Petroleconomics

Gas prices have hit record highs as we approach the summer "driving season". Averages around the country hover around $3/gallon and, according to the media, if the prices continue to rise the Earth will suddenly, inexplicably explode.

I listened to a piece on NPR this morning about how some poor, small business owner was going to have to rethink having his 3/4-ton Silverado as his daily commuting vehicle. I'm supposed to feel sorry for this knucklehead? I've heard people say we must go hybrid or take public transportation. Here are some facts:

Hybrids:
Hybrids are the new rage. As such, customers usually pay a significant markup on the sticker price for these vehichles. Hybrids, on average, sell for a $5000-$6000 premium over their combustion engine counterparts. EPA mileage estimates for the Honda Civic Hybrid sedan are 49/51 compared to 30/38 for the standard Civic sedan. Even though EPA mileage estimates are wildly innaccurate for hybrids (EPA estimates are not based on actual miles driven, but instead on emissions! Given that hybrids naturally have fewer emissions due to the very nature of the vehicle it is only logical that their EPA estimates are erroneously high. Hybrid owners ofter complain of such after purchase and mileage estimates are more in the 33-35/37-39 range.), assuming a 13-gallon fuel tank and $3/gallon, a full hybrid tank would net you 637 city miles, or $0.06/mile, and the regular civic 390 city miles, or $0.10/mile. That's a net savings of $0.04/mile. Assuming you drive 400 miles/week (a high average), that works out to a savings of $832/year in gasoline costs. Given the premium you pay, you would need to own the vehicle for ~7 years to offset the price premium with your fuel savings. Futhermore, I would wager that about 40% of hybrid owners purchased their vehicles solely to use the HOV lanes for commuting with only 1 person in the car. I'm pretty sure I'd rather see 2 or 3 people in a regular Civic than 1 jackass is his hybrid, and I'm pretty sure it would be much more economical.

Public Transportation:
Homer Simpson once famously said, "Public transportation is for suckers." He may have been on to something there. When I took a job downtown 2 summers ago we crunched some numbers to determine whether we'd save money by taking the metro to work as opposed to driving. This assumed 1 fill-up per week and $200/month for parking when driving. Given that metro gouges you for an extra 30% to ride during rush hour (which, shockingly, is when we both leave for and from work), we determined that gasoline prices would have to reach ~$5.40/gallon before the metro became less costly. This doesn't even take into consideration the convenience factor, e.g. missed trains and/or buses, controlling your own schedule, etc... I figure these are worth at least another $1-$2/gallon. So maybe once gas hits $6/gallon, I'll rethink my current driving habits.

Here's the bottom line: America is spread out. Most cities don't have viable public transportation systems. People live in suburbs. Cars are a necessary tool in the American lifestyle. Yeah, gas prices are high, but hybrid alternatives are more expensive in the short- to mid-term and unproven in the long-term. Public transportation can be just as costly and is usually at a loss of convenience.

I think I'll just wait it out. Once all the damn hippies start buying hybrids, the demand on gas will lessen and I'll be a viking...