(June 23, 2008) — Have higher energy prices changed the way you live — yet? Pundits and economists have long wondered what gasoline would have to cost to get Americans to do more than complain and actually change their driving habits.
By all accounts, we reached that benchmark somewhere between $3 and $4 per gallon.
Higher energy prices aren't just hitting us at the pumps. In the plastics industry, we've seen higher resin prices even though the supply/demand picture makes that seem a bit screwy. If the economy is slumping and resin demand is down, why are prices rising? For pretty much the same reason gasoline prices are rising — demand abroad is healthy.
One big question remains: Other than our driving habits, how will higher energy prices change our living habits? In other words, what other long-term major changes can we expect to see as a result of superhigh oil and natural gas prices?
And there's a natural corollary for business owners — how will my company adapt, and perhaps even benefit, from the changes?
Keith Crain, chairman of our parent company Crain Communications Inc., addressed the question in a June 16 column in a sister publication, Crain's Detroit Business. He asked readers, “Are we willing to change our lifestyle?”
“We are used to living with lots of room. We're used to driving big vehicles, living in huge, fuel-inefficient homes and commuting long distances to and from work.
Are we worried enough about our expenses to think about downsizing not just our car but our house and, yes, even our commute?
I don't think so. We still want our space, whether it's a parking place at the mall or a minivan for our soccer mom.
What we're going to demand in the future is a lot better efficiency. We've had it too good and didn't worry about the cost. Well, that's all ended. We're going to want our large vehicles, but we're going to want them with a lot better mileage. We're going to figure out how to heat our homes with less fuel.
I don't think Americans are ready to adopt the lifestyle of the Asian or even the European consumer who lives in much smaller homes and uses a lot of public transportation.
We're going to learn to adapt, but there will be huge opportunities for businesses in the future to teach us how, and to sell us products that will enable us to enjoy today's lifestyle using less energy. And that will be one of the great business opportunities of the century.”
The picture that Crain paints offers the plastics industry good news on a silver platter.
You want big, lightweight cars that get better fuel economy? You'd better look at plastics and composites. You want big, energy-efficient homes and appliances? You need more and better types of plastics insulation, siding and roofing.
The list goes on, with advantages in nearly every end market and application. Despite what the public seems to believe, higher energy prices make plastics more sustainable, not less — as long as the public continues to consume.
Large numbers of consumers aren't going to move into thatched huts and live without plastic products.