How we failed to adapt the last time this happened.


Gas prices have reached a absolute record this weekaccording to AAA, and many Americans seem in disbelief.

It has not been it’s long: The last time we had a string of high gas prices was from 2011 to 2014. Admittedly, prices then hit just under $4 a gallon. But corrected for wages or inflation, prices felt even higher then. It was a Major publish during the 2012 presidential campaign. We adapted – fracturing the hell out of the Great Plains and becoming the world’s largest oil producer– and the matter was all but forgotten.

Until now. Boosted by post-pandemic demand and Russia’s invasion of Ukraine, oil prices have gone vertical. Some Democrats want a gas tax holiday; Joe Biden blamed the oil companies for not accepting him on the permits offered to him and on the drilling; Republicans say environmental policy is at fault. Some economists believe that Congress should offer financial guarantees to the hydraulic fracturing industry.

Obviously everyone and their mothers are mad, mad, mad about high gas prices, partly because Americans are now back to drive about as much as them before the pandemic. We don’t go to the office, but we don’t stay home. From Virginia to Colorado, drivers are likely to stop at the pump and be greeted by a Joe Biden stickerpointing to their total: “I DID THIS!”

A look back at 2011 suggests an interesting counterfactual: what if, in the face of these high prices, we had changed the demand side instead? Believe it or not, that’s what some people thought could happen. President Obama used this moment (and the conditions created by the auto bailout) to establish new corporate average fuel economy standards, known as CAFEs, which have set ambitious targets for energy efficiency for car manufacturers. “Slowly but surely, Detroit is shifting its focus from SUVs to cars”, All Things Considered reported in March of this year.

Another artifact of that heady time not too long ago was the widespread feeling that the American city was regaining its long-lost charm, driven by a combination of those high gas prices, low crime rates and generational change. In an iconic Harvard Business Review column, “Celebrating $4 Gaseconomist Matthew Kahn wrote that “some people (especially young people, older households and those working in inner cities) will increasingly live an urban life, occupying high-rise apartment buildings. density close to public transport and walking to shops”.

Of course, the Americans did do not end up driving smaller cars, taking more public transit, live in smaller housesWhere live in more walkable places. In fact, we did the exact opposite.

If any of these things happened, we would be in a much better position to withstand the sticker shock at the pump. This will only get worse in the summer, as road trip season rolls around and more expensive “summer mixes” arrive from refineries. (Yes, there is a winter blend and a summer blend of gasoline, adjusted to evaporate at different temperatures.)

What happened to emissions standards? Automakers complained that flat MPG targets weren’t fair to producers of larger, heavier vehicles. The Obama administration responded with a loophole for vehicles with larger footprints, and automakers drove a giant pickup truck through it. (And then ended to turn entirely against the normsy, arguing that they were still unfair given the bigger cars Americans wanted to buy.) By 2018, Fiat Chrysler, Ford, and GM weren’t just selling fewer sedans, they had stopped making them in the U.S. altogether. !

Some analysts anticipated that this could happen. In 2011, Steven Skerlos, a University of Michigan professor who studied CAFE standards, predicted that the bigger car loophole would produce unintended consequences: “Are cars going to get bigger? Very probably. Will this lead to more pollution? Yes.” As gas prices fell to 15-year lows during the fracking boom, buyers went crazy for SUVs and pickup trucks. In 2018, two out of three new vehicles sold were SUVs or pickup trucks, compared to less than one in two ten years earlier.

This had a number of consequences, such as the death of a ton of pedestrians, but for our purposes the important thing is that it made America much more susceptible to high gas prices than we would have could have been otherwise. According to research from the Paris-based International Energy Agency“a lot of that fuel savings [produced by the CAFE standards] was compensated by the increased weight and power of the vehicle. In the United States, our transition to larger vehicles has negated 40% of the fuel savings achieved as a result of Obama-era CAFE standards. That’s a lot of gas!

Were automakers focusing on their most profitable products or responding to American demands? Both. But forward-looking federal policy — from raising the gas tax when oil prices fell, to discouraging the design of massive new trucks that go 20 miles per gallon — could have nudged buyers of cars in a direction where they would be less troubled by today’s gasoline. prices. (And, as a bonus for the climate, burning less gas.)

The other change on the demand side that would have been useful today was to help people live without cars. Whether a car is a prerequisite for a job, education, or social life is a huge financial burden right off the bat, and that’s especially true when gas gets expensive. US transit ridership has traditionally increased during times of high gas prices and in cities where vehicle traffic has rebounded from pandemic-era lows, but transit ridership has not. , like new yorkresidents can have an easy exit to refuel.

But most people don’t have that option, because politicians have spent the past decade wasting the demand for urban living by refusing to build housing there. Instead, they allowed car-free neighborhoods or car lighting to appreciate as exclusive enclaves as population growth shifted to the suburbs. Some people really wanted that drive-everywhere life, but if real estate prices in walkable US neighborhoods are any guide, many others wish they could leave the car at home once in a while.

The fracking boom has spared us from embracing the lifestyle changes brought on by the latest gas price spike. So now, with gas prices in some states starting to resemble AM ​​radio station frequencies, we’re driving bigger cars and living in places where we need them. These tendencies are difficult to undo overnight. You can see why Biden and the Democrats facing the midterm elections are thinking instead: Cut gas taxes and start drilling.


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