$4/gallon gas may be a magic number

After years of not caring, Americans are changing their ways, and quickly.

1. Changed driving habits. From the New York Times:

“In March, Americans drove 11 billion fewer miles on public roads than in the same month the previous year, a 4.3 percent decrease — the sharpest one-month drop since the Federal Highway Administration began keeping records in 1942.”

2. Shopping closer to home. Consumers are beginning to question the "savings" gained from driving long distance to malls.

3.When buying cars, shirking the worst offenders. GM sales of SUV and trucks were down 25% in April, and down 37% in May over the previous year.

3. Buying houses where driving can be reduced. David Stiff, an economist who analyses housing prices nationally found that "even as overall sales volume drops, relatively stronger demand for housing will limit price declines in neighborhoods with shorter work commutes, better schools, and easier access to parks, recreation, and retail centers...Prices for homes in outlying neighborhoods will continue their more rapid decline and will be slower to rebound when housing markets finally start to recover." This effect can be seen in New York, metro Washington, Detroit.

4. And finally, choose jobs that are as close to home as possible, accessible by public transit, or can be walked, biked, or telecommuted to. These trends might be harder to spot in such a short period of time. But quoting from a Wall Street Journal article: "A poll earlier this year by California State University, Sacramento, found that high gasoline prices were the No. 1 concern in the area and that 12% of respondents had changed jobs or moved in the past year to shorten their commute to work."

Employers, retailers, developers, planners, governments take notice. Lifestyles that reduce dependence on costly gas – producing even more costly CO2 emissions – are in demand. Those who have been able to make changes quickly, have done so, and more and more people will make these changes as the opportunities present themselves.

If you think you can't afford to make these changes, do the math. It'll cost more to not be energy efficient when gas prices reach $5, $8 and $10/gallon. We all - individuals, companies, and governments -- have a huge budget to work with: the impending increases in fossil fuel prices that they will have to suck up, if we don't reduce demand for it now.

Thanks to Keith Collins who made this case beautifully clear in his presentation at the MassImpact symposium.