher Steiner argues that a) oil prices will rise like an Atlas rocket and b) that such a rise will result in people flocking to dense, urban cities, the return of manufacturing to the United States, and a host of cultural changes. But neither proposition is as certain as he implies, and Steiner comes from a long line of environmental doom-sayers. Books like Paul R. Ehrlich’s The Population Bomb—a best-seller in the 1970s—make Malthusian arguments that have proven wrong over the last 40 years. They predicted catastrophe, not iPods and the Internet.

Still, just because someone was incorrect about a past prediction doesn’t mean that a current prediction will be wrong; there’s probably a name for this kind of bias beyond “boy-who-cried-wolf-syndrome.” But the argument that $20 Per Gallon might be wrong goes deeper, as shown in Tad Friend’s “Plugged In: Is the electric car the future?” from this week’s New Yorker. Friend’s answer is “maybe,” which isn’t much of a surprise given the technological, infrastructure, and economic challenges surrounding electric vehicles. But if oil prices spike high enough, the switch might be painful and rapid—which could drive oil prices back down as demand drops. We saw something similar happen in the summer of 2008, when oil usage plummeted in response to higher prices. And judging by the amount of investment going into electric and hybrid vehicles, it’s not impossible imagine that climbing oil prices will lead people beyond those who want to show their environmental conscientiousness to buy them, resulting in exurban sprawl and a lifestyle not so different for most people, rather than the wholesale urban changes Steiner predicts.

Predictions about the end of the world or drastic changes to it have been so popular that Simon Pearson even wrote A Brief History of the End of the World: Apocalyptic Beliefs from Revelation to UFO Cults, which covers the history of people who predict the end of the world, or at least civilization (so far, their track record isn’t so hot, but many post-apocalyptic novels are fun to read). Steiner is more upbeat, seeing higher gas prices improving the world, and that part is refreshing and makes his work different from someone like Ehrlich’s.

Still, oil prices might not climb all that high in the immediate future. Although Steiner says “We have hit what’s popularly known as peak oil, meaning that global production of crude is at a zenith that will never again be realized,” Friend says, “It troubles [Elon] Musk [founder of Tesla Motors] that while few people know that the world’s oil supply could plateau by 2020 and run out as early as 2050, nearly everyone knows that electric cars suck.” Given the two sources, I would tend to trust the New Yorker’s famously fastidious fact-checkers over Steiner. Still, the Wall Street Journal reports today that Oil Prices Hit 2009 High. Based on this flurry of recent news, is Steiner more right or wrong? It depends on what happens to the market. People who think they know what will happen and bet accordingly will win or lose big. Some will presumably end up demonstrably wrong, like Ehrlich. Steiner cites an airline consultant who says “oil […] is bound to reach [eight dollars per gallon] within three or four years.” I wonder if someone will remember to call him on it then.

So the obviousness that Steiner argues just isn’t there. I’ve come to that conclusion in part because the book doesn’t break new ground or bring enough existing information together to make a compelling and new argument. If you’re familiar with the work of economist Edward Glaeser or writer Richard Florida, both of whom have often been cited in The Atlantic, you know where Steiner’s coming from. Florida even writes for the magazine, while Glaeser contributes to the New York Times’ Economix blog. Too much of $20 Per Gallon is going to be redundant or superfluous for anyone familiar with Glaeser and Florida’s work. To be worthwhile, a book needs to have such depth and such a strong animating idea that it must have hundreds of pages to flesh out its major ideas. Lately I’ve criticized a number of nonfiction books for that failing that test, including Rapt, America’s War on Sex, and The Secret Currency of Love.

In $20 Per Gallon, there’s also a troublesome undercurrent of snobbery that runs through, and a sense that Steiner looks down on the proles who like kitsch and SUVs for reasons other than economics, but those views are cloaked in economic arguments. In an aesthetic sense I’m more or less with Steiner, but he makes poorly supported arguments like this one:

According to some of American automakers’ own market researchers, the type of people who tend to buy SUVs are insecure and vain. They’re people who frequently are nervous about their marriages and uncomfortable about having become parents. They have little confidence in their skills as drivers.

The source for this? Two writers who also have a strong enough point of view to make me doubt their own research: Brian Hicks and Chris Nelder, who wrote Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. As I tell freshmen: you have to go back and find the primary research material if you’re going to cite extravagant or unusual claims. I want to believe Steiner’s argument about people who drive SUVs in part because I don’t, and his argument flatters my own prejudices, which is nice. But the analytic side of my mind doesn’t buy it. He also says that the vast McMansions that were in vogue until February 2009 “will be an entrapment, an entrapment to giant utility bills and the attachment to a dwelling unit that will, with time, become a kind of pariah.” His financial argument is probably sound: spending vast quantities of money on a signaling device like a distant house isn’t playing smart financial defense. I don’t want to live in one. But because of the hybrid and electric car argument above, Steiner might be wrong on the basic affordability of McMansions, even if he remains right in his unstated view that they’re gaudy, ugly, and likely to fall apart.

The basic problem with $20 Per Gallon is that if you’ve read this post and followed most of the links, you now know more about the issue that the book describes than the book itself tells you. Someone would probably be better off subscribing to The Atlantic and The New Yorker than they would reading $20 Per Gallon, since those magazines do a better job of dealing with issues surrounding oil prices and their consequences than Steiner does here. A lot of that work is online. Go find it there. Once you have a map to finding it, you don’t Steiner to do the work for you.

3 responses

  1. So much more is tied to oil than just U.S. automobiles. Here’s a very short list: (1) automobiles over *the rest of the world*, where China are India are growing very rapidly, and show no signs of moving to electric; (2) jet fuel for airplanes the world over (I don’t think we’re ever going to see electric airplanes); (3) trains the world over (not all use diesel, but many do); (4) cargo ship fuel, again, the world over; (5) enormous quantities of fertilizers used in agribusiness, not to mention the systems that artificially irrigate our growing regions way beyond their normal carrying capacity; (6) electrical generation (oil is only one part of our generation paradigm, but one can’t ignore it); (7) the ubiquitous plastics we all take for granted are petroleum-based, too.

    Even if we can (as we most certainly should) decrease our own consumption of oil here in the United States — both with alternatively-powered cars and renewable electricity generation (so far as we’re able) — the price of oil will continue to rise. This is inevitable, both because of peak oil, and because the price is set in a *global* market. Any short-term drop in price that comes about because of changes in U.S. demand will probably be more than made up for in the years following by growth in demand elsewhere. This is especially because a big drop in price will encourage other countries to buy into oil in a big way (in fact, it will test America’s resolve to quit the habit for good). We will not be able to absolutely eliminate our need for oil, and as the price skyrockets through scarcity and the ensuing global market pressures, things are likely to become very uncomfortable at some point on all the industries still tied to it. Global resource wars are one plausible outcome.

    For now, *at the Hubbert peak*, there is more oil available worldwide than ever before (and than will ever be again). The price is likely to be volatile for a few years, because at the peak of supply, the impact of changes in *demand* is maximized. But this will probably not last more than a few years. Eventually, once supply becomes severely restricted (while growth continues unabated), the impact of demand becomes negligible; at that point, *supply* will begin to drive the price completely.

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  2. Let me clarify: I meant to say that increases in price are inevitable; I wasn’t predicting any particular number, $20/gallon of gas or otherwise. But it probably will happen, unless we transition the bulk of our national automobile fleet off of gasoline before it can. Prices have already passed $10/gallon in Europe (but have retreated because of the recession). Regarding Mr. Lynch, let me spotlight the fact that he in an energy industry consultant. As such, he is hardly impartial. T. Boone Pickens is not impartial either, but plenty of others are. I found Mr. Lynch’s article facile, poorly argued, dismissive without cause. Basically, exactly what it was: an op-ed by an industry shill. Why should he call renewable energy “harebrained schemes”?

    The bottom line is that we don’t know precisely when peak oil will occur, but it most *definitely* will (if we are not already there, as the data suggests). In fact, by definition, it *must*. Oil is a finite resource; however many trillions of gallons there might be, that is *all there is*. And global consumption (already in the neighborhood of 30 billion barrels/year) continues to increase. In the last few years, global consumption has come to within two million barrels/day of production, and that gap has been steadily narrowing. That is a recipe for eventual scarcity. How not? It is not at all harebrained to prefer the idea of using renewable energies such as solar, wind, and water to burning through resources which, once used, are gone for good (and terrible for the environment). How so?

    If you care to, read James Howard Kunstler’s The Long Emergency. It’s not a “die off” manifesto, but a carefully argued look at what we know and what is likely (though perhaps not guaranteed) to occur as a result.

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  3. Pingback: Links: Liu Cixin’s SF trilogy, cops, Trump country explanations, Nell Zink, Internet culture, and more « The Story's Story

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