Customer Reviews

$20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better

5 star:		(38)
4 star:		(3)
3 star:		(11)
2 star:		(6)
1 star:		(8)

 

 

I have spend my last 40 years in the energy business and can tell you that most of Christopher Steiner's predictions are on the money, he readily identified a number of weaknesses and urban myths about the future of energy, nailing the key changes that will occur. In my opinion he is 95% correct, so why only three stars?

He really misses the boat by thinking provincially. This is a book written by an American for Americans and doesn't address how this future affects the rest of the world and America's place in it. He talks about the growth of high speed rail, like has occurred in Europe and Japan. The problem is that the Europeans and Japanese have been investing in infrastructure for future during the last fifty years. America hasn't made ANY of these investments and is nearly bankrupt now, not even being able to afford Social Security, Medicare or any number of other current programs.

The only way that American can afford the more Utopian future that Steiner predicts is by vastly increasing taxes which will stifle industry and move even more businesses abroad. America is at a crossroads that will determine if we will be a third world country with the world's largest military, or if America will adjust to the changing world and be a leader in the new world order. This is something that he glosses over in one paragraph near the end of the book.

The information in this book is important and can provide a road map for the future, but only if readers and the government take it to heart. Unfortunately, through Steiner's provincial outlook the reader is forced to "read between the lines" for the clues that will allow government, businesses and individuals to prosper in the coming storm.

I picked up Steiner's book the other day and began reading through it. I bounced between the chapters for a while, but finally settled in and took my time to pick through his chapters in order. Instead of writing about whether or not I agree with each of his points, I'd like to make a general statement about Steiner's approach with this book.

To begin with, it is too easy and common to capitalize on fear. You can always come up with myriad ways in which something that is happening right now is going to make the future worse. It is easy to write, it is easy to sell, it is easy to gain an audience. In short, it is easy to sell fear. However, what do we really learn from fear? The answer is easy. We learn nothing. It hinders us from making rational and intelligent choices, it keeps us from planning appropriately, and it hinders tolerance and development.

Steiner decided to take the more difficult path with this book and focusses on rational thought for our future as fuel prices continue to rise. Steiner gathered up information, made an informed decision, and presented ideas for discussion. Furthermore, he took a more positive approach with it. That is what really sets this book apart. Instead of looking for an easy fear story to sell, the author points out the benefits.

Steiner did not take the easy route with this book. He went after a difficult topic to open it up for discussion. Whether or not you agree with the author's ideas and conclusions, you will come away from this book thinking more in depth about our fossil fuel usage.

The book's structure - chapters going up with the price of gas - is elegant and clever.

It's a fascinating breakdown of how gas prices affect our world and how, in a world of higher and higher prices, how we'll adjust. The relationship between gas prices and car fatalities - wow. The relationship between gas prices and obesity? That's simply amazing. But when you think about, it makes perfect sense, as the supporting research shows.

There are so many great characters throughout the book, from the farmer in Chapter $16 to the driver of the electric UPS truck in Chapter $10. The commerical carp fishermen have to take the cake, though! I've read about Shai Agassi before, but his mission always amazes me.

I almost think there could have been an additional chapter on the psychology of Americans regarding gas prices. There almost seems to be a sense of entitlement with many people, a sense that they're owed low gas prices and it's the government's job to keep them low. We treat gasoline, for some reason, differently than anything else.

But oil is a wild, wild market. Don't think that because prices are down next week that they'll be down in a year. They could go completely bonkers. And they likely will.

And the New York chapter of this book simply rules. Excellent read.

The peak oil hypothesis may be very real; at the very least, as the author notes, large deposits of easily accessible oil will become harder to find, concurrent with increasing demand from China, India and other parts of the (rapidly) developing world; the combination will clearly lead to higher prices of oil, and therefore gasoline. The format is a novel one: how would life change with each relatively sizeable incremental increase in the average price of fuel at the pump. I'm guessing that the book concept was approved in 1H 2008, and the drop in In the market price of oil (and gasoline) by year end made the release timing somewhat awkward; ah well, the market giveth and the market taketh away.

In the hands of a more objective and rigorous writer, this could have been a very useful book; even as it stands, it provides some interesting insights (or at least stimulates thinking). Unfortunately, there are a few flaws that made me regularly roll my eyes, and ultimately discount the book's value:

First, for the sake of dramatic impact, the author assumes that the price of gasoline will increase in a matter of months to his initial target range - he's found an equity analyst or university professor who says that gas will reach $10 in the next year or two; he ignores the dozens of others who would disagree (a recurring theme), and even that one probably wishes he could take back his mid-08 quote 6 months later. While oil (and gas) prices are set at the margin and therefore volatile, this is likely to be a years- or decades-long process.

Second, the cure for high prices, as the saying goes, is high prices. The author gives little credit to human ingenuity and willingness to change consumption patterns. He notes that diesel use will go up, and that electric car use will come into vogue, but discounts the impact of those (and numerous other) initiatives on the ability to continue to drive, i.e. substitution effects. If gas prices really do ratchet as high as $6 in the next couple of years, the vehicle fleet will shift fairly rapidly in composition. As the author notes, Ford already sells 60-70 mpg vehicles in Europe (as do other automakers), and the only thing keeping those away from our shores is market demand. People aren't stupid, they'll adjust. By the time gas reaches $20/gallon, if it ever does, many adjustments will be made without completely changing the American lifestyle. The author repeatedly says that people won't buy electric cars in any numbers at $25k and above. I'm guessing that he's a) an urban dweller, and b) not all that well paid as a scribe at Forbes, and therefore c) hasn't shopped for a car in a while - what does he think the average car costs today?

Similarly, US consumers can weather higher gas prices much more easily than the new consumers in India and China due to income. If prices rise as much as he expects, demand will drop considerably in those emerging markets. The Chinese and Indian economies have lived without cars for a long time; the growth in demand in those countries will flatten or reverse fairly quickly if the author's scenario(s) prove out, reducing the price (or at least the pace of price increases) to US and European consumers.

Third, the book is largely anecdotal rather than analytical. It makes it an easy and engaging read, but doesn't do much to make the author's case. Remind me again why WalMart will be eliminated at $14 (or was it $12) but not at $8 or $16? He had a number of points to make, and seemingly spread them among random chapters.

Finally, there's an overriding sense of self-righteous, vindictive contempt for the way Americans choose to live their lives today that comes through consistently (especially in the chapter on the "Death of WalMart"). The author believes we should all live in walkable, mixed use urban centers or main-street focused small towns; he yearns for an idyllic past that never existed, and which suburbanites and exurbanites left because they wanted to. I hate to throw out the overused cliche "urban elites", but he's pretty clearly a member, and he can barely disguise his glee that the suburbs and big box stores he despises will be eliminated in a cleansing fire of high gasoline prices. The standard suburban American lifestyle that he hates so much, along with the globalization that makes it possible, are likely to prove more resilient than the author thinks. Sorry, WalMart (and Costco) aren't going away. Deal with it.

In summary, if this really were an objective scenario review it would be much more valuable than it is. As it stands, it's an ideological polemic screed that gives more insight into the author's belief system than it does into possible future outcomes. Too bad, the idea had some potential.

With global economies predicated on the ready availability and low cost of the frequently volatile commodity of oil it's a wonder policy makers pay so little attention to addressing the issue. "$20 Per Gallon" seeks to get readers to thinking about the volatility of oil prices and what those increases mean to them in the macroeconomic sense. But rather than being a dryly written treatise of interest only to economists Steiner takes a unique approach that makes the consequences of higher gas prices quite clear to readers: each chapter is broken out by the price of a gallon of gas and lays out the consequences of what that means to individual consumers and the broader economy. As a senior editor at Forbes magazine Steiner is used to making economics comprehensible to lay people and he does so here to a devastating effect with writing that is crisp, clear and cogent. A great example is when gas hits $6 per gallon. At that point Steiner posits that consumers will make a permanent shift away from SUVs and much of our current commuter culture will start to buckle as parents no longer are willing or able to shuttle children to an endless round of athletic events and practices, tutoring, and the like. Exurban areas will start to see a loss of population back to city cores that will only accelerate when the prices continue further upwards. By the time you reach $12 per gallon the sustainability of our "just-in-time" method of stocking retail and factories is unsustainable. Big box retailers will have to rethink how to do business. Suburbanites will have to rethink living away from their jobs. But there are many other less obvious areas of our economy that would be affected by such an increase that Steiner points out.

At times it is tempting to think of Steiner as Robert Malthus reborn, and "$20 Per Gallon" at times has a ring of prior authors who predicted doom such as "The Population Explosion" back in the 1960s. But in that case the Green Revolution in agriculture staved off disaster. Given the volatility in oil prices it's hard to expect a time where $12 per gallon would be a condition of stasis but certainly not out of the question. The supply shocks of the 1970s were short living and produced some beneficial changes to individual economies, but the supply shortage following Hurricane Katrina in 2005 pointed out how vulnerable supplies can be and the harm that came as a result. The global economic slowdown kept prices low but an economic recovery may quickly snuff out that upturn if oil prices spike too high too quickly. What Steiner hopes to prompt is spurring federal officials, policy makers, business leaders and political economics to take action to avert potential problems before they arise. The same applies to consumers in their everyday lives as a spike in oil prices certainly jeopardizes the foundation of the economy and society we enjoy.

"$20 Per Gallon" is certainly a provocative book and it is intended to be so. Steiner's point is to spur debate over how to prepare for increased price volatility on this essential resource so that we can be proactive rather than reactive. But it's not all Malthusian doom and gloom as Steiner points out potential benefits and bright spots that will help mitigate the more serious consequences of higher gas prices. While not the "feel good" book of the year it's essential reading nonetheless!

This was a page-turner of a non-fiction book. It's a future peek into what the United States will be like when the price of oil reaches certain levels, which for the purposes of this book were $6, 8, 10, 12, 14, 16, 18, and 20 dollars per gallon. The unavoidable skyrocketing price of oil worldwide, which is used to construct much of the American Dream (the author does as excellent job of identifying all the products we use daily that are made from oil, but which people don't realize are oil byproducts) will force major lifestyle changes on the average American whether they like it or not. The rest of the world will demand more of the world's oil supply for their version of tiny, boxy, stripped down to absolute necessities, golf cart-like Nano cars that would never pass American Auto Safety Standards.
It's a bleak future world in many ways, but the author points out that life will probably be healthier and better once the damage done by the invention of the automobile and unsustainable "cheap oil capitalism" is corrected by economic laws of supply and demand. (This previous statement tips off the reader to a likely bias by the author against both cars and capitalism). For those three or four car families living in the outer suburbs or even farther away from cities, the future shock won't be pleasant or easy. The recent $4 dollar a gallon gasoline prices gave a hint of what will happen in the near future. One of the flaws I think I found in the author's arguments was his theory that the price of oil will reach $6 per gallon during 2010. He quotes one expert, "Jeffrey Rubin, a respected economist and the chief strategist and managing director of CIBC world markets who says gasoline will likely cost $7 a gallon by 2010." I felt that Mr. Steiner and Mr. Rubin were under estimating the amount of time it would take for the American Economy to recover from the current recession. Without a normal recovery, I personally don't feel we will experience $6 or $7 a gallon gasoline for a least six years when it's estimated that United States employment will again reach the 2008 levels. The current actions of the federal administration practically guarantees a jobless recovery, rising interest rates to pay for all the government borrowing and a western European Socialist Government's normal unemployment rate of about 16 percent. Obama is steering the USA full speed ahead toward a return of the Jimmy Carter Era of high taxes and stagflation. Here come the 12% inflation rate and 21% mortgage rates again.
The oil price might indeed reach $6 or $7 per gallon in 2010 if desperate state, county and federal governments decide to raise the gasoline taxes or pass the Tax and Cap Bill that will cause the price of all energy to double. All governments in the US are going to need to increase their taxes to make up for the loss of income taxes from the continuing, seemingly endless high unemployment rate. As people use less gasoline, the taxes on
that commodity will need to increase to fill the government's needs. Using less gasoline will mean higher taxes on what is used. It's a classic vicious economic cycle.
Here is a list of most of the chapter titles in this "future shock" volume. "Society Change and the Dead SUV, The Skies Will Be Empty, The Car Diminished but Reborn, Urban Revolution and Suburban Decay, The Fate of Small Towns, U.S. Manufacturing Renaissance, and Our Material World, The Food Web Deconstructed, Renaissance of the Rails, and The Future of Energy."
After the widespread pain to the publc, the nation will probably be better off but much less mobile. Flying in planes will be only for the rich, more than one car per family will be unusual, large cars will be practically extinct except for those in the government service, small houses, apartments and townhouses will be the norm, the outer suburbs and malls (ghost boxes is the nickname for abandoned Wal-Mart Stores) will be ghost box towns crumbling into dust. Those people who live far from their employment will find their homes steadily going down in value only this time, the prices will never recover because of the constantly rising costs of getting to and from them and of heating and cooling them once there.
Increased subways and train routes will be welcomed, demanded by the public and many highways will be used or divided to create beds and easements for new railroad lines.
This is a well-written, easy to read, thought provoking, maybe too optimistic preview of the abandonment of the American Dream, the death of the love affair with the car and most other materialistic desires allowed to grow because of "cheap oil capitalism." And unlike Europe with its $6 per gallon gasoline now (most of which is government taxes used to support its socialistic policies), it will take decades to develop and build the mass transit systems to replace the automobile society in America. The average American will have his wings clipped and find his freedom to travel severely limited by rising fuel costs. It will be a tough time for average Americans.
Whether or not you agree with everything in the book the reader will still find the book very thought provoking. If nothing else, it should make people start to think about living in places with good mass transit, food stores and other consumer services located within walking distance and definitely living closer to one's job and schools. I loved the section on "The Skies Will Be Empty." Using the experiences of an ex-commercial pilot "used airliner dealer" or the owner of a "bone yard" or desert "plane graveyard" as most people know these used planes and parts parking lots, the author explains in a fascinating and easy to comprehend way how bad things really are with the Commercial Airline Industry.
All, or most of these predictions will come true in the future: it's only a matter of when? The changes will be forced upon all of us by simple economics, energy needs and higher taxes on everything we need to survive. As a real estate broker I wouldn't want to overpay for a rural country or summer home. The market for hard-to-reach homes will be dead, dead, dead. This book is well worth the time it takes to read. All or most of this future is heading towards the United States like a giant, unstoppable tidal wave.
Excellent, calorie-free food for thought!

With a title like "$20 Per Gallon," how could anyone not want to pick up this book just out of curiosity? The price of gasoline affects us very much. The author says that besides the cost to fill up our tanks, the price of gasoline affects other things such the plastic in our refrigerator, the asphalt on our roads, and the shingles on our roofs. As the price of gasoline increases, so do the costs of these items.

The author argues that the price of gasoline will only increase in the future compared to where the prices are right now. His reasoning is based on the following facts:

1. The demand for oil will gradually increase and will continue to increase as the global middle class expands.
2. The oil that remains in the earth will be more and more expensive to locate and extract.

Besides supporting the author's prediction, he also explains to readers how this increase in gasoline prices will affect their lives in a big way. If you are curious about how your life might change in the future as a result of gasoline prices, you will enjoy this book.

- Mariusz Skonieczny, author of Why Are We So Clueless about the Stock Market? Learn how to invest your money, how to pick stocks, and how to make money in the stock market

An excellent, easy read despite very complex issues. It says our lives will change. Our children's lives will really change and like our farmer grandparents don't recognize our world, neither will we believe the one our grandchildren will reside. This book shows the future, and it's something Americans can't stop. But, the book shows how we can turn these massive changes to our advantage.

I thought this was a great book, even in the parts I disagreed with. It made me rethink a lot of things. For example, as oil prices go up, so does the price of asphalt. It's not just a matter of trying to get more miles per gallon. The highway system will become more expensive to maintain.

The main thing I disagreed with was the part about container shipping (which is a business I work in). Container shipping will stay around because it is the cheapest way to move goods in bulk. It IS energy-efficient. The ships and ports can be made more energy-efficient over time. Steiner does not exactly say this is not so but glosses over it. If you ordered something from Amazon that is made in China (not this book but perhaps some toy) and had it express-shipped to you, the energy costs of getting it from the container port to Amazon's warehouse to your house will be more than the cost of getting it across the Pacific Ocean in a container ship.

I typically don't read non-fiction in the summer but I grabbed this off my husband's night table and it turned out to be a great read. The topic, while quite serious, is handled so engagingly and I loved the way the book was organized with each succeeding chapter analyzing yet another incremental increase at the pump. It's truly a general interest read, not just for those interested in energy or economic issues. The author shows how oil consumption is so profoundly at the core of our society and economy, but in the manner of great explanatory journalism: through telling examples, deep research, and smooth writing.

I've read other "what if" scenario books and uniformly they seem to take a negative "scare the heck out of the reader" point of view. This one is completely different. Sure, there will be problems associated with the rising price of oil, and some painful changes are ahead, but Steiner effectively argues that with this challenge comes a great opportunity and potentially positive long-term impact on U.S. society in particular. Some may disagree with his predictions, but they are thought provoking and eminently discussable. Which is pretty much my definition of an excellent non-fiction read.