Book Review: $20 Per Gallon

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You need to read this book. In fact, if you can read only one book between now and the end of the year, I highly recommend it be this one. $20 Per Gallon: How the Inevitable Rise in the Price of Gasoline Will Change Our Lives for the Better by Christopher Steiner is a price-point by price-point look at what will happen as gas prices head upwards over the coming years. The chapters are laid out as gas prices such as Chapter $10: The Car Diminished but Reborn and Chapter $16: The Food Web Deconstructed, and while making for some very interesting and educational reading, it is also quite frightening to be reminded of what we have created in the era of cheap fuel – and what will start happening as that era comes to a close. A good example of this comes in Chapter $14: The Fate of Small Towns…

The second big banana, and the biggest reason for Wal-Mart’s demise – at least Wal-Mart as we know it now – will be the outrageous cost of maintaining the retailer’s vast distribution and product network. Wal-Mart’s model works because of cheap gasoline. The company is able to leverage cheap labor in China to make many of its wares because of the low cost of getting those products back to the United States aboard giant cargo ships. Wal-Mart by itself is China’s eighth-largest trading partner. Once the boodle gets to a West Coast port, it’s moved by rail and by truck to Wal-Mart’s 140 distribution centers. This task requires Wal-Mart’s fleet of 7,200 semi-tractor trailer trucks, which fan out the goods to Wal-Mart’s 4,000 U.S. stores. Without gasoline at affordable prices, goods from China don’t float in at mass quantities, choking a main Wal-Mart advantage. Flinging the goods around the country, from port to distribution center to store, will become prohibitively expensive…

When Wal-Mart winces, the whole world knows. (They) have about 6,000 global suppliers; more than 80% of them are in China. China’s manufacturing sector will be in chaos. The makers of the cheapest stuff, the commodity junk, such as pens, inexpensive clothes, and housewares, will be hardest hit. Companies will be wrecked, supply chains will be decimated, jobs will be lost. Small towns lose their anchors, the stores that supplied everything to everybody.

Sounds like fun, right? Well, it’s not all bad news, as higher gas prices will eventually be good for us. It will lead to closer knit communities, smaller privately owned stores, a cleaner environment, and safer food and products as goods are made locally. The hardest part of all this?

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Comments

  1. The transition phase will be scary if it falls on us like an anvil. But I’m pretty pumped for life beyond that. Hopefully books like this will encourage people to try and make a relatively seamless transition.

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