Monthly Archives: February 2011

Escaping High Oil Prices

Today, the average price of gas in the USA is $3.29 per gallon. It sounds expensive, but it’s actually quite cheap compared to prices in the rest of the world. In Japan and Korea, gas costs around $5.50 per gallon. In Hong Kong, Germany, and Denmark, gas can cost as much as $7.50 per gallon. Filling up a 16-gallon tank in a mid-sized car can easily cost over $110 in Norway. To put that in perspective, $110 can pay for two weeks worth of groceries.

At $3.29/gallon, you could be spending $2000 each year in gas prices alone if you commute 30 miles each day to work (1). If two people commute separately, that’s $4000 each year. And there’s more awful news to come: the price of oil will only continue to increase. It’s a matter of basic economics: demand is increasing, but supply is running out.

Petroleum is a limited, non-renewable resource. This means that oil production follows a curve: it starts slow, hits a peak, and then begins to trail. Oil engineers predicted this phenomenon in the early 1950s—and this may be the decade we may finally reach peak oil. Soon thereafter, global oil production will taper off. Already, most easy-to-reach oil supplies have been exhausted. Oil companies are now increasingly resorting to offshore and tar sands oil extraction, which are both expensive and harmful to the environment. Yet while supply is decreasing, demand for oil is exploding. In particular, the burgeoning middle classes of China and India are acquiring a taste for motor vehicles. With a billion cars worldwide today, and tens of millions more added each year, the price of fuel will skyrocket.

Oil production peak by country. (from US Department of Energy)

Our current era of cheap, unlimited energy is quickly coming to an end. By the end of this decade, the average household could be spending $8000+ on gasoline each year just to commute to work. Our society’s driving habits will change—if not for environmental reasons, then at least because of the price.

The best strategy for dealing with the upcoming energy crisis is to wean yourself off of petroleum. Live with less gasoline so that rising fuel prices won’t affect your standard of living. Not only will you help reduce pollution, you’ll be saving thousands of dollars, too.

Switch over to mass transit whenever you can. They conserve fuel and ultimately conserve you money. A $65 monthly bus pass could save you $100 each month in fuel costs alone, or $1200 each year (2). If you can live without a car, you can save another $4000 each year in auto insurance, car payments, and parking fees. You’ll also save time; instead of fighting traffic, you can read, rest, or relax.

If you’re willing to totally unplug from the oil economy, you can start bicycle commuting . By cycling, you can save $6000+ each year. You don’t even need a specialized bicycle; just use what you have. In fact, if you live close enough, you can just walk. Both tactics will save you money while providing exercise.

For decades, we’ve been willfully ignorant about the fact that oil is a limited resource. We pretended that gas pumps had a supply that could never end. But within a decade, many of us may be forced to live car-free out of economic necessity. We didn’t pay attention to conservation in the past; but today, we can’t afford not to.

Assumptions: $3.29/gallon, 30 miles 1-way implies 60 miles round-trip, 5 days per week, 50 weeks per year, average mileage is 25 miles/gallon: $3.29/gallon × 30 miles × 2 (round-trip) × 5 days/wk × 50 wks/yr ÷ 25 miles/gallon = $1974/yr. Per month, it’s $1974÷12 = $164.5. For two commuters, it’s $1974 &multiply; 2 = $3948/yr. If gas rises to $6.59/gallon (doubling in price), the cost of fuel for two commuters is $7896/yr.
A Los Angeles monthly bus pass is $75, and Orange County’s is $55. If the average bus pass is $65/mo., the difference between gasoline price and bus fare is $164.5 – $65 = $99.5. If we roughly estimate the cost of auto insurance ($1550), parking ($500), and car payments ($200/mo. &multiply 12mo. = $2400), the additional cost of car ownership is $4450/yr., not including the cost of maintenance and vehicle registration fees.

Life Without a Cell Phone

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This year, I’m making the effort to live without a cell phone. It’s part of my overall effort to save money while simplifying my life. As a backpacker, all my possessions must cram into a normal 30L bag, so I’m very picky about what I keep. My possessions are evaluated by two main criteria: it must be extremely cheap, and it must be undeniably useful . Cell phones didn’t make the cut.

Mobile plans are far more expensive than most people realize. In the past, I was spending $30 per month on a basic voice plan, which translates into $360 per year. The typical smartphone user pays even more. An average 3G data plan can cost around $85 per month, or $2000 over the lifetime of a 2-year contract. To put these figures in perspective, I’m currently only spending $150 per month on groceries. An extra $2000 could pay for a year’s worth of food. Cell phones are not how I want to use my money.

So I don’t own a cell phone or landline telephone anymore. Instead, I’m relying entirely on my laptop to receive phone calls. I signed up with a VOIP provider to get an incoming number (1). This allows others to call my laptop using a regular phone number (no computer required). With my plan, I get unlimited calls to the USA and extremely cheap international calls. In total, I only spend around $70 per year for the entire plan, for a savings of $650 each year compared to my original plan. The set-up was simple and didn’t require any new electronics; all I needed was my existing laptop and WiFi access.

The trade-off is that I lose perpetual, 24/7 mobile connectivity. When my laptop is turned off, I don’t receive calls; they go straight to my voicemail. But in a way, I find beauty in the solitude of living cell-free. Each night, I enjoy the luxury of escaping the world of ringtones, text messages, and telemarketers. No one can bother me now; I return calls only when I feel like it.

Living without a cell phone might seem inconvenient, but in many ways, it’s a more peaceful way to live. Having a mobile device with instant access to unlimited media–phone calls, text messages, music, movies, apps–would be a total drain on my life. I’m already suffering from digital sensory overload; I don’t need a smartphone to bombard me with more useless trivia.

So I’m finished with my cell phone for this year. My wife decided to keep hers, so I borrow her phone on occasion when traveling alone to foreign places. As for the other 95% of the time, I’ve done quite well without a cell. In fact, I’ve only had one minor incident in the last two months. While I was taking the train to visit my in-laws, I accidentally overshot my destination by 20 miles. It took me an hour and two train transfers before I got back to Taichung.

Why didn’t you call me, Hsinya asked, to let me know you’d be late?

I shrugged. No cell.

1 Skype is probably the simplest to set-up. Buy a subscription for unlimited phone calls, then get an online number. Skype currently offers 50% off the purchase of an online number with a subscription. Once it’s set-up, you can cancel your phone subscriptions and easily save $1000/yr.

2 I once worried about not being able to make emergency calls. Later, I realized that any unused cell phone without a data plan can still make free emergency (SOS) calls, even if you lack a SIM-card. So you can keep your old cell around for emergencies without paying the phone company.

3 There are definitely cheaper VOIP providers that will support open-source, but you’ll need more technical knowledge to set it up. Since Google Voice doesn’t allow you to receive incoming calls, it can’t completely replace all phones like Skype can.

The Freedom to Change Your Mind

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About 3 months ago, Hsinya and I left Irvine, hopped on a plane, and flew to Taiwan. We expected to return early March—then we changed our minds and decided to stay for an entire year.

By becoming a Greenimalist, I had opened up a whole new world of possibilities. With no baggage or burdens tying me down, I had no obligation to return to California. If I didn’t want to return in 3 months, I didn’t have to—I was free to go wherever I chose.

There’s something amazing about being able to change your mind. I’m not talking about being indecisive, but rather the ability to pursue new opportunities as they come. Too often, we turn down new opportunities—not because we choose to, but because our obligations force us to.

Your ability to change depends on how many burdens you carry. The more weight, the harder it is to pack your bags and leave. Possessions increase your weight, and so do long-term contracts and financial debt. Each one is a type of shackle on your freedom.

A house can be a great investment, except it weighs you down. A car could get you to work faster, except it weighs you down. A dishwasher, vacuum cleaner, and refrigerator are all great, useful stuff, but each one slowly takes away your mobility. You lose the freedom of being able to spend time with your family, move to a better job elsewhere, or volunteer on worthwhile work. Once you start making irreversible commitments, it’s hard to turn back.

Some obligations are totally worth taking on. It’s worth losing some mobility to have a family or to work on a meaningful job. But I refuse to surrender my mobility in exchange for more stuff.

Life is full of unexpected surprises. It’s impossible to predict what opportunities will present themselves 10 years from now. 10 years ago, I was still in middle school; cell phones were a novelty; and Google was a small company. I have no idea what the next 10 years will bring. All I know for sure is that the more mass I take on, the fewer opportunities I’ll be able to pursue.

Last year, I could never have predicted that I’d have such a great time staying in Taiwan, that my Grandpa would be happy to have visitors, and that I’d be able to find a solid church here. If I had kept all that extra baggage back in Irvine, I would have to return—like it or not—because the high price of storage was driving me back home.

But because I didn’t carry so much dead weight, it was easy for me to change my mind. And so I did.

This post was inspired by Less Mass from software company 37Signals. I took their unconventional guide for creating lean, mean web apps and adapted it for everyday life.