As per yesterday’s note about the increasing importance of buying local, here comes a piece from Charlie Blaine on MSN Money, noting that if Goldman Sachs’ predictions are correct and oil reached $200 per barrel within a few years - that’s $7.52 per gallon at your local pump.
As Atrios notes, it may take prices that high to actually, permanently, change our collective driving habits. But Blaine predicts it would change a whole lot of other things, too:
Will there be any U.S.-based auto manufacturers left? The answer depends entirely on how fast they can transform their product lines. Chrysler is in deep trouble already. That probably means more stress for the Midwest.
Will there be any domestic airlines left? The so-called legacy airlines (American, United, Northwest, Delta and Continental) would either try to combine into one big carrier or simply disappear. They’re having serious troubles surviving as it is. This means big troubles for cities where these airlines operate hubs that generate thousands of jobs like Atlanta, Cleveland, Newark, Houston, Chicago, Denver, Dallas, Memphis and Minneapolis-St. Paul.
How will big convention cities survive? Places like Las Vegas, New Orleans, Atlanta, Chicago, New York, San Francisco and Houston have thriving convention industries, all built around the capacity of airlines to transport conventioneers to and from the destinations relatively cheaply. Emphasis on the word “cheaply.”
C’mon Artie - I just teed one up for you here.
How will tourist destinations like Florida or Hawaii cope? Add to that places like, say, Williamstown, Mass., whose Williamstown Theater Festival is a big draw, or Ashland, Ore., home of the Oregon Shakespeare Festival. They’re not close to major cities.
Lancaster is, but if gas gets to $7.50 a gallon, how many New Jersey types are still going to make the drive to come see the Amish?
And none of this gets into the effect that oil at $200 per barrel will have at your local supermarket. Hint: It will be massive, and there may even be disruptions in supply - again, if only because truckers strike. But maybe for other reasons, too.
The point is that while all of this may be a worst-case scenario, were it to come true we may find ourselves at the point where buying local is the only viable option. Which is why it makes sense, now, to do what you can to build up that local trade, because you’re going to want it to be there when you need it.
It’s perverse that it may take something like catastrophically high gas prices, which might wreck the national economy, to revitalize local economies. But I actually think this the wave of the future anyway; decentralization, the opposite of Wal-Mart, food and goods produced close to home, a decent living for the producers themselves. Sustainability. Cheap energy made the Wal-Mart model viable, more viable than what might be called economic localism. Expensive energy makes economic localism the only rational choice - and maybe, someday, the only choice period.
