Paying the price for energy myopia

For years now, as the end of cheap gas became an inevitability, there have been any number of predictions about what higher prices would mean for people, for society, for the economy, for the environment, for cities, suburbs and neighborhoods.

While gas was under $2 a gallon, and Hummers roamed I-64, such talk was speculation and theory. No matter how obvious those effects might be, how predictable - there were vast herds of politicians and other oil industry leaders who made fortunes by denying them.

Experts warned that such short-sightedness was a bad idea, but the alternatives were unpopular, and therefore ignored. And so the nation enters this energy crisis entirely unprepared for it.

In 2005, before the current price spike began, Americans spent an average of $3,525 each on energy. That spending amounted to about 8.4 percent of the nation's gross domestic product. Both of those are the latest figures available from the Energy Information Administration and represent a time when a barrel of oil cost half what it does now.

In fact, according to the Bureau of Labor Statistics' consumer price index, energy costs for an American household were a full 47.2 percent higher in the first half of 2008 than in the first half of 2005. The long-term trends show costs rising further still.

Even as politicians and consumers race to make the adjustments necessary to deal with the current and coming pain, powerful economic realities have already begun to extract a cost on everyone who has to drive, or eat, or buy things.

Start with the obvious: People are driving less, and when they do drive, paying more. They're spending more on electricity and will soon spend much more on heating oil and natural gas.

All that means consumers have less money to use on anything else, which slows an economy based on consumer spending, making a budding recession worse.

Prices are already rising for all kinds of food, grown with petroleum-based fertilizer and transported in trucks burning diesel - as well as for any other product that has to be moved from factory to customer, or that requires plastics made from oil.

Then there's the way we live.

A 20-mile round-trip commute - close to the norm here - is one thing when it consumes $4 worth of gas each day. It's quite another when it consumes $8 in gas, or when it consumes $12.

In small towns across the United States, people have already begun selling houses in order to move closer to jobs in urban centers, a trend that will only accelerate as gas grows more expensive, and mortgages become easier to get.

That trend depends, in part, on higher gas prices persisting. If gas prices stay high, sprawl-born exurbs will see an even bigger exodus, a reverse of the urban flight that ruled the past five decades.

That may even mark the end of the rapid growth in places like Suffolk and Isle of Wight, rural Chesapeake and Virginia Beach.

The winners in such a future will be urban centers with good jobs and short, cheap commutes. Places like Norfolk and Portsmouth.

The transformation will be in more than commuter patterns. A place like Virginia Beach, which manages to keep real estate taxes relatively low in part by leaning on tourists to make up the difference, may even need to begin shifting financial emphasis.

Fewer folks are already coming to the beaches this year and their stays are shorter. All that adds up to fewer jobs for people, smaller receipts for employers, and less revenue for City Hall.

None of this is crystal ball stuff. None of it is much beyond first-order effects of rising energy prices. All of it was predictable back when gas was $2.

Everyone could see this coming, and chose the expedient path, which led to cheap houses in the exurbs, SUVs that made us feel safe, and consumer goods and food that traveled further than most of us do in a lifetime.

That life is rapidly becoming too expensive to be sustainable.

The question is whether the financial pain we're feeling now is enough to jump-start the disruptive changes necessary to ease America's dependence on oil, or whether it will take worse.