Why I Love $7.41 per Gallon Gasoline

By Jon Miller | Post Date: June 1, 2008 3:14 AM | Comments: 6

That's what I paid recently to fill up the tank of a rental car in Europe. I look forward to the day when we will have $8 per gallon gasoline in the U.S.A. Howls of protest from people who are struggling with the rise of prices on basic goods aside, in the mid and long term there are some massive benefits we can realize from sustained a sustained high level of gas prices.

1. Revolution of awareness. If you Google "saving energy" there are many articles and ideas these days. For example the Oregon Catalyst offers ten tips for saving gas . This sort of grass roots level and common sense knowledge of how to save energy is being elevated to the mass consciousness and this is a great thing. The parallels of educating everyone about lean, the elimination of the 7 wastes and involving everyone in kaizen should be obvious. The U.S. Air Force is finding the high oil prices hard to bear, and they are an organization with the clout to raise awareness and bring about change in policies at the highest level of government for investing in alternative fuels. According to a May 21, 2008 Wall Street Journal article:

The problems are particularly acute for the Air Force, which uses about 2.6 billion gallons of jet fuel a year, or 10% of the entire domestic market in aviation fuel. The Air Force's fuel costs neared $6 billion last year, up from $2 billion in 2003, even as its consumption fell by more than 10% over the same period because of energy-savings measures, including a campaign to shut off lights and lower thermostats at bases.

At a more personal level, it has been great to have clients listen when we talk about energy as another type of loss that can be recovered through kaizen activities. We promote energy audits where the focus is not on the people or material flow but the energy flow through the equipment, physical infrastructure and facilities. It's amazing the amount of energy wasted in light, heat, inefficient motors, equipment left running and many more reasons. The awareness that was lacking in the past is there now, and more companies are finding ways to measure these losses.

2. Alternative energy. For a long time alternative energy was seen as a poor substitute to "the real thing" as "alternative" implies. But it is just a matter of technology and time to make wind, solar, tidal, geothermal and other energy sources practical and affordable. History has shown repeatedly that what was hard to imagine decades ago is taken for granted when technology catches up with the idea. Take cold fusion for example, which may be an outrageously great alternative energy, if recent experiments prove out. Alternative energy should be re-branded as "renewable energy", "clean energy" or even "next energy". If we wanted a name that implies safety, better quality, availability and lower cost we could even try "lean energy".

3. Investment in mass transit infrastructure. The U.S. is the world's #1 economy with the worst rail, bus and subway infrastructure in the world. We can make excuses about geography and history, or we can use this opportunity get the job done. Let's build railways and rail cars. Beyond the benefits of access and convenience, economic stimulus, and reduced environmental impact, good mass transit offers another benefit: learning and personal improvement. When commuting alone in a car for 1 or 2 hours per day, your choices for personal development and learning are limited to radio (no help there) and books on tape. The Japanese publish and read twice as much for a population half of the size of the U.S. A major contributor to this is the time available to read on trains or buses. Imagine the resulting improvement in our education level if adults or youth of driving age spent 20 minutes each day reading on mass transit.

Just like the second oil shock in 1973 brought the Toyota Production System to light when the Japanese government became aware that Toyota alone was turning a profit regardless of record prices of imported raw materials, I have hope that this latest oil shock will raise the awareness of how we can kaizen our energy use. It took more than 25 years after the first oil shock for lean to become mainstream. We don't have 25 more years to figure this out so let's get to work.

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