It appears that the recent run up in oil prices is causing some concern among consumers, many of whom are apparently so cash strapped that they can no longer absorb $3.00 gasoline in their monthly budgets. Now a New York investment manager says get ready, prices may be poised to go a lot higher.
Not many of you know this, but I started my professional life as a Revenue Accountant in the upstream oil and gas business. Upstream is where they find oil and pump it out of the ground as opposed to downstream which is refining and delivery. I’ve always followed the oil industry and I think I understand it pretty well. Whenever I talk about oil prices, I subconsciously prepare for the vitriol that I’ve learned is sure to follow. Oil prices enrage otherwise level headed people in a way the price of Oreo cookies, beer or donuts does not.
I think a big part of this is that a lot of these folks feel trapped. They think they have no choice but to pay, but of course that is nothing more than the end result of a lot of other bad choices along the way…choices like buying that big old gas guzzler that seats an entire World Cup team and the ginormous home in the country, a million miles from work. Then there’s the riding lawnmower and the 200 hp snow blower and the leaf blower and yada, yada, yada. These are all choices that create challenges when it comes to making other, better choices.
It would be funny if it wasn’t so sad. Often when I suggest to someone that he or she substitute a bicycle for short trips, they tell me they can’t. What’s worse, they tell me that I’m lucky that I can…as if I haven’t made sacrifices to do so. I truly feel sorry for them. They don’t seem to understand that they’ve voluntarily given up control of their lives. They’ve decided that it’s hopeless and that they’re victims of some giant oil company conspiracy to destroy their lives and that’s that. There’s nothing anyone can do, so the government has to step in and regulate oil prices or release oil from the Strategic Petroleum Reserve because they’re hurting…never mind that when measured in a constant currency that oil is actually cheaper today than it was in 1965. Really. It is.
I don’t think oil is going to $150 any time soon, but I’m pretty sure that it will eventually get there. If you don’t want to pay it, don’t. Decide right now that you’re not going to and then develop a plan to make it happen. Don’t wait until then. Then will be too late. Then you will be trapped and have no choice but to pay. Do. It. Now.
How? I’d start by keeping a mileage log. Every time I used my car, I’d write down where I went and how many miles I covered. Next, I’d ask myself if I could do it differently. Maybe I could combine trips. Maybe I could order online instead of going to the store. Maybe I could ride my bicycle instead of driving my car.
I’d pay particular attention to all those trips of five miles or less. You might be surprised at just how many there are. These are obvious bicycle trips. Make enough of them and you might be able to drop the gym membership and save even more.
This is not just hypothetical. It’s how it started for me. Now I find that I don’t really care what oil prices do. In fact, there’s actually a benefit to me when they rise because people drive fewer miles and in a more measured way. That actually makes it easier to bike. Problem solved. At least that’s the way I see it.