Getting around Minnesota: $4 gas and the rural economy

It should come as no surprise to anyone living in rural Minnesota that research by the Oil Price Information Service consultancy shows rural Americans are being hit harder by the high price of motor fuel.

Minnesota is no exception. Rural Minnesotans are more dependent on motor vehicles and must drive farther distances than people in suburban and urban areas. What, then, is the impact of $4 a gallon gasoline that has doubled in about two years?

Statistics going forward will show the results, and we may have passed a “tipping point” already in influencing consumer behavior if not necessarily the number of rural miles driven per person.

Steve Schneider, director of public works for Nobles County, live about three miles outside Worthington and drives to work at the county seat. He still commutes daily, he said, but everyone including members of his family is becoming more frugal.

He still buys the gas, he said. “But does my first-grader need a cell phone? I know where he is every day.”

The real behavior adjuster will be fuel shortages, Schneider predicts. “The way things are going that might be a blink of the eye away.”

As long as there is gas at the pump, however, people in southwestern Minnesota are likely to keep driving great distance to work, shop and play even though they may be consciously or unconsciously rationing how often they start their engines, he said.

That is consistent with informal research findings in west-central Minnesota from the Center for Small Towns at the University of Minnesota – Morris. Staff members at the center have conducted informal research at community meetings in recent years to learn more about rural Minnesotans’ mobile behavior. The findings, while not scientific, shed light on consumers that will impact rural economic development concepts in the future.

This is especially important because nobody believes energy prices are going back to comfortable levels of three, five and 10 years ago.

Before recent record setting price increases, rural Minnesotans generally have indicated they are willing to commute up to 45 minutes each way to jobs, travel up to one hour each way to go shopping, and up to two hours each way to play – recreation and entertainment, said Ben Winchester, coordinator of data analysis and research at the Morris center.

This is carried forward from doing “games” with audiences at conferences starting back when gasoline was closer to $2 a gallon, Winchester said. “The question I think we all have is when do gas prices change how we think and drive,” he added.

His colleague at the center, community program specialist David Fluegel, said rural Minnesota clearly has a driving culture that may be different from urban areas. Time spent in automobiles may not be significantly greater, but the number of miles driven is, he said.

Also blurring some distinctions, Fluegel said, is that a large number of rural Minnesotans consider shopping to be a part of play, i.e. going some place. Or, it is a combination shopping and play trip.

Key questions going forward will be how expensive gasoline and other consumable goods dependent on energy will become, and ways these higher prices influence where people live and how they ration their disposable incomes, said Winchester. At some point, people in rural areas will weigh fuel costs with per unit costs for basic goods that might keep people buying closer to home, he said.

In southwest Minnesota, people might still be driving as many miles to destinations but maybe already conserving on the number of trips they take, said Debra Hogenson, a private social worker consultant at rural Brewster.

Given limited shopping opportunities in the small cities around her, she does drive 45 minutes to go to doctors or to grocery shop at a fully stocked grocery store in Worthington, she said. Big shopping outings mean trips to Sioux Falls, S.D., about 1:15 hours away, or to Mankato, an hour’s drive, she said.

Leisure might include cultural trips to Sioux Falls or Mankato for stage plays and concerts, or to Marshall and Southwest Minnesota State University only an hour away, she said. And on occasion, it may mean the three- to four-hour trips to the Twin Cities for performances at Orchestra Hall and Children’s Theater (Minneapolis) or the Science Museum of Minnesota (St. Paul.) “Those are things we just don’t have out here,” she said.

Has $4 gas put a stop to those outings? “Not yet,” she said. But it is making the family more caution about the trips it takes. Meanwhile, she said, her family is becoming more energy conscious. Her husband is a farmer. ‘What we’re trying to do is figure out how to lower the number of passes (tractor trips) across the fields, with farm input costs going out of sight,” she said.

Household behavior is starting to respond by limiting trips, and will likely become even more cautious if gas prices continue to rise. That suggests we have crossed the so-called “tipping point” where people are watching how they spend their money and consume energy more closely.

For his part, Nobles County official Schneider worries that tight oil and gas supplies will spill over into shortages and not just stop at high prices. I worse comes to worst, he said, he could walk the three miles into Worthington. Or, he could ride one of the family’s three horses.

“Right now, I think supply should be a bigger worry than price,” he said.

As fuel prices continue to increase, it’s time for the state to begin seriously looking at alternative transportation solutions for rural Minnesotans. A Minnesota 2020 poll earlier this year indicated strong support for regional rail in rural Minnesota. Let’s start planning now, before it’s too late.