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