Funny, I wrote this post before I went on my European adventure. You’re right of course. The fact that petrol prices across Europe have been jacked up for a long time has fundamentally changed driving and buying behavior throughout the EU. In the US, we’re so spoiled, it’s going to be a painful transition.

My view is that we’re going to have to make this transition some time, so why not do it now? Classically, Americans only get things done when we have a boot up our ass or a major financial incentive motivating us. That’s fine and the high(er) gas prices of today are exactly that. The bailouts that have been proposed by certain government are whacked. If we’re gonna make a change, let’s keep the motivation high.

By the way, I’m afraid that the whole gas vs. diesel thing is a bit harder in this country than the EU. While I am a huge proponent of more diesel vehicles, as it turns out, refining capacity in the US fundamentally produces less diesel than gas. If we inundate the market with diesels, diesel fuel prices will go through the roof. The US just doesn’t produce enough and it’s very difficult to change the refining infrastructure.

Europe has taken the tack of heavily taxing petroleum - in an effort to reduce the usage of cars for various environmental reasons, but also as a stealth tax to create public funds. In the UK, we have been taxed a huge amount on gasoline for years. Something like 2/3 of the price of gas is tax. Last year it was running at around 0.8-0.9 pounds per litre (around 8 USD per US gallon I think) and now with the price of oil it is around $11-$12 (USD) per US gallon. If you think people are hurting here in the US, they are really hurting in Europe. That said, the price of gasoline has been so very high for such a long time (via taxation) that the trend of buying more economical cars has been present for at least 15 years. No doubt you saw that on your trip - far more smaller cars. Something like 50% of BMW’s car sales are turbo-diesel in Europe (ultra low sulphur diesel is widely available at every filling station and diesel is only marginally more expensive than regular gas unlike the US).

Basically people bought what they needed generally speaking; there are still people buying large cars as status symbols just because they have the expendable income. Although the government is taking huge sums of money away from people, at least one of the small effects has been a drive by auto-makers to produce more economical cars. One of the big problems with having such a high tax on gas though is that when the total price hits breaking point (like it is now), it is very difficult for the government to lower the tax as that money has been rolled in to the budgets of the nation.

Here in the US, stupidly cheap gas with hardly any tax has just allowed people to buy stupidly big cars. It still amazes me that people really need a Crapillac Escapade or Low-Gas Negotiator (insert real name as appropriate) and I just laugh at the occupants when I see one. Now that gas price has quadrupled in 5 years, these people are in real pain. But not just the big car drivers; those driving 4 cylinder compacts are hurting because they just aren’t used to budgeting for gasoline.

I came over to Boston in March 2007 back when it was around $2.50 per gallon and just laughed about how cheap it was. Now it is $4+ and it still seems cheap, but mainly that’s because I’ve been used to the pain and have been used to budgeting myself with high fuel prices. I don’t think there will be any miracle cures in the next 10 years, but at least we can hope that more economical cars will make it over here to bridge the gap. VW and Merc both now sell 50 state legal diesels and Audi and Subaru are on their way too. 40mpg for an AWD wagon with a 0-60 of 8 seconds and far lower CO2 isn’t too bad eh? That’s the kind of thing that will hook people (well at least Bostonians) as long as we get low sulphur diesel at a price similar to gasoline.

Check out Wired Autopia for very interesting daily news about the latest and greatest alternative automotive news: http://blog.wired.com/cars/

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