Friday, March 4, 2011

Missing the bus

Countless words can describe the recent uprisings in the Arab world. Historic, exciting, sobering, tragic, triumphant; all are fitting. But, without intending to diminish the cultural and political significance of these events, I must say that another apt term is “expensive.”

Libya may be heading towards a civil war, and although the troubled nation is not a major supplier of oil to the United States, the market uncertainty and attendant speculation has pushed the price of oil back over $100 per barrel. Gasoline is now $3.29 per gallon on average, up from $3.11 only a month ago, and we may see prices hit $4 per gallon if unrest spreads more broadly in the region, according to the New York Times.

A people's right to self-determination should not be denied in the name of cheap gas. But it is important to consider the impact of gas price increases in the context of rural places and their unique vulnerability to high fuel costs: longer commutes, lower incomes, and greater ownership of inefficient vehicles such as trucks and SUVs.

Of course, the solution is simple- rural people can just take the bus to work right? We have all probably heard arguments that Americans need to follow the European model and embrace public transportation. But, as Paul Krugman noted two years ago in an article titled Stranded in Suburbia," public transportation "faces a chicken-and-egg problem: it's hard to justify transit systems unless there's sufficient population density, yet it's hard to persuade people to live in denser neighborhoods unless they come with the advantage of transit access."

If Dr. Krugman is correct, and public transit is hard to justify in suburbia, it must be doubly difficult in rural areas. According to the Federal Highway Administration, some 38 percent of the nation's rural residents live in areas without any public transportation, and less than 10 percent of federal spending for public transportation goes to rural communities. 28 percent of rural counties that do offer public transportation only do so on a limited basis.

Unfortunately, any significant creation or expansion of rural public transportation networks is unlikely. The current House budget bill would cut transit programs by more than $1 billion. The Senate Democrat bill would maintain our current investments in public transport, but eliminates $150 million from a program that funds new transit services. And efforts by individual states to expand programs are probably not forthcoming given their collective budget problems.

As lamentable as this situation is, not everyone is frowning. Exxon Mobil for example recently posted a fourth-quarter earnings surge of 53 percent, which followed earlier reports of "soaring profits by fellow oil giants Chevron and ConocoPhillips," as reported by the Wall Street Journal. Exxon reported $9.25 billion in profits last quarter, a level not seen since the third-quarter of 2008, where profits totaled $14.83 billion.

Seems a little unfair. Is there something we can do? Well, it's too late to emulate Norway, where the government is the majority shareholder in the country's two oil companies (and where, coincidentally, people have the highest living standards in the world), so how about a windfall tax? I realize that would be socialist and all, but can't Big Oil share some of those sweet Libyan uprising profits with the rest of us? I think I even remember a senator from Illinois who promised a windfall tax if he became president. Oh that's right, he changed his mind after he was elected. But Mr. Obama said that was just because prices had returned to below $80 per barrel. So now that they're back up, the President will push for the tax again right? Nope, prices hit $80 per barrel last January and we haven't heard a peep.

So it looks like everything has turned out pretty well for the oil companies and their wealthy executives. But they forgot one thing. If the rural poor can't afford to drive to work, who will clean their resort hotel rooms?


Sarah J said...

You've hit upon yet another good reason why alternative energy should be at the top of all countries' national agendas. This current oil crisis is scary and incredibly frustrating, even for non-commuters like myself who fill up maybe twice a month. And, I agree-- public transportation may be a plausible answer for rural residents in other countries, but the U.S. is big and, evidently, too unwieldy to create effective public transportation systems for our thousands of people in need. I for one am excited and optimistic about the popular uprisings happening around the globe, but the fact that they are also causing suffering halfway across the world is problematic and should be addressed.

N.P. said...

It is interesting considering roads and oil companies, and the role that each one has upon the other. If you consider federal lands, and the BLM which manages them, part of the reason that the BLM will open up lands in portions of wilderness designated areas - or areas in rural regions - is to create roads for large oil, gas, or mining corporations to begin extracting natural resources. The main problem is that these companies are allowed to come in, the roads to be built, and the area to be decimated in a brief period of time, without understanding the underlying ramifications to the community and the environment.

vlshaw said...

This post is right on the money. Rural places in California often have much higher gas prices than the rest of the state. In Humboldt County for example, gas prices are already over $4.00/gallon. The fact that the gas trucks have to travel hundreds of miles on mountainous highways is the reason. People also have a higher percentage of gas guzzeling trucks and 4WD SUVs. The economy is terrible, public transportation is hideous, these people are being squeezed harder than the average American. I love your line, "can't Big Oil share some of those sweet Libyan uprising profits with the rest of us? "

RH said...

Yeah, they not only won't share, they want to take more from us. The oil companies' usual response to windfall tax discussions is that they need all those profits in order to explore for more oil. But we already give them huge tax subsidies:

The rich get richer.

Jon di Cristina said...

I'm really fascinated by the problem of transportation in rural areas. As you mentioned, public transportation is only viable with sufficient demand, but one of the draws of rural living (at least for many) is low density housing, something that only decreases demand for public transportation. Is the only answer creating affordable alternative-energy vehicles?

Caitlin said...

I remember that when I lived in the outskirts of Salinas (2006 Population: 148,350) during the last half of high school, it was constantly an issue to get to my high school located in Monterey, 20 miles away, because of the very limited public transportation that was accessible within walking or even biking distance of my house. Literally 2 buses connecting to Monterey came past my house all morning (at 7 and 8am) and then two came past my house at night (at 5:30 and 6:30). I remember very vividly the mornings my little brother would oversleep and I would drive to school without him (once I had a car, which was a very big deal) and he would miss school all day because of a lack of available transportation to school.

Additionally, I can relate to the intense gas prices in rural places. Big Sur, California, always has gas prices that are $1-$2 higher than everywhere else, most likely to to the remoteness of the location and the safety concerns with transporting large amounts of fuel in to the area. And yet, people continue to live there and commute long distances in order to work. I wonder if there will be a tipping point at which people start moving out due to the overwhelming cost of fuel--or alternatively, pickups are replaced by hybrids in places like Big Sur.