What’s Driving Your Déjà Vu?

Those old enough to have lived through the Arab oil embargo of 1973-1974 may be experiencing a bit of déjà vu these days. Then, as now, the calm and predictable world of mobility we took for granted disappeared, leaving us with extraordinarily high gas prices, serious economic challenges, and a general uncertainty about what comes next.

Stations running out of gas, long lines at the pump, and restrictions on which days consumers can buy gas have thankfully not been a part of our lives since those dark days of the embargo. But still ... we wonder where this could all lead.

The news regularly reports on the rising cost of a barrel of oil, but really, this is an abstract for most who don't trade in commodities more exotic than groceries. What holds real meaning is the price we pay for gas, which is averaging $4.11 per gallon across the nation as this is written. The price of a gallon 10 years ago was $1.07. Five years ago it was $1.60. The predictable chain of events that accompanies extreme fuel prices is unfolding before us, with high gas prices straining family budgets and impacting the cost of getting goods to market and of services of all kinds.

And our response? After the usual denial and anger comes the acceptance that changes are required to compensate for our new reality. New car buyers are downsizing to vehicles with better fuel economy. Automakers are responding to changes in buying patterns by focusing less on larger light trucks and more on smaller and more efficient models. A growing number of hybrids are being offered, and purchased. Alternative fuels and efficient electric drive vehicles are being explored, developed, and marketed at an increased pace. Change is occurring but it will take time to impact our overall oil use.

In the meantime, there's the looming concept of real conservation. The state of Montana is going to a four day workweek for state employees to save fuel. Congress is exploring the potential for a national speed limit of the type imposed from 1974 to 1995, when a 55 mph limit saved 167,000 barrels of oil per day. That number would be much higher now considering the larger number of vehicles on the road. Plus, people are driving less. In March, 11 billion fewer miles were driven compared to the previous March, the sharpest drop since the government began keeping such records during WWII.

Yes, all of this is challenging. But the problem is more insidious than most imagine and change must occur. According to the Department of Energy, high fuel prices are expected to reduce the country's Gross Domestic Product by 1 ½ percent, or $230 billion, in 2008. The direct economic cost of oil dependence will reach a projected $560 billion this year. Of this, a $330 billion transfer of wealth is flowing from U.S. oil consumers to oil exporting economies...many of them not so friendly to U.S. interests. The transfer of wealth to these countries over the past five years totals about $1 trillion.

Does that hit a raw nerve?

Oil is holding our lives hostage and this must stop. We've known this time could come, and guess what? It's here. What are you prepared to do about it?