The Return of $4 Gas and Other Woes

It is obvious that gas prices are rising quickly again.  In 2007-8, I wrote several posts on the prospects of gasoline hitting $4-$5  per gallon – you can read those posts here, here, and here.  We were well on the way to those numbers in the United States, and then the bottom fell out of the economy on a global scale.  Gas prices fell quickly back to under $2 per gallon.

Now the trend is in the opposite direction again.  There is no gas shortage — we actually export gas and other petroleum products to other countries.  We have a surplus of gas in the United States, and yet gas prices are rising again.  I am not an economist or an energy expert, so I’ll skip the explanations for all of this, but the truth is, gas is going up again.

While I thought the impact on churches three years ago was going to be significant, I now believe the impact on churches may be catastrophic.  Here’s why I think this time the situation is worse.  In 2007-8, as gas prices rose driven by the futures market, the US and global economies were growing and stable.  The subprime mortgage securities crisis had not yet hit, despite rumblings from some investors and economists.  Employment was high, unemployment was low, jobs were being created, and the prospects for the future looked bright.  So what if gas hit $4, we’d just suck it up and keep going in our SUVs.

Of course, things were much worse than anyone imagined.  To prevent a global depression, Wall Street had to be bailed out, along with the world’s largest banks and financial insurers like AIG.  Add to that 2 of 3 US auto manufacturers, and you have  a recipe for difficult days financially.

What does this have to do with churches?  The rise of fuel prices will drive increases in the costs of other consumer goods and services.  With unemployment at 8.8% — although some economists estimate the “real” unemployment rate at close to 15% — more Americans are out of work, not counting the ones who are under-employed, or employed on a part-time basis.

There is no doubt the federal government is going to reduce spending beginning now, which will lead to the termination of many government programs, and further unemployment.  Fewer services will be provided by government in the near future, including (if Paul Ryan has his way) major overhauls of Medicare (medical care for the elderly), and Medicaid (medical care for the poor).  The Federal Reserve is also making noises about raising interest rates due to fears of inflation fueled by rising prices.

All of this will have the following impact on churches:

1. Church members will have less discretionary income and will contribute less to charities, including churches.
2. As gas prices rise, most of us will curtail our driving habits which includes multiple trips to church in separate family vehicles.
3. More Americans will lose services that are now publicly available.  There will be increased need for churches to do more to feed, house, care for, and assist the elderly, the sick, and the poor.
4. Church budgets will suffer from the double impact of falling contributions and rising needs.

What point am I trying to make?  Get ready.  Begin now to prioritize your church budget.  Decide what your church is really going to be about.  Prepare mock budgets based on different scenarios which emphasize different ministry priorities.

I believe that we will see single cause churches, much like we have single cause non-profits.  There will be churches that focus on senior adults, or single parent families, or families with special needs children.  Why?  Because smaller churches especially will be unable to “be all things to all people.”

We are on the front end of this economic realignment.  Churches, I believe, have an obligation theologically to make the tough choices to minister to the most vulnerable in society, even if the popular political position is the opposite.  We will soon face those choices, and because we are approaching another presidential election cycle, do not expect solutions from either major political party until at least 2013.  What do you think?  Will rising gas prices and other factors impact churches? Why or why not?