High-Priced Gas Is GOOD For America!
How could this possibly be? We rely on gas for just about everything in this country – how could high priced gas actually be GOOD for us?
Because without high-priced gas, we’d have no incentive to innovate.
In my article on ‘Who Killed The Electric Car?’ last year, I emphasized the fact that no one wanted an expensive, inconvenient-to-operate electric car while gas was cheap. The economics would never work out, even if electricity was marginally cheaper than gas, because batteries were way too expensive. But it’s safe to say that many foretold the coming of high-priced gas back then. Peak Oil is a concept dating back to the 50s, and those who adhere to its principles saw a drop in petroleum production on the horizon.
So why didn’t we do anything about it? Same reason we don’t do anything about Social Security, widely predicted to collapse in a couple of decades – it’s not a current crisis. We respond to current crises pretty well in this country – we plan for future crises poorly (just ask those living in New Orleans).
America has an interesting national character. In Myers-Briggs terms, nearly three-fourths of us prefer ‘Sensing.’ That means, amongst other things, that we can take change in small, incremental doses, but get highly stressed when transformational change is forced upon us. The change needed to adopt electric cars is dramatic – recharging overnight only gets you a few dozen miles in range, whereas we’re used to fueling up for a 400-mile trip in minutes. Just think of how we’d have to change our daily routines. And to top it off, the cars will be much more expensive up front, offset by lower fuel costs – but the perceptual change is significant.
And there’s another character dimension at work at the same time. Nearly half of us prefer ‘Perceiving,’ and a salient characteristic of that preference is the tendency to get motivated by crisis, or by a deadline. In other words, we know we’ve got to eventually do something about the problem in front of us, but we’re not gonna get really interested in it until it’s REALLY a problem. And the other half who prefer ‘Judging’ tackle the problem head-on, getting things done in a systematic fashion. But if the problem requires drastic change – see previous paragraph.
Are we entering a crisis? We constantly read articles about how even $3.50 gas is cheap relative to Europe and elsewhere. Do you care? Our spending habits, communities, and travel industries are based on the assumption of cheap petroleum products. Would you have bought a home 50 miles away from work if gas was this expensive? Would you have bought an SUV? And what happens when gas climbs to five, six, eight dollars a gallon?
Crises like these spur innovation. Innovation doesn’t occur unless there’s a problem to solve – the messier the problem the more novel the innovation. The higher gas climbs, the more pressure is placed on development of biofuels, solar tech, and high-performance batteries. Development that started when gas started skyrocketing a few years back is bearing fruit. Companies like Nanosolar, Firefly, EESTOR and A123 are making products that will spur a wave of transformational change in the energy and automotive businesses. And this is just the bleeding edge – energy technologies are about to explode across the country. A possible result – forcing electricity into the Long Tail, making it practically free for everyone.
High gas prices create short-term suffering but spur the innovation needed to make the suffering go away.