Nobody expects the recent gas price reprieve to last, not with turmoil in the Middle East and Japan and the summer travel season looming. But not everybody laments gas prices eyeing $4 a gallon.
The usual winners -- oil companies, refineries, bike shops, Marta, dealers who sell fuel-efficient cars -- should see fatter bottom lines. Yet other, unlikely beneficiaries also stand to gain from consumers' pocketbook pain.
The state of Georgia, for example, will likely reap higher gas-tax revenues this summer. Rail freight companies Norfolk Southern and CSX can expect more traffic at the expense of diesel-fueled trucks.
Higher gas prices could finally translate into a sustainable market for Georgia’s alternative energy industry. Local resorts and amusement parks should lure more travel-averse customers.
Ultimately, American consumers across the board could benefit from higher gas prices. More tax revenue could lead to better roads. Fewer diesel-belching trucks translates to cleaner air. Gas-sipping motorists drive slower and crash less. Physically fit bikers and walkers consume fewer costly health care services.
And, finally, a shift from gas and diesel to home-grown energy, i.e. ethanol for cars and biodiesel for trucks, could lessen dependence on Middle Eastern oil and -- who knows? -- ensure lower prices in the future.
Monday, the average price of a gallon of regular gas in Georgia stood at $3.425. If it rises, as expected, here’s a list of unlikely beneficiaries:
The State of Georgia
In addition to a fixed 7.5 cents per gallon state excise tax and an 18.4 cents per gallon federal excise tax, the Department of Revenue collects an additional four cents on every dollar motorists pay at the pump. Last month, the state collected $36.2 million in motor fuels sales taxes, up 8.2 percent from February 2010.
The rate is set every six months. Expect to pay more this summer. The current rate, on the books until June 30, is based on last November's prices, which averaged $2.534 a gallon. Revenue officials will soon recalibrate the rate.
“We would expect, based on current pricing, to see the rate go up,” Kenneth Heaghney, the state's fiscal economist, said Monday.
Three-fourths of that revenue goes to the state Transportation Department and, typically, builds roads.
Trains
Train traffic to and from the port of Savannah is booming. Last month, Norfolk Southern and CSX hauled 23,164 containers through the port’s gates, a 27 percent increase from the previous February.
“The [Georgia Ports] Authority has experienced a significant increase in rail activity, which has coincided with the increase in fuel costs,” said Curtis Foltz, executive director of the agency.
A spokeswoman for Norfolk Southern credits the improving economy for much of the uptick in business. The Association of American Railroads, though, says that “a train can take the load of 280 or more trucks off the road.”
Alternative energy
Ethanol and biodiesel producers have been hammered in recent years by lower gas and diesel prices, unpredictable government mandates and consumer indifference. More than a dozen ethanol and biodiesel makers across Georgia shut down the last two years, unable to compete.
But now, they're poised for a comeback. Oil is nearing $100 a barrel, a bumper corn crop promises cheaper inputs, and Congress extended tax credits -- making the renewable energy industry cautiously optimistic.
“It’s unfortunate that it takes rising fuel prices to remind Americans that we are an important part of America’s energy security,” said Bobby Heiser, a partner in BullDog Biodiesel in Ellenwood. “We can help keep costs low.”
BullDog is re-starting production and expects full production by July.
Local resorts
Spring-breakers and summer vacationers cringe at rising gas prices. Historically, closer-to-home resorts such as Lake Lanier Islands and Stone Mountain Park welcome more customers when the alternative is to spend hundreds of dollars to visit Florida beaches or northern cities.
“The last time gas hit $4 we saw an uptick in our recreation business overall,” said Grier Todd, chief operating officer for Lake Lanier. Higher fuel prices “impact the price of airfare too.”
Todd and a Stone Mountain spokeswoman said it was too soon to tell whether the current rise in gas prices has boosted business as their busy seasons are just under way.
Health care
Driving slower saves gas, money and lives. A study by the University of Alabama and Harvard Medical School shows that driving fatalities are reduced 2.3 percent for every 10 percent increase in gas prices.
Other health benefits accrue to higher gas prices. Charles Courtemanche, an economics professor at the University of North Carolina at Greensboro, recently published a study showing that a sustained $1 increase in the price of a gallon of gas results in a 10 percent drop in the nation’s obesity rate.
Americans who walk and bike more often and eat at restaurants less often will suffer fewer obesity-related diseases. Every $1 uptick in gas prices saves 11,000 lives and $11 billion in health-care costs annually.
“About half the bill for obesity is borne by the government via Medicare and Medicaid,” Courtemanche said. “If obesity declines, then taxpayers could end up benefiting.”
