Rupert Cornwell: Out of America

For a country where the car is king, the soaring price of oil means some long-cherished assumptions are being challenged as never before
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The Independent Online

Like many a longtime foreign resident of the US, I'm sometimes asked to recommend a book which explains to a newcomer how the place functions.

The possibilities are endless. But my answer never varies. I suggest they read Edge City by Joel Garreau. It's about the quiet, half-century-long revolution that has transformed America – a revolution that soaring oil prices have placed under threat as never before.

It came out back in 1991, a wonderful study of the rise of new communities around traditional old cities. The book is not about inner-city decay and the flight to the suburbs, but about the birth of a separate civilisation of gleaming new corporate offices, megachurches and shopping malls.

In turn, these edge cities helped fuel the growth of even further-flung "exurbs", rich commuter communities living a new frontier idyll. Today, exurbs remain some of the most dynamic and attractive parts of America. But this new civilisation has an Achilles heel. It has no interest in public transport. For its existence, it depends on the car.

Back in 1991, that didn't seem a problem. The internal combustion engine looked set to reign for ever. As Garreau wrote then, "no ... analyst around thinks there is any supply and demand reason – other than war – that the price of oil should go any higher than $30 a barrel ... in this generation." Back then a gallon of gas cost $1.30. Last week the national average price breached $4, and the price of oil flirted with $140 a barrel.

It's easy for Europeans to mock Americans for their anguish at $4 gasoline, when the soaring euro has pushed petrol prices to the equivalent of $10 or more a gallon in parts of the EU. But, in Europe, high taxes have long kept petrol expensive. In the US, where taxes constitute only a fraction of the cost, a jump in the cost of crude has a proportionately far greater impact. Petrol prices in Europe haven't virtually doubled in three years as they have here. And in Europe, unlike America, an entire way of life has not been founded on the mistaken premise that gasoline would be forever cheap.

The advent of $4-a-gallon gasoline has produced the inevitable theatrics. Right-wing nuts proclaim the whole thing is a plot by Arab oil producers, while Congress has hauled oil company bosses before it to explain why their firms are making profits the size of other countries' GNPs while ordinary Americans can't make ends meet.

Three weeks ago, just before the traditional start of the summer driving season, the House of Representatives passed a bill allowing Opec (the Organisation of Petroleum Exporting Countries) to be prosecuted under US anti-trust laws. It was called, groan, the "No Oil Producing and Exporting Cartels Act" or Nopec. Dick Cheney – Vice-President and former oilman – told audiences that, if people had listened to him and opened up Arctic wildlife refuges and unprospected parts of the Gulf of Mexico to drilling, the country wouldn't have reached such a pass.

Americans, however, aren't buying that argument. People seem to realise that an epochal shift in the global oil market is under way, which will not be greatly affected by a marginal increase in production in Texas, or by letting Big Oil loose in the Alaskan tundra, or by tax cuts that might knock 15 or 20 cents off the pump price, but which might equally be pocketed by those wicked oil companies.

Gasoline at $3 a gallon – a milestone passed barely a year ago – didn't seem to make much impact. But $4 a gallon has been a different story. Sales of "gas-guzzler" SUVs and pick-up trucks have plunged, and entire factories have closed. For the first time ever last month, sales of Japanese- and Korean-made cars exceeded those of GM, Ford and Chrysler combined.

Even in Detroit, the penny has finally dropped that the motoring industry must somehow drastically improve the fuel efficiency of its vehicles or perish. For the first time in decades, gasoline consumption is actually falling. Telecommuting is growing, as is the use of car pools. The Washington area is seeing a boom in "slugging", a system of casual, instant car pooling. All of a sudden, to this observer at least, there seem to be fewer cars on the roads.

So maybe the laws of supply and demand will work their magic. But for edge cities and the exurbs, the process may be exceedingly painful. Across the country, the average American family takes more than 3,000 car trips per year, compared with just 58 by public transport. In exurbia the disparity is even greater.

Indeed, in exurbia the great American energy crisis and the great American housing crisis converge. Much of the building boom has been here. This is "McMansion" land: a place of large new homes in once-unspoilt countryside. Between 2000 and 2006, these communities grew three times faster than the overall US population. But now the disadvantages of these pseudo-piles are obvious in the ever-rising bills – not just for gasoline, but for heating in winter and cooling in summer.

In exurbia, repossessions are at especially high levels. Just as house prices climbed fastest there in the good times, they are falling especially steeply as the cost of commuting has soared. The further away from the city, the rule of thumb now is, the harder it is to sell. Downtown and the old, long-dismissed inner suburbs are back in fashion.

And the trend has political ramifications as well. If closer-in suburbs tend to be Democratic, exurbia has long been seen as a Republican stronghold. Any setback for exurbia thus means more trouble for Republicans, as if they didn't have enough already. I'm not suggesting Garreau produce a revised version of his masterwork – just that something has to change. And the great thing about America is, when things have to change, they do.

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