7/3/08 Outrage of the Week: Seeking Oil Scapegoats

THE MOTLEY FOOL
7/3/08
Outrage of the Week: Seeking Oil Scapegoats

Morgan Housel



Former Secretary of State Dean Acheson once said, "The great corrupter of public man is the ego. Looking at the mirror distracts one's attention from the problem."

For issues making headlines today, I couldn't disagree more. When it comes to problems like oil and housing, people haven't been looking in the mirror enough. Whatever side of the argument you're on, it always seems to be someone else's fault.

Take last week's results of the Consumer Reports Auto Pulse Survey. When asked to name the cause of high gas prices, 77% of consumers blamed the government for failing to implement an effective energy policy, 75% of drivers blamed the oil companies, 70% pointed the finger at foreign oil producers, and 68% criticized the conflict in the Middle East.

While at least some of these factors have played a role in oil's rise, it's a little troubling that apparently, no one blamed themselves for consuming too much oil -- at least according to the survey results.



You're so vain, you probably think this article is about you
When something as beloved as gasoline is priced out of reach, consumers, producers, investors, and governments alike quickly start acting defensive. It's only natural -- everybody wants a solution, but nobody wants to be the problem. The president blames the Saudis, the Saudis blame the speculators, the speculators blame consumers, consumers blame the oil companies, and the oil companies blame the government. Alas, we're left with are discouraging words from our fearless leaders: There's no quick fix.

Hogwash. You want to find a quick solution to the oil crisis? Here's step one: Stop using so much oil.



He said, she said ... what about what you said?
Everyone has their own priorities -- and in a capitalistic economy, those priorities often revolve around maximizing profit. Do ExxonMobil (NYSE: XOM), BP (NYSE: BP), and Chevron (NYSE: CVX) like high oil prices? Of course. They're making a lot of money from them. Could Saudi Arabia pump more oil? Perhaps, but since oil is the country's main resource, Saudi Arabia also needs to consider the effect of its decisions on future generations. Are speculators making money from oil's rise? Yes. That's their job.

And how about consumers? Every Jane and Joe wants to see lower prices return, because the lower their gas bills are, the higher their personal "profits" will be. While your gas costs don't have as many zeroes in them as oil companies' earnings, the priorities aren't too different -- everyone just wants to maximize their financial well-being. Americans who call Big Oil "greedy" are the same people who help the United States consume 25% of the world's oil, despite having less than 5% of its population. I hate to tell you this, but I think we consumers truly deserve the "greedy" award.

All of this comes back to one central idea: Stop blaming and start doing. Placing blame on other people will only make it easier to believe that you'll never have to adapt to a world beyond cheap gas.



What you can do today
According to the Alliance to Save Energy, driving 5% less, slowing down, and keeping your tires inflated could lop off 1.3 million barrels of oil a day from America's tab. How fast you drive, and how quickly you accelerate, accounts for 10% to 30% of fuel consumption, according to Cambridge Energy Research Associates. According to a recent article from CNN Money, "In a typical family sedan, every 10 miles per hour you drive over 60 is like the price of gasoline going up about 54 cents a gallon."

Public transportation? That's already saving 1.4 billion gallons of gasoline every year, according to the ICF. You can only imagine the savings if people replaced blaring horns on the freeway with the same "mind the gap" warnings you see on the London Underground.



What you'll have to do tomorrow
With high prices at the pump, the big SUVs that were kings of the roads for the past two decades are starting to look as archaic and inefficient as a horse and buggy. And just in time. Toyota's (NYSE: TM) new Prius is rumored to get 94 miles per gallon. GM (NYSE: GM) plans on rolling out a fully electric car by 2010.

As gas pains keep pushing consumers into the ground, these are the types of technologies that people will need to embrace, along with personal sacrifices. Most people understand this, but detaching from an oil-based economy is a tough thing to do when you've got to alter your lifestyle. Sacrificing is painful, so blaming others delays your own need to change.

This doesn't mean that gas pains aren't a brutal thing to deal with, or that other forces outside our control aren't influencing prices. It just means that for something as problematic as oil, looking in the mirror might be the first step to getting things done.