NEAL CONAN, host:
This is TALK OF THE NATION. I'm Neal Conan in Washington.
In the past month, gas soared over the 3.50 mark on average around the country. It's over 3.90 in San Francisco and shows no signs of coming down.
Experts cite unrest in the Middle East and North Africa and the steadily growing demand for oil worldwide. Some want the president to tap the Strategic Petroleum Reserve for the first time since Hurricane Katrina, but that's unlikely to lower the price very much for very long, and prices usually rise as the weather warms.
So, how does the high price of gas change your life and your business? Give us a call, 800-989-8255. Email us, firstname.lastname@example.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, the president and a senior vice president resign from NPR after an embarrassing ambush video. Media correspondent David Folkenflik will join us.
But first, the high price of gas, and we begin with Steve Everly, who is reporting on these issues for the Kansas City Star and joins us now from our member station there in Kansas City, KCUR. Thanks very much for coming in.
Mr. STEVE EVERLY (Reporter, Kansas City Star): Thank you, Neal.
CONAN: And consumers, I guess, across the board are getting hit hardest by gas prices, but anybody in particular suffering badly?
Mr. EVERLY: Yes, there are several, and for me, the canaries in the coalmine are the independent truckers, who are sending out an early warning on just how bad it can be.
You know, truckers that do the long hauls, they use 20,000 gallons of fuel a year or more, and the independents have a very tough time passing those charges on to the customers.
There's really no fuel surcharge for them that they can pass along like some regular trucking companies are. So they're starting to struggle now. Their fuel bills are making it very, very difficult for them to do business.
And you can sort of go down the line now on who's being impacted the most at this particular time. For instance, people taking planes, the airlines are starting to raise fares. They have been for the last few months.
Probably significant is that Southwestern Airlines, just this week, raised airfares $10. They have traditionally been the best at managing their fuel costs. So if they've had to raise fares, that is a bad sign of things to come for the other airlines, as well.
And then when you get down to the consumer level, it's really varies right now, depending on how much fuel you use. Now, if you're an average driver, the cost right now is about 35 - extra cost is about $35 a month.
An average family has two cars. So that's $70 a month, and that's enough to wipe out that two percent payroll tax cut that was - a lot of people hoped would spur the economy on.
CONAN: And Kansas City, like much of the nation, was also hoping that the economy, the increased hiring and that sort of thing, was going to kick the economy up a little bit. In the meantime, this has got to be very scary.
Mr. EVERLY: It is, and I believe what has been - Neal, what has particularly been scary about this, this last month or so, is that no one's quite sure where it is going.
There is an enormous amount of uncertainty, worries about other countries that may have some troubles. So right now, we're at - oil prices are the highest that they've been since 2008. And the uncertainty is, is no one is really confident that they're going to stop here, that they could go much higher and that really the economic hurt is just starting.
CONAN: And of course, you mentioned independent truckers. They have no way to pass along a lot of their fuel price increases. Most companies do, though, and it turns out gas is a factor in, well, just about everything.
Mr. EVERLY: That's right. In some places, it's pretty easy to follow. For instance, UPS and Federal Express, they all have automatic fuel surcharges in place. And the impact so far is fairly minor, but I can give you one example.
If you were to ship a 10-pound package from Kansas City to Washington, D.C. on UPS, the extra charge right now is around 29 cents. This surcharge lags a little bit. So there's probably going to be another 10 to 20 cents coming in the next month or two. So you're talking, for this one package, about 50 cents extra.
CONAN: And that sounds negligible, but if you're sending a lot of packages, that adds up.
Mr. EVERLY: That's right, and then of course for the entire economy, it starts to add up, too, and I guess the worry of economists is that things like that are soaking up a lot of disposable income, and what could be spent on other things are being soaked up by the higher fuel prices.
CONAN: Let's see if we can get some callers in on the conversation. We want to hear from you how the rise in gas prices is affecting your life and your business, 800-989-8255. Email is email@example.com. And we'll start with Doug(ph), Doug with us from Little Rock.
DOUG (Caller): Oh, hello. I forgot to tell your screener, I'm going to try to sell -trade in my wagon for a Honda, the best gas mileage car I ever did own. But also, I ride my bike. I'm fortunate because I'm self-employed. I'm a carpenter. I can get my tools to work and then commute with a bicycle once the tools are there.
CONAN: Oh, so you drive the tools over in your car and then commute by bicycle?
DOUG: That's correct. I can't do it on every job, but my car broke down a while back, and I was forced to do it, and it was a pain for a day or two, but after a while, it was really very gratifying.
CONAN: The second day, your legs hurt a little bit, but after that, it gets better.
DOUG: Exactly right. So - and I understand most people can't do that. But some people can, and it's really very - like I say, you feel better once you do it.
CONAN: All right, Doug, have a good time cycling to work.
DOUG: Oh, well, thank you. You have a good day.
CONAN: Bye-bye. And Steve Everly, are people doing that kind of thing in Kansas City, as well, turning to bicycles?
Mr. EVERLY: Well, I don't know if we've gotten to bicycles yet, but they're certainly looking at more fuel-efficient cars. There was an auto show in town just this past week, and the biggest crowds were around crowds like the Ford Fiesta and the Chevrolet Cruise and the Honda Civic that were getting up to 40 miles per gallon. There seemed to be a real interest in those cars.
I think a good piece, Neal, of good news, at the moment, is that Detroit and the other automakers are probably better prepared for this, for providing fuel-efficient cars than any time in the past. They've got a lot of models out to start meeting the increased fuel economy standards that the federal government's going to impose.
And it's not hard at all to find a car that'll get 38 or 40 miles per gallon. So if you're out shopping for a new car, there's a way to cut your gas bill pretty easily, and that is to get a car that gets good gas mileage.
CONAN: Here's an email we have from Donald(ph), a business owner in Hawaii. He says: Luckily, we are not seeing $4 a gallon yet. Right now, the average is $3.75. Being an island reliant on shipping, Hawaii is really hurting right now, as shipping has gone up almost 25 percent in the last few months.
Let's see if we can get to Aaron(ph), Aaron with us from Weaverville in California.
AARON (Caller): Hi, how are you today?
CONAN: Good, thanks.
AARON: I live in Trinity County. It's a small county here in Northern California. And our business runs off of diesel trucks. My comment is really more of a question, and that is: Why are diesel prices higher than regular gasoline, even though diesel is less refined?
CONAN: That's been a puzzle to people, Steve Everly, for some years, as diesel prices overtook regular gasoline prices, I guess, some time ago.
Mr. EVERLY: That's right. For the last two or three years, that's happened, and here's what's going on: Diesel is much more popular in places like Europe. They're using a lot more diesel, even for cars.
So one of the things going on, and it's been going on for the last couple years, is the United States is exporting a lot of diesel to overseas markets. That's tightened the supply here, and also, it kind of equalizes a little bit more the price that we pay here for diesel compared to overseas.
So unfortunately, the global market is to blame here, and exporting the diesel, and this looks like a situation that is going to continue for some time. There's no sign that that's going to ease at all.
CONAN: It takes a long time to build a refinery, and it takes a long time to get permission for one. So Aaron, I hope that answered your question.
AARON: All right, thank you.
CONAN: Thank you. Let's see if we can go next to - this is Joe(ph), Joe with us from Salem in Oregon.
JOE (Caller): Yeah, how are you doing, Neal?
JOE: I just wanted to kind of throw a comment out there for people to realize. There's this ever-growing need for customer service in America, and everybody wants, you know, everything done for them.
And I'm a local garbage man, and Marion County is recently passing that they're going to do recycling out in the rural country areas and everything like that. But I don't think they're realizing the amount of fuel that is going to be used from these trucks, especially the new trucks that we get, get up to, like one mile per gallon.
And the little amount of recycling that we're going to be picking up, I mean, is - you know, it's not worth it. People want to good with recycling and all this, but they don't realize all the fuel that goes with that, and it's just driving up the demand for fuel that much more. And it's a negative progress, in my opinion.
CONAN: All right, Joe, thanks very much, and appreciate the commentary. That -Steve Everly, is there recycling in Kansas City?
Mr. EVERLY: Yeah, there is, and it's become more popular in the last two or three years. I don't know if we go that far out into the country, but they do a weekly route to pick it up. But, you know, I think a point he's making, doing some real structural changes, watching the routes that are taken and trying to conserve fuel that way is well-taken.
One of my favorite examples of something that's been done - that's already been done - is that UPS, when they do - map out their routes for the day, they try to map them so there are fewer left turns that will limit the amount of idling that the trucks will be doing.
And it saves them not an enormous amount of fuel, but it builds up, and they do a number of things like that to save some money.
CONAN: We have this email from Sue(ph) in Nome, Alaska, who tells us it's hard to be sympathetic with folks paying $3.90 a gallon: In my town, we're paying $5 a gallon for gas and $6 a gallon for heating fuel. In many of our native villages, they're paying up to $8 to $10 for both. We have folks who have to choose between heat and food for the last several years, just something for others to keep in perspective.
Steve Everly, thanks very much for your time today.
Mr. EVERLY: Well, thank you very much, Neal.
CONAN: Steve Everly, a reporter for the Kansas City Star, with us from our member station there in Kansas City, KCUR. We're hearing about how the high price of gas makes our lives more difficult. Our next guest says some good could come from it, as well. Tell us what possible long-term societal gains do you see when gas prices go up? Give us a call, 800-989-8255. Email firstname.lastname@example.org. Stay with us. I'm Neal Conan, TALK OF THE NATION, NPR News.
(Soundbite of music)
CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington.
Earlier today, Libyan government forces struck an oil facility near the coastal city of Ras Lanuf. According to the Associated Press, a giant yellow fireball tore across the sky. Video footage from Al-Jazeera showed plumes of black smoke pouring from the refinery.
The extent of the damage there is still unclear, and so, too, is what the continuing unrest in North Africa and the Middle East may mean for global oil supplies.
We've heard how soaring gas prices make it hard to run your households and your businesses, but tell us: Can you imagine how, in the long term, there might be some benefits when gas costs more? Amid the pain, are there possible long-term gains you see?
Give us a call, 800-989-8255. Email us, email@example.com. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Joining us now is Chris Steiner, staff writer for Forbes, the author of "$20 Per Gallon," a book that examines, somewhat optimistically, what extremely high gas prices might mean for our lives, and he joins us from KGNU in Boulder, Colorado. And Chris, nice to have you back on the program.
Mr. CHRIS STEINER (Staff Writer, Forbes; Author, "$20 Per Gallon"): Yeah, thanks, Neal.
CONAN: And I want to acknowledge that though you believe in the potential for a positive outcome of very high gas prices, that's after some very difficult times in the short term. Broadly, some of those difficulties, well, we're hearing about them - among other things, food prices go up.
Mr. STEINER: Absolutely. Everything goes up. And I think as some of your listeners attested to, high gas prices affect the lower stratas of our economic ladder more than anybody else. And that - you know, those people are going to have the hardest time dealing with this.
And it's really unfortunate, and hopefully, people learn to deal with this. But hopefully, maybe we see government programs step in if we see prolonged high prices of, say, $5 a gallon, to help people get through those points in their life where they have to travel far or whatever is because a lot of people are in very bad spots when it comes to choosing between fuel, food and shelter. And those people, I think, need help.
CONAN: And you wrote in your book that, in fact, as long as oil is around 4, $5 a gallon, people think: Well, this is a spike. It'll come back down. But you think if hits 6, there would be a tipping point.
Mr. STEINER: I think that is a tipping point. And in fact, you know, it's really interesting to see how we're going to react, now, with $4 gas across the country if we do indeed see that this summer, as a lot of people think we will.
And of course, we've already been there. It was 2008. And just this morning, there was a very informative article in the New York Times, talking about how we're better prepared.
And it talked about a lot of things, some of which - the fact that our overall fleet has gotten more fuel efficient. The American car makers are making better, more fuel-efficient cars. They're staying profitable, even as the price of gas goes up.
And remember, that, the price of gas really was the death knell for our car companies here. They had gotten rich making SUVs. Those are very high-margin vehicles. And now they're figuring out how to do it with smaller margins on smaller cars. And I think that's really important, and that's going to help us get through these periods.
CONAN: The last time, as you mentioned, Detroit was very focused on SUVs and minivans. They're now talking about hybrids and things like the Leaf.
Mr. STEINER: That's right, and, you know, that is the remnants of 2008. And I think people - we saw how people changed their behavior in 2008. Americans drove 100 billion less miles in 2008 than they did in 2007. That is a testament to the power of the price of gasoline. And, of course, $4 was clearly a tipping point for Americans' behaviors.
And so we're going to get back there. We're going to see what happens. And then we're going to go forward. And I think you're going to see some of the same effects, but I think we are in better shape today than just - we were just two years ago.
In fact, we use five percent less oil in this country now than we did just three or four years ago, and a lot of the demand increase, of course, across the world isn't coming from here. It's coming from China and India. And those burgeoning markets aren't going away anytime soon.
CONAN: We're talking with Chris Steiner of Forbes magazine, author of "$20 Per Gallon." We want to hear from you. Yes, amid the very dark clouds of soaring gas prices, are there any silver linings? 800-989-8255. Email firstname.lastname@example.org. We'll go to Ramon(ph), Ramon with us from Grand Rapids.
RAMON (Caller): Hi, Neal. An interesting benefit to the rise in gas prices that my family saw back in 2008 and now again, my family runs a rendering company, which takes used restaurant grease and sells it - refines it, cleans it up and sells it to farmers to mix in with their corn feed.
And as prices rise, the demand for ethanol increases, which drives up the price of corn. And so more farmers are buying this grease to mix in with their feed, and that - it's just a boom for the business.
We saw prices back in 2008, and they're getting back up there now, double or triple.
CONAN: And I had not thought of that particular niche industry doing better as a result of higher fuel prices, but congratulations, Ramon.
RAMON: Thank you very much.
CONAN: All right, thanks very much for the call. Obviously, he mentions corn for ethanol, a very heavily subsidized additive for gasoline, but in general, higher fuel prices, petroleum prices, make alternative fuels more competitive.
Mr. STEINER: Absolutely. And, you know, the funny thing is I bet Ramon also is seeing a price increase because you have more people actually using that melted-down vegetable oil in their vehicles.
I mean, we've all heard of some guy with the VW bus who fills it up with oil he collects from restaurants in town, and there's more and more people doing that. It's a very viable way to get around, and it's in fact a pretty green way to get around.
CONAN: Here's an email from Tom(ph) in San Rafael: It impacts my life very little, as I use electric vehicles, mostly, but despite all the moaning about high gas and oil prices, they are the only thing spurring conservation.
Few know that we must cut greenhouse gas emissions by 90 percent in just a decade or two to avoid catastrophic effects from global warming. The severe storms in the East this year are a prime example of the kind of problems a rapidly warming climate will bring. Would higher petroleum prices, gas prices, bring down our carbon footprint?
Mr. STEINER: Absolutely, and it goes beyond just, say, our carbon footprint in global warming. It goes to things like particulate matter in our air. Twenty-five thousand people in America die from some symptom of particulate matter being in the air every year, and half of that particulate matter comes from our cars and our trucks on the road.
And as the price of gas goes up, the amount of particulate matter, that's the really nasty stuff in our air, goes down accordingly. And so it's one of these strange benefits to a higher price of gas. And people get skinnier. Death rates go down on our highways because people drive slower because they want to avoid using too much gasoline as they go.
And there's a lot of weird ancillary benefits that we're going to start to see, we've already seen since 2008, and they're going to continue.
CONAN: I hope people get slimmer not because the price of food is higher but because they're walking more.
Mr. STEINER: Absolutely. Well, you know, everyone remembers the summer of 2008 and how expensive gas was. And if you are a mass-transit rider regularly, you remember seeing a lot of new faces during the summer of 2008.
And that goes for Chicago or San Francisco or even New York, to some degree. People left their cars at home and got on the commuter rail systems, and these things were overfilling. They had to put more trains on the tracks in a lot of cases, and it was really good for these systems.
People learned how to use them, and some people haven't gone back to their cars. And so when you take a train or a bus instead of driving your car, now, instead of going in your garage, sitting in your car, driving to work, getting out of your car, going to your desk and sitting down, you are walking to a train station, walking to a bus station, getting off, and usually you have to walk a half mile or so to work.
So you're actually getting in a couple miles of walking every day. That makes a big difference when you carry it out over two, three years, the amount of calories burned there. It's the difference between 10 or 20 pounds on a lot of people.
CONAN: Here's an email from Tom(ph) in Hastings, Michigan: I own a shuttle car-spotting service in Michigan's U.P. High gas prices work in my favor. Instead of two backpackers driving two cars, they drive one, save $150 in gas and spend two extra days on the trail.
So again, you don't necessarily think of that. Let's go to Adrian(ph), Adrian with us from Kansas City, where we were on the air before with Steve Everly of the Kansas City Star.
ADRIAN (Caller): Hey, good afternoon, Neal. One thing I was going to say, it will connect, walking, communities together. And also, too, I think especially for Americans, it'll make us redefine our quote-unquote "luxuries."
And sometimes I think, and I have to say it like this: I think sometimes when things like these happen, we really come together. And we come together in a sense of realizing that everything that we thought was a luxury, we really don't miss it. And we start enjoying the things that we used to take for granted more.
And hopefully, for some cities that are really expanding like Kansas City, it'll get the effort really on the ball for a massive rail system, which is long overdue.
CONAN: It's interesting you mention that. We have this email from David(ph) in Sioux Falls: Have been taking the bus for two years now. Not only helps my budget compared to filling up the tank every week but has also introduced me to a whole new social surrounding with my fellow bus commuters. So Adrian, it might improve our social lives, too.
ADRIAN: Yeah, thank you.
CONAN: Thanks very much for the call, appreciate it. Let's see if we can go next to - this is Jay(ph), Jay with us from Denver.
JAY (Caller): Yeah, hi, how are you?
CONAN: Good, thanks.
JAY: So I just wanted to say I was at the pump last week, and I think gas was, like $3.17. It's like three and a quarter right now. I just noticed there was a guy that was filling up next to me, and he was filling up tank after tank in the back of his truck - of gas.
So I kind of made a little joke to him, saying: Oh, are you getting it while it's cheap? And he kind of gave me a little aggro look. He said: Well, just wait until next month when it's going to be $7 a gallon.
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JAY: So I just...
Mr. STEINER: Whoa. Look out.
JAY: ...find it funny, you know, the fear factor is out there. You know what I mean?
CONAN: I could hear that. I just hope he's not an oil trader and knows a lot. Maybe he's just an alarmist. So - but, Jay, thanks very much for the call. Appreciate it.
JAY: Thank you.
CONAN: Here's an email from Corey(ph) and he says: The most obvious to me as a manufacturer is that higher fuel prices translates to into higher transportation costs taken to an extreme. This will bring back manufacturing jobs as the difference between producing overseas and locally diminishes.
Mr. STEINER: Yeah. I don't think that's untrue. In fact, I think it's totally true. We're going to have to see some pretty high oil prices to subvert the current container economy that we've built, you know, these ships that go from the East Coast of China to the West Coast of the United States.
But the price of moving a container has gone up a lot over the last three years. And there are breaking points for certain manufacturers and, especially when it comes to food and low-value-added items, you know, spatulas and, you know, cheap plastic hinky-dinkies(ph) that Wal-Mart, say, is full of. And at some point, it's going to be more affordable for a company to just bring that stuff stateside and get the good PR that comes with it rather than paying the very volatile and much higher prices of bringing it from China.
And, of course, the other problem there for manufacturers overseas is that Chinese workers are on an upward pay scale. It's going to keep going up. It's going to go up at a much higher rate than pay will in the United States.
CONAN: And let's go to Melissa(ph), Melissa with us from Paducah in Kentucky.
MELISSA (Caller): Yes. I'm a rural mail carrier, so I provide my own car. And I'm given a maintenance allowance, which is supposed to pay for gas and maintenance of my car. But it's only adjusted every - quarterly, based on what the gas prices happened to be at the end of the quarter. And I have to take that as - comes in my check and I have to take that out of my check and make sure I have that so that I can work.
CONAN: And over time, that usually works out. But when gas prices are this volatile, you can really get caught short.
MELISSA: Oh, yeah. We - several times have, you know, gotten. It doesn't even pay. And, of course, we're just being paid for the miles we spend on the route. We're not paid for the gas we spent going back and forth to work. And obviously, we can't carpool if we have to use our own car.
CONAN: Of course not.
MELISSA: And we have to have a large enough vehicle to be able to carry packages and mail, so, you know, very few compact cars that are going to be big enough to handle our load.
MELISSA: I think the postal services, you know, perhaps it will help the postal service there - the fleet of the mail trucks. They may have to look into redesigning those, maybe getting hybrids and we just may have to have higher postage rates because we don't have a fuel surcharge like UPS and FedEx. You know, you pay that rate and that is supposed to pay for the whole delivery of whatever you're sending. And, you know, gas prices are really taking a chunk out of my industry, which is already strapped.
CONAN: Melissa, we wish you the best of luck. But thanks very much for that information. It's something we hadn't considered. Appreciate it.
CONAN: We're talking about the good and bad effects of higher gas prices. You're listening to TALK OF THE NATION from NPR News.
And let me re-introduce Chris Steiner, staff writer at Forbes magazine, author of a book called "$20 Per Gallon."
This is an email we have from Emma(ph) in San Jose: We walk to school. Hopefully, more kids will be less fat and walk to school more too. It seems like it would build the community.
And you suggest, Chris, that as structural changes would take place as fuel prices go up and up and hit various levels, we will start to redesign our communities and include things like more sidewalks.
Mr. STEINER: Absolutely. And, you know, this right now has been a social movement. People, you know, especially young people in their 20s and 30s, have chosen, a lot of them, to live in places where they can have a walkable life, where the kids can walk to school, or they can walk to a store to buy a gallon of milk, and where maybe they can perhaps catch public transportation to go to work.
And so we've seen those areas, even after this real estate crash, those areas, the places that have the best walkability scores, so to speak, have done the best. They have held their value the best. They have come back the strongest and that's because there's demand for those places.
Now, what do you suppose happens when the price of gas goes to 4.50 or $5? Well, there's going to be even more demand for those place. So those places are going to go up in value.
And where there's demand, of course, there becomes supply. It's a capitalistic society that we live in. And so developers, just as they built McMansions in the 1990s because there was a demand for them, are going to build walkable communities. And some of these things will be fashioned out of existing structures, maybe old strip malls that can be refashioned. This is happening in places like Longmont, Colorado; Long Beach, California; in some of the outer ring suburbs of Chicago.
A lot of suburbs are starting to get the fact that for them to be vibrant and survive in the future, they're going to have to be more than just bedroom communities. They're going to need some economic gravity. They're going to need businesses and jobs unto themselves and that means some density.
CONAN: Here's an email from Sam(ph) in rural North Dakota: I have a hard time finding the benefits of higher gas prices while living in a rural area where farming is the dominant occupation. No mass transit here, and it's too cold in the winter for batteries of electric cars.
Mr. STEINER: That's a bummer. But the good news is that, you know, the price of food is going to go as high as it has to go to keep people like him working. Food is not going to go away, so there's that. And I usually think that farmers - you know, I know they're always worried about their business. But the fact is we all have to eat and we all use the products that come from their farms. So I think the price is going to affect them to some degree but, you know, their margins are probably going to stay somewhat the same.
And, in fact, you know, the calories they produce in a stalk of corn may go up in value because that is, in fact, energy as the price of energy goes up all over the world.
CONAN: Here's an email from Tyler(ph) in Wisconsin: A report released last month showed a direct correlation between rising gas price and unemployment at a two-year lag. In other words, higher gas price now. Be prepared for recession 2013.
Mr. STEINER: Interesting. I do think, obviously, the price of gas, as it gets higher, is a drag in our economy. That's not debatable. We ship half a trillion dollars a year overseas. We don't ever see that money again that goes out for oil. And that - well, we need oil to do everything, to move everything and to build everything.
I'm sitting in a studio right now and I'm looking at the walls. They're padded. They have this nice texture on them. I'm looking at a nylon carpet on the floor. I'm sitting on nylon cushions, and I'm sitting at a plastic desk. It's all made out of oil. Not only did it get to me by way of oil-propelled machines, it's made out of things that came from the oil refining process.
So absolutely, the price of oil is a drag in the economy. But we're adjusting and that's the important thing.
CONAN: Chris Steiner, a staff writer at Forbes magazine, author of "$20 Per Gallon." He was with us from KGNU, our member station in Boulder, Colorado. Thanks very much.
Mr. STEINER: Thank you, Neal.
CONAN: And this last email from Kerry(ph): Very small gas change. I bought a push mower.
Coming up after a short break, we'll talk about the upheaval here at NPR. Stay with us for that.
I'm Neal Conan. It's the TALK OF THE NATION from NPR News. Transcript provided by NPR, Copyright NPR.
As oil prices spike on the world market, the rising cost of gas is taking a toll on consumers. Steve Everly of the Kansas City Star explains what's behind the current price hikes, and Chris Steiner of Forbes explains the potential impact if prices continue to rise.
As oil prices spike on the world market, the rising cost of gas is taking a toll on drivers at the pump. For the average driver, the higher prices amount to approximately $35 more per month, Kansas City Star reporter Steve Everly tells NPR's Neal Conan. For the average two-car family, says Everly, "that's enough to wipe out" the 2 percentage point payroll tax cut that a lot of people "hoped would spur the economy on."
Consumers are also seeing increases in air fare costs, says Everly, and can expect the cost of shipping and other products and services to rise, as well. "The worry of economists is things like that are soaking up a lot of disposable income, and what could be spent on other things are being soaked up by higher fuel prices."
"A lot of people are in bad spots when it comes to choosing between food, fuel and shelter," says Chris Steiner, author of $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better. But while rising fuel prices hit individuals hard, Steiner argues that there are some potential long-term benefits, as well. "We saw how people changed their behavior in 2008," when the average gas price peaked near $4 per gallon, Steiner tells Conan. "If you were a mass transit rider regularly, you remember seeing a lot of new faces. ... People left their cars at home and got on the commuter rail systems."
Steiner also notes that the high fuel prices of 2008 ushered in significant improvements in the domestic car industry. "Our overall fleet has gotten more fuel efficient. American carmakers are making better, more fuel efficient cars," says Steiner. "They're staying profitable even as the price of gas goes up. ... That's going to help us get through these periods."