(Original post available here)

While I don’t often watch news on the television, last night I happened to catch a story about how prices had skyrocketed across the area. People seem to be taking it pretty hard, and the question of “what are we gonna do” was getting asked quite a bit. Of course, I think the answer to this will be different for everybody.

I know that for many people one way of dealing with high fuel prices is by driving less this holiday weekend. In fact a common theme among the many news stories about this topic was the fact that people were planning on not traveling as much. Wow … big surprise there.

But that’s just one weekend. High gas prices aren’t going to be getting lower any time soon. Gas will most likely stay at or above $4/gallon for a while, and the longer it stays there the more likely it is people will find ways of dealing with it.

My theory is that most people will come to terms with high gas prices in one of three ways:

1. No change in driving habits – These are the people that you’ll see quoted in the news saying things like “gas prices are so high I can’t afford to xyz …” This is not to say that everyone in this category will whine about it. Some will simply be financially able to spend more on fuel without too much personal suffering. The increase in fuel expenditures for people in this category will come out of other areas of their budget, either intentionally or not. They’ll keep on driving their big, inefficient cars/trucks/SUVs the same way and the same amount they did before, they’ll just pay a lot more to do so.
2. Minor changes - These are the folks who will be skipping out on major holiday travels this coming weekend because of gas prices. They recognize that at some point continuing to live as if gas is as cheap as it was 5 years ago is no longer possible. They may start to carpool (or do so more often) and may even go so far as to really think about how often they need to drive to the other side of town and plan their in-town trips with efficiency in mind.
3. Major changes – And finally there are those who will see the $4 mark as the sign to start taking drastic measures. These people will consider (and in some cases enact) major life changes to cope. Things like buying a more fuel efficient vehicle, walking or biking to work, or even changing jobs or housing to cut down on driving. Of course, some of these changes will be more effective than others in the grand scheme of things, but effectiveness is not what will land people in this category. What will is the willingness to make such big changes.

Part of the reality of our current fuel prices is that they are still much lower than most other developed nations. France, Germany, the United Kingdom, and Italy all had average gas prices of $5.50/gallon or greater as of March 2005, when the U.S. was still paying less than $3/gallon on average. The rest of the world has been dealing with this for a lot longer than we have, so maybe we should start looking at how they have dealt with it:

• Smaller cars – While U.S. automakers shrunk many cars during the last gas crisis, and many have continued to make compact and subcompacts, large cars, trucks, and SUVs are still commonplace on our streets and in our driveways. Anyone who has travelled outside of the U.S. can tell you that cars aren’t so large everywhere else. I am reminded of my recent trip to Brazil, where cars such as my own Volkswagen Passat seemed like land yachts compared to most other vehicles on the street. In fact, most automakers build and sell many smaller, more efficient models that they do not make available in the U.S. due to a perceived lack of demand. This does seem to be changing some, as Ford prepares to bring back the Fiesta (which never went away overseas) and other automakers start to introduce their pint-sized models to the U.S. market.
• Less cars - Another common trait of cities elsewhere in the world is streets full of bikes. When gas is so expensive that people cannot drive cars they rely on alternate means of transportation. For some this means bicycles. For others this may mean motorcycles or scooters. When I was in Italy 10 years ago I was amazed at all the little scooters people were riding around. I had never seen such things growing up in the States. However, similar scooters are now commonplace even in Richmond, IN. These times, they are ‘a changing.

So where do you find yourself fitting into all of this? What is your answer to “what are we gonna do?” I find myself falling somewhere between minor and major changes. If I’m honest with myself (and with you all) then it’s probably more towards the minor side. I do ride my bike around town and put a lot of thought into when I’m going to drive my car across town and what I’m going to do once I’m there. I’m planning on getting a newer, more efficient car, but that’s more because my old one is falling apart than because I want something more efficient. I will admit that fuel prices played a part in how far away I was willing to consider driving for work post-graduation. Thankfully it now seems I won’t have to drive very far at all. But that’s another post.

So let’s hear it … what are you gonna do???