The “Break it Down” Blog

Well the poll results are in and it looks like most of you think gas is going to go to $5/gal and a good majority also think it will hit $6/gal this summer. If that is the case… holy shit.

Gas is already at $4/gal or higher in certain parts of the country (and a fuck-ton higher in other parts of the world), with big cities in California and Illinois pretty much steady at $4/gal and we aren’t even into the insane heat of summer yet.

It looks like my estimation, back when gas was $3.15/gal that not only will it hit $4/gal, it’s going to blow past it, and we will likely see $4.50/gal in the middle of this summer.

I personally think that $7/gal and higher is the “oh shit” point… the point where everyone starts physically changing life-habits, where they live, where they work, how they commute, etc. just to combat it. At 2/3/$4/gal and even $5/gal I think there is still enough disposable income or need for convenience in most families that this won’t cause them to actually change major habits… but when you start hitting the $6 and $7/gal mark, you are talking hundreds of dollars a month more. Let’s look at an example:

If you look at the typical family, most will have a large SUV and a regular sedan. To get a good mix of numbers, consider the following scenario where we use a pretty typical SUV (Chevy Suburban) and a pretty typical sedan (Toyota Camry). We will be pretty generous here with fill ups, and mixing an American car with a foreign car to get a better average of gas costs. I’m also using cars from 2006 as most people have a 1-4 year old car, not everyone is tossing their cars after a year:

• 2006 Chevy Suburban 1500 2WD (~34 gallon tank) - 14 mpg
• 2006 Toyota Camry 4-cylinder, AT (18.5 gallon tank) - 25 mpg

So assume for most normal drivers you fill up once every 2 weeks and you don’t drive your car to bone-dry, so let’s assume there is 2 gallons of gas left in the tank when you fill up, that comes out to:

• Chevy - 32 gallons x $4/gal = $128
• Toyota - 16.5 gallons x $4/gal = $66
• Monthly: (128 + 66) * 2 = $388/mo

The real shitter is if you consider the cost of gas a few years ago, it would have cost you almost exactly half as much to drive those two cars (zFacts):

So gas has gone from being a “minor inconvenience” to a “major financial concern” - I know some families where the parents commute 45+ mins to work or drive around a lot for a living are approaching $1000/mo in fuel charges. That’s gotten to the point where you are spending half or a third of what you make just on fuel, something that may invalidate your job completely.

While the price of fuel is rising to a ridiculous level, the one shining grace is that it is forcing people to demand more of our technology. Forcing us to demand more from car manufacturers, technology companies, wasteful companies that don’t have more “green” processes and I think it’s also make people more aware of their general health.

Overall I think the “hay day of cheap oil” being over is a blessing for us all. I think the increase in transportation technologies will take us into a new era of invention, technology, conveniences and awareness. Here’s a brighter future… even if it’s a little rocky on our way there right now.

P.S.> One kicker I couldn’t believe while researching for this story was the cost of gas in Alaska… you know, the place that we have mauled just to get more fuel for the US. Apparently they are paying like $4.12/gal up there… why?!