[Postscript: I wrote this article last week and with all the numbers in my mind I commented on a BBC site about petrol prices. I was called up and asked to speak on Radio 5’s late night ‘Let’s have a heated debate‘ programme and speak in favour of increasing petrol prices: surprisingly they were having trouble getting people to volunteer. I was extremely nervous and managed to say a couple of sentences trying to appear less mad than other people who had been lined up to support petrol price rises, but I am not sure I managed. Anyway, if it happens to you: my advice is to say ‘No’! I was later called and questioned by a BBC journalist who wrote this.]
Browsing the LA Times I noticed that petrol(gasoline) prices are causing pain in the USA, and I wondered just what happens when petrol prices rise. Do we drive less? Do we trade in inefficient cars and buy smaller models? Or do we just complain and hope someone will lower the price. Thinking about these questions, I wrote a spreadsheet (Link here) to help me think. And I would like to share three calculations with you.
1. What is the equivalent cost in pence per litre of gasoline at $4/gallon?
- 1 US Gallon is equal to 3.785 litres
- 1$ is worth approximately 62.5 pence (at £1 = $1.6)
So putting these together we find that $4/US gallon = 250 pence/3.785 litres which is 66 p/litre – roughly half the cost in the UK!
2. Does it make economic sense to buy a new car? I worked out the cost of travelling 10,000 miles a year which corresponds to travelling just 23 miles to work on 220 working days. Many people travel much further. As an extreme example, let’s compare Car A which gives 30 miles per gallon (mpg) with Car B that gives 60 mpg.
- At £1.20/litre, Car A costs 19 pence per mile and Car B costs 9.5 pence per mile.
So one would save 9.5 pence for every mile driven, or £940 per year. To me that doesn’t seem like quite enough of an incentive to invest, say, £10k in a car.
3. Does it make ecological sense to buy a new car? Considering only carbon dioxide emissions, the calculation no longer depends on the price of fuel, but the type of fuel does make a difference. Diesel fuel has longer hydrocarbon molecules than petrol, with more carbon-carbon bonds and so has a higher energy density. Burning 1 litre of diesel emits 2.6 kg of CO2 while burning 1 litre of petrol (gasoline) emits 2.3 kg of CO2.
- If Car A is a petrol car it would emit 3.5 tonnes of CO2 per year and if Car B is a diesel, then it would emit 2.0 tonnes of CO2 per year
Wow! That is a reduction of 1.5 tonnes of CO2 per year, and that really seems like it would be worthwhile saving!
Putting these three calculations together we see the problem: Even though UK fuel prices are twice the level of prices in the US, they are still not high enough to allow people to make rational economic decisions that also make ecological sense.
Of course I have ignored many factors, including the carbon embodied in the manufacture of a car. The Guardian tells me that the Citroen C1 has 6 tonnes of embodied CO2, The Ford Mondeo has 17 tonnes of embodied CO2, the Landrover Discovery has 35 tonnes of embodied CO2. Looking at the prices of the base models in each of these ranges (£7,000, £18,000, £34,000) it seems that the base model price correlates with amount of embodied carbon:
- Each tonne of embodied carbon adds about £1,000 to cost of the base model of the car.
Surely that can’t be a coincidence!?
The spread sheet is an .xslx file and can be downloaded here