Demand Options, Not Inelasticity

Gasoline. We love it. We need it. We hate it. AUGH!

Dear Lord, why does everything have to be so complicated?!

It's complicated because 1) gas is so packed with goodness -- it's "energy-dense" -- and 2) because it comes in liquid form -- easily transported, easily stored. That's why gasoline has powered the Industrial Revolution. Yeah, coal, water power, natural gas, nuclear fission, solar, and wind turbines provide us with cheap electricity. But nothing puts the zoom of our personal transport into the 21st Century like a gallon of good ol' petrol.

Except (as if you didn't already know), gas fails both tests of moving Greenward:

1. Is it clean and non-polluting? No.
2. Is it sustainable or recyclable? No.

Burning gasoline adds carbon dioxide to our atmosphere. "How much?" you ask. Lots. Each gallon burned gives off 19.4 lbs. of CO2. "Wait, what?" you ask. How can a gallon of gasoline, which weighs about 8 lbs. give off a gas that weighs 19.4 lbs.? The answer is in all that O2 contained within the CO2. Gazillions of oxygen atoms are added to the gazillions of carbon atoms released during the combustion of all the long-chain carbon-based molecules contained within the gasoline. We all know that oxygen is a necessary ingredient in combustion. But now we know why... because it yearns to be combined with carbon atoms to create combustion's favorite end-result: CO2. And that's just gasoline. Diesel is worse, adding 22.2 lbs. of CO2 per gallon burned. The end result is that the typical passenger vehicle in the U.S. dumps 5.5 metric tons of CO2 into the atmosphere each year. That's 12,125 lbs. of invisible carbon dioxide. Per car. Per year.

And too much carbon dioxide, while good for green things, is not good for green-minded sentient beings like ourselves. Global warming? A topic for another day.

Sorry to get all science-y on you. It'll never happen again. [lies, all lies]

To the second test of Greenward-ness: How is gas unsustainable? Because it doesn't grow on trees. It comes in limited supplies. We've found all the significant deposits of the stuff, in the form of crude oil, that are to be found in the world. And all of those pumps sucking up the pools of black gold are now producing less and less oil each year over the previous year. We're now facing a gradual decline in worldwide oil production. No, we're not about to run out of oil anytime soon. But as supplies begin to dwindle -- and many credible experts believe we're on that cusp RIGHT NOW -- bidding wars will send prices skyward.

But we're America, right? We're gonna get ours, dammit.

So why the doctoral thesis on gasoline?

Because it's inelastic.

Inelast... WHAT?

Oh geez, did I get all economics-y on you now? Sorry. It'll never happen again. [more lies]

Practitioners of the dark arts of economics... oh wait, I'm sorry, it's not the "dark arts", it's the "dismal science"... anyway, if you'll recall back to freshman year, your economics professor once had you memorize the difference between elastic and inelastic demand. You answered it correctly on the test... and then promptly forgot it.

So here it is again: Elastic demand means that as the price of something goes up, demand for it goes down. Supply and demand in action. But not always. Because inelastic demand means that the demand remains constant regardless of pricing. Gas and pharmaceuticals are two examples of inelastic goods. People will pay WHATEVER IT TAKES to get the gas and drugs they need.

Which brings me to the point of today's lecture: This last year in the U.S., beginning with the 4th quarter, 2010 to end of the 3rd quarter, 2011, gas prices rose dramatically. Expenditures on the stuff rose 25%. How did we react? Read the next sentence and you tell me. Gas consumption in the U.S. dropped only 1.8%.


Nationwide, that's $108 billion MORE spent for 1.8% LESS gas than the year before. That price increase alone, delivered to the petroleum industry by each of us, wiped out President Obama's middle-class tax cut and the stimulus it was supposed to provide.

Is there any wonder that Americans now see cars as a necessary evil rather than as the symbol of individual freedom, a vision we've held for the past century?

Right now, it's estimated that a family of four in the U.S. spends between $7,900 and $13,000 each year on transportation. That's more than they spend on healthcare and taxes combined. That's quite a bite from a family budget, don't you think?

And it's only going to get worse.

People will spend whatever it takes to get to their jobs, to go to the grocery store, to take little Timmy to daycare, thinking there aren't any other options. But ARE there other options?

That's why I'm here. Stay tuned!


Your Green Life Begins with a First Step

Your home, your work, how you get around, your playtime, your activities, your fitness, your diet... your life. You want to be green? Let's call this a search for sustainability. Call it making your life and your house beautiful: It all begins with the decision to more forward... toward green solutions. Greenward!