How to Get $1.50 Per a Gallon Price Back, Save US Economy, Stop Global Warming, and Solve US Government Problems

One and a half hours is my usual commute time to my current work place. It takes forty-five miles to get there. During winter storm it takes much, much longer... I certainly have enough time to listen to the Boston Public Radio (WBUR station), and my thoughts usually start with "WHY are we all sitting here?", slowly moving, wasting fuel, and finally contributing our share to the Global Warming... Good Morning (or Good Night) America on Wheels!

WBUR is not for the weak of heart. Domestic topics range from how big is a golden parachute for a CEO who failed to manage a bank or corporation (usually an eight digit number), to sliding dollar and looming recession ... All symptoms, all the information that could drive us crazy and push us out of our driver seats... Yet, I listen to my favorite radio station with great pride that we are still driving and going to our jobs to keep America moving ...

Our destination is clearly articulated. The verdict for all of us is "guilty"; we are guilty of not spending enough or not saving enough and, it seems as if no matter what we do "We are doomed!". But my Russian common sense forged in trenches of communism and hardened by capitalism is refusing to give up. There is a proverb from my old days "Saving life of a drowning man is the business of that drowning man!" Since I cannot separate myself from the rest of us sliding in to recession, I find myself thinking how to stop that. I have enough time; say a couple of weeks to find a solution. Otherwise, this contract with the bank will be the last of what I could get from this economy. Well, unemployment is still guaranteed, but it will not cover all my recent acquisitions and multiplying loans (Note: nobody can blame me for not spending enough to keep our economy running; I am a patriot after all!).

I am a deeply technical person. I am thinking in technical terms, and always trying to crunch through the numbers. How many of us are commuting every day? In fact, an overwhelming majority of people between 20 and 60 years old do, roughly a half of US population of 300 million. The analysis [1] gives us a number of 220 million. What is the average commute? It is approximately 16 miles one way. Expecting 20 miles per gallon, we consume about 300 million gallons of gasoline for the nation's one working day commute. It takes up nearly 75% of the total US gasoline consumption according to at least two sources [2, 3]. These numbers represent quite rough estimate, and relate to gasoline only (there are also kerosene and diesel fuels), but we do not need exact numbers. It answers the question of who consumes most of the gasoline. We do! And we do that by commuting. Subsequently, commuting is a source of increasing fuel demand and pricing, air pollution, traffic creation, cause of political instabilities and intrigues around the world, etc. This list can go on and on for quite some time.

So what if we stay at home and work remotely (telecommute)... First question is how many people are doing that, and for how many days per week? Google search for "telecommuting in US 2006" brings up pretty diverse information. The estimate ranges from 12 millions full time in 2006 (5.4% of working population) to more realistic 2% full time and 9% part time [5]. I observe the latter number of 2% in the bank department that I'm working for.

Well, we are not making much progress in telecommuting field. Good old UK was doing much better back in 2002 with telecommuting rate of 7.4% [6]. Another question is what is the percentage of workers who can telecommute without negatively impacting the business process? I did not try Google to find an answer to such a sophisticated question. What I see from my personal experience of IT professional, at least 50% of office work can be done at home. At my consulting job, I see some of my colleagues once in two weeks, if I walk by. Otherwise, I do my work glued to my computer monitor, exchanging information via email and internal chat system. We do remote conferencing and project management. I do it in the same way as many of you do every day.

I would like to set the following goal "Everybody who can stay at home and do his or her job remotely should do that!" As we transition more and more toward "service" economy, we have a chance to eventually move everybody out of the main office, or at least 90% of us sitting in a computerized cage and laying golden eggs by processing information.

Both government and business establishment generally agree that telecommuting is a good thing. That is all. The mutual agreement is that a good thing is good. Nothing more, nothing less. There hasn't been a real concerted push toward telecommuting. Not even close.

Here is my proposal on how to move things forward. As all of my proposals, it is real, and it is doable. First of all, we need a technology to support telecommuting. The most of it is already in place. Internet infrastructure (many thanks to Mr. Clinton and Mr. Gore) is available across most of the US. Computers are really inexpensive (about $600 for a telecommuting-ready system). There is IPSec VPN, and even better SSL VPN to connect to the main office. We might need an integrated solution out-of-the-box, which would be easy to install as in "VPN plug-and-play". However, I would like to stress that we already have all the necessary ingredients to get started.

Secondary, we need to encourage all the US businesses to implement telecommuting as a solution as soon as possible. Here is the trick. I am proposing for US Congress to pass a legislation requiring all employers to pay for their employees commuting fuel expenses. That is it - an average of $1,200 per employee per year. I name it "Commuter Reimbursement" (CR).

Logically, why should WE pay for our commute in the first place? Commute is often not an important consideration when businesses choose their location. There is neither government nor business supported program for decreasing commute, thus saving OUR money. They simply do not have a strong incentive to care. We, commuters, do, and Global Warming and air pollution is a big concern as well.

I am not buying an argument that $1,200 will be an unbearable burden to US businesses. The credit is on the order of annual salary raise. Median income per US household member [7] is about $27,000, thus CR represents only 4.4% of it. After all, according to David C. Johnston "Free Lunch" [8], US corporate management owes us the salary rise since mid 70s, so please, be kind and give it us once in 30 years, thus indicating your participation in our mutual struggle with the rising fuel cost and inflation, Global Warming, pollution, you name it.

There is a good indication that CR will work. We all know how business management likes to save pennies (moving the bounty to golden parachutes), this price tag will work very well to encourage progress; I mean moving to real telecommuting with the goal of getting 30% or more of the US workforce working remotely.

How do we implement CR? I can think of several ways, but let's leave it to the US Congress to figure it out. I got an idea, and they need to do their share as well. Hopefully, they will not invent a way to make it completely useless, so we don't end up paying our employers for our commute!

How long would it take to implement? Considering that almost everybody is winning (see below), I would optimistically expect CR Law passing within one year. Thus, at the end of the second year we can expect a moderate reduction in commuting at 30%, with the year average of 15%. The price for the oil will drop possibly returning to $30 per barrel. The gasoline price will return gradually to $1.50 per a gallon (average for this year of $2,25). Thus, average CR for the second year will be around $750. For the third year we can expect it dropping even more to approximately $400, given that number of commuters stays the same. However, we should expect it to be slowly decreasing. As you see here, there is market self-regulation - initial CR of $1,200 should be dropping, and CR and the price of the telecommuting installation will regulate the number of telecommuters. This is a normal market regulation when we have enough resources, not the extreme we have now when any speculation fuels the market and drives price up continuously.

Let's see who will be the winners. Of course, we, commuters, will win as well as all the people in the US and around the world. Businesses will make CR money back very soon (decreasing office leasing expenses), or significantly decrease the payment. I would expect at least 30% reduction in traffic (no traffic jams any more), and 30% less total US consumption of gasoline. That would be out real contribution to solving the Global Warming problem.

All the US population will win saving money, and our economy will bloom again.
US global interests will also be a big winner. Hugo Chaves (small but continuing headache) will lose as Venezuela cannot survive with less than $60 per a barrel, and outgoing Russia's President Mr. Putin will lose a lot of his power as well. Putin has been busy helping Russia flex muscles against the West in the last few years, mostly by leveraging increasing Russia's oil revenues. No more this sly Russian former spy and dictator will have funds to develop new missiles and nuclear submarines. Russia economic success of last few years had been squarely based on high oil price. If it drops, Russia's government ambitions of Great Resurrected Russia will deflate as quickly as they did during USSR collapse.

Who else will loose? Of course, oil companies which were too slow to embrace alternative energy. Global Islamic terrorist network will suffer money shortage, as Middle East tycoons loose a substantial part of oil revenues. Somehow, I don't think our nation will shed too many tears for them.

Does US Government have enough guts to move forward with my telecommuting incentive plan (i.e. legislating a $1,200 "Commute Reimbursement" plan)? Possibly not, if we are just talking about out commute problems and Global Warming; but it might change to "yes" considering that this plan can resolve its political problems as well.

Some people would say that the proposed solution is a temporarily one. Yes, but we need it now, we need to start cutting out fuel consumption now, otherwise WBUR and all the economy doomsday experts are going to say "See, we told you, the recession is coming...And you did nothing to stop it...".

Self-advertising: Does my idea intrigue you? I have a few more. Interested parties, please feel free to contact me mutin@rubos.com.

References:
1. Gary Langer. Poll: Traffic in the United States. Feb. 13, 2005. ABC News.
2. Clean Cities Program Saved US One Day's Gas Consumption in 2006. Environment News Services. http://www.ens-newswire.com/ens/oct2007/2007-10-01-097.asp
3. How much gasoline does the United States consume in one year? http://auto.howstuffworks.com/question417.htm
4. Earn well, leave cheap. May 22, 2006. Les Christie, CNNMoney.com. <http://money.cnn.com/2006/05/11/real_estate/men_at_telework/index.htm
5. Most With Option to Telecommute Prefer to Drive. June 13, 2006. News Report. <http://www.govtech.com/dc/articles/100192
6. Telework in the UK: Who's doing it? <http://www.flexibility.co.uk/flexwork/location/telework-2002.htm
7. Houshold income in the United Stats. Wikipedia. <http://en.wikipedia.org/wiki/Household_income_in_the_United_States
8. David C. Johnston. Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill). Dec. 2007.

Authors: Daniil M. Utin, MS, Mikhail A. Utin, Ph.D.

Copyright (c) Daniil M. Utin, Mikhail A. Utin, 2008

Contact information: Mikhail A. Utin, Email: mutin@rubos.com; Daniil M. Utin, dan@cidc.com