# Why You Should Smile at Higher Gas Prices

## By Mr. Money Mustache

## Thu, 16 Jun 2011 14:20:08 +0000

There are lots of amusing stories in the news these days, as there always are when gas prices are rising. They often feature quotes like this, “I’ve got a 65-mile commute each way and these prices are making it impossible to put food on my table for my two kids!”, said Irene Smith as she finished pumping $134.00 of regular unleaded into the tank of her Chevrolet Avalanche.

Gasoline and other fuels have been so cheap for so long that most US residents have built their entire lives with no consideration for energy use at all.

- Got a job offer from a company 50 miles away? Take the job! That’s less than an hour commute at 75 MPH!
- Want your kids to go to the fancy charter school across town? Easy! It’s only 3 miles each way! (4 times a day, 200 days per year).
- Running out of eggs for the recipe you’re working on? Beh! Just grab the car keys and take the Minivan down to Safeway!
- Got a plumbing business and need to carry around a few wrenches and plastic pipes? Grab the V-8 powered Ford Econoline!
- Starting high-school and want to impress the rest of the football team? Try a full-size pickup truck!!

As a result of this completely casual attitude towards driving, American drivers average about 13,500 miles per year. PER DRIVER! Multiplied by the US fleetwide average fuel economy of about 26 MPG for passenger vehicles and with gas at $3.75/gallon, we have about $2000 going up in smoke each year, or $4000 for a family or 2-car couple. And gas represents only about a quarter of actual car operation costs, meaning closer to $16,000 per year of total vehicle expenses per family.

It is of course frustrating to feel trapped with a massive expense that suddenly rises. But the reason we should all want these prices to go up is to wake everyone up and stop the insanity. If we could get the car lover crowd to understand these four points, we would be set:

- Cheap oil has CAUSED the country to be designed in a gas-wasting manner. Hell, it’s almost rational to live the way we do if gas were free and if there were no environmental consequences to burning it!
- The price of oil is going to go crazy occasionally, because of annoying hedge-fund speculators in the short-term, and because of a general shortage in the long run (world oil use is growing faster than production so there is not much safety margin left).
- Your gas pump price is based on the worldwide price of oil. Since we don’t have much of the oil reserves, we can’t influence that price much no matter how many wells we drill in our oceans and wildlife areas.
- Even if we COULD drop the price for a while with extreme oil drilling, we’d just be back at #1 – creating even more inefficient suburbs and cars to ensure a greater price spike once we are even more hooked.

If the price could stay high for a while though, our amazing industrial society would automatically adjust in the name of profit:

- more efficient cars would come to North America, as they already are in Europe (50 MPG diesels, plug-in hybrids and pure electric cars, no more SUVs and pickups)
- cities would fill in more efficiently, making it easier for people to bike and walk, and even public transit would work better because of more compact cities and higher ridership
- food that uses a lot of fuel to produce and ship would rise in price more than efficient foods – people would switch to buying the less energy-intensive food
- people would insulate their houses and builders would start taking advantage of free heat from South-facing windows, etc.
- Transport trucks would adopt aerodynamic modifications and drive more slowly – saving fuel and creating more payable hours for drivers
- world oil use would drop significantly, causing a lower equilibrium price – reducing the profits sent to oil-exporting countries, and keeping them for ourselves!

Overall, we’d use a lot less fuel, and find ourselves stuck in traffic less often. Less driving would mean lower road expenditures for governments and thus lower taxes. But we’d still be spending more on our lifestyle overall, which sucks because the beneficiary of our extra spending would be oil-exporting countries. The only escape would be through less driving, owning a better car, and more biking.. things that aspiring Mustachians are already doing more each day.

But what if there were a way to create all the benefits of the higher fuel prices, without actually increasing your cost of living? What if we could siphon off all the Saudi Arabia money and pump it back into our own economy in the form of lower income taxes, and even better education and healthcare?

Other countries have actually invented a way to do this – are you ready for this? It is called “Taxes on Gasoline”. Yet for some reason, no US politician who suggests this great idea ever gets elected, so they have stopped suggesting it altogether.

I like to repeat these points in my own head when I do need to buy gas for my own car – normally less than once a month but about to become a daily experience during an upcoming cross-country roadtrip to spend the summer in Canada.

Finding a reason to feel good about high gas prices is a pretty neat trick. But if you ever hear a politician proposing that we all pay higher gas taxes permanently – support him!