Chattanooga: $4 gas will pinch rural America most

Rural Americans in the South are in for a world of hurt as gas prices continue to rise, economists say.

That grim prediction comes a day after the national average for unleaded gas surpassed $4 a gallon for the first time in U.S. history. On Monday, Tennessee’s average remained $3.86 a gallon, while Georgia was just a penny below $4, according to AAA.

Economists agree the rural South will find it increasingly difficult to make long commutes in gas-guzzling trucks and sport utility vehicles, which has been a way of life for generations.

“In larger metropolitan areas, development is much more compact and there is mass transit and carpooling,” said Dr. Matthew N. Murray, an economist at the University of Tennessee. “But in the South and in rural areas, we are laboring to make the 20- to 30-mile commutes. We also have bigger vehicles here — trucks and SUVs.”

In the past, many Americans chose to live in rural communities because home prices were cheaper there, and the cost of gas was just something to endure, said Dr. Malcolm Getz, a Vanderbilt University economics professor.

“At one time, that was a good trade-off for them,” Dr. Getz said. “But now those people are going to see their home values fall as more people decide the commute is too expensive.”

The rapid-fire increase in gas prices wasn’t on most economists’ radar, Dr. Murray said. Demand for gas recently began to dip in the United States, but overseas factors drove these latest increases, he said.

“What we’ve got is a fivefold energy price increase in a very short period of time,” Dr. Murray. “The magnitude of the growth and demand in China and India has been surprising. On top of that, there’s the decline of the dollar, so speculators are buying oil futures, and that’s driving up cost, too. There are very complicated forces here.”

But Dr. Murray hopes gas prices will stay in the $4 range.

“I don’t think we are going to get to $5 a gallon, I certainly hope I’m right,” Dr. Murray said.

But that hope isn’t shared by some motorists.

“We’re going to see $5 gas by the end of July,” predicted John Schoonmaster, who stopped in Chattanooga on Monday while traveling from Florida to his home in Indiana. “There’s no alternative to paying it, though.”

Matt Darland, who was traveling from Florida back to his home in Michigan, said an emergency trip to assist his daughter with a broken-down car in Florida will be their only vacation this year. He and his wife drive a combined 120 miles round-trip for work every day.

“We’re not doing any extras,” Mr. Darland said. “We’re lucky that we have good-paying jobs.”

Economists say it’s a good thing Mr. Darland and Mr. Schoonmaster are preparing for the high gas prices.

“The likelihood of us getting back to $3 a gallon is pretty remote,” Dr. Getz added. “We are going to see these energy prices sustained, by and large, and that’s going to have implications for the way we do business, the way we live our lives.”