I know it’s been a while since I last posted, and I also know that the huge readership of this blog has been waiting with baited breath for a new posting, but Twitter seems to have diverted a lot of my attention these days.

Anyway, I come to talk about Gas prices. I know, Gas prices have been in the news for months now, and none of it has been good. However, the impact of these prices haven’t had any effect on my until now. I just moved and took a job to which I can walk to, which mitigates my expences. In fact, in the past month that I’ve taken this job, I can count the number of times I’ve taken my car to go someplace on one hand. This suits me just fine, since I’ve never really been a fine of driving. But next weekend I plan to make the 5 hour drive back to see my parents for the weekend, and trying to calculate the cost of doing so. Fortunately for me, I have a fairly efficient car, a Chevy Cavalier. It’s Gas mileage isn’t comparable to, say, a Prius, but on the whole is quite good. I know I can get about 600 - 650 kms from a tank of Gas, and that my tank will hold about 55 litres when full. The Gas prices around here are about $1.50 a litre, times 55, equals 82.50!!! Not to sound like an old fart, but I remember that not too long ago a full tank would cost me about $50, so that’s a large increase. Luckily, like I said before, I don’t drive much, so this won’t affect me, but to someone who does not to drive a lot, this is a huge problem.

One sector of the economy that will be directly affected by this price increase is anything having to do with transportation. But cheap transportation of goods are one of the things the western world has built their economies on. Free Trade doesn’t make much sense if the transport of those goods negates the cost savings associated with producing those goods somewhere else. Cheap transportation costs allowed Free Trade to flourish as the prevailing wisdom, but that wisdom must change if costs can’t be controlled.

While the idea of Free Trade may be in trouble, the cost of Gas may have some benefit. People have been bemoaning the use of Oil for decades now, but outside of the fuel shortages of the 70s, there has never been much impetus for people to change. Oil had always been cheap, and as long as it was, people were happy to continue doing things the way they always had been, but with high costs, that impetus has now arrived. There’s no doubt that the high cost of Oil will hurt consumers, but that only applies in the short term. While the arrival of electric or hydrogen powered cars will not be immediate, there’s no doubt that their arrival will be sped up with the current price of Oil. So the high price of Oil will have some benefits, but they will not be immediate.

So, it’s not all good, but it’s not all bad. Free Trade between nations may be severely curtailed in the short to mid term, which could cause massive political upheaval. However, in the long term, Oil will be replaced, and the world will be far better off for it.