Thursday, May 22, 2008

It's all about oil

The moment I read this article in ET (about gas price rise hurting the US lifestyle), my immediate reaction was “Wasn’t this so very predictable? Do you need a gas price rise to tell you this is going to happen?”

I don’t know what people think the first time they visit the US, but I felt something was odd. The country was designed around cars and the mobility that they brought. I did not want to rent a car the first time I visited the country, simply because I didn’t want any adventure without someone to help me out with the logistics of renting for the first time and driving the first time outside Indian shores, but I was forced to rent a car since I just couldn’t survive without it in the place I lived. I happened to be put up in a small town with no public transport, and the nearest grocery store was about 2 miles away. It was high winter in Connecticut.

I guess about 95% of the people in the US can’t lead their regular lifestyle without automobiles. I mean, if it comes to it, I guess a lot of us in India or in other Asian countries could manage to live commuting in trains, buses, two-wheelers or even bicycles, primarily because everything you ‘need’, and a lot of what you ‘want’, is accessible within 3-5 Kms. US is startling in comparison. Consecutive shops were spaced 250 meters apart, which means that you can’t park your car near one shop and walk to another shop due the distance in between. You ‘have to’ drive down. Distances between residential locations and grocery stores were in miles, something you cannot walk or bicycle down. There were no small stores catering to small 100-250 households, but only single Wal-marts that catered to entire towns. Public transport was available in cities, but it was generally the lower middle class that used them. Add to it, people in US generally prefered to live in the outskirts – some 20 miles away from the city for ‘calm’ and ‘peace’.

And then, there are those BIG vehicles. Vehicles bigger than those share- vans in India (that could transport about 10-12 people when jam-packed) were carrying just a single passenger (the driver). My first thought was: if you want to drive single, why would you buy a mini-bus? Why can’t you buy a flashy but small car? Two reasons: 1) The fuel in US was cheaper than in most countries, and 2) People were rich. People continue to be rich now, but since fuel price has risen, and food price has risen, people are forced to face the pinch.

The US model is just not energy efficient. It is designed without a backup plan. What if the rampant car culture cannot be sustained? Will the country survive if the gas prices rise 10 times? I think India would. I am not an expert in optimum use of energy solutions, but the basics of supply chain management tell you that your design has move things from A to B paying the least cost. And that is something that’s been overlooked for decades in the US, simply because theirs was one of the few countries that was rich and could afford fuel. Now with other countries getting richer, fuel is THE premium product. It’s all about oil.

All said, it would really be interesting to see the US getting energy efficient and transforming the way the country travels. There is no alternative since fuel price has only one way to go: Upwards. When so many million cars get energy efficient, it is certainly good for the people around the world.

5 Comments:

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