Gerald Broflovski is driving a new hybrid car and all he can do is go around showing it off. He hands out awareness citations to all the SUVs he finds in the hardware store's parking lot. When he gives one to Randy and Jimbo, he gets called out for being too smug and loving the smell of his own farts. Gerald decides he can't live in a town with "ignorant idiots," and after talking with Sheila they decide to move to San Francisco. Cartman is holding a party to celebrate Kyle's departure (Kyle naturally is not invited), which is how Stan finds out he is going to lose his best friend. Stan goes to Kyle's house and finds out why they are leaving. In San Francisco the Broflovski's find their new home and meet their progressive, but very smug neighbors. Back in South Park, Stan tries to write a song to get everyone to buy a hybrid and Cartman has substituted Butters as his substitute Jew. At KXUV 98.7 FM radio the DJ plays Stan's song "Hey People You Got to Drive Hybrids Already." Well the people get the message and now everyone in town is driving a hybrid and being smug about it. South Park is the city with the highest percentage of hybrid owners in the country and Stan gets an award for his effort; but all he really wants is for Kyle to come back. On his way home Ranger McFriendly assaults Stan and points out the damage he has done to the environment. There is a cloudy layer hanging in the atmosphere of town, the ranger points out that the clouds aren't smog, rather it is smug from the self-satisfied garbage the citizens have been spewing into the air and too much smug in the air leads to "global laming." South Park is now the second smuggiest city in the country.
The news reports on the "Smug Alert!" in South Park, as well as a developing system in LA as well as the smuggiest city in the country, San Francisco. Kyle and Ike hang out with the neighbor kids and find out that they only way to deal with their smug fart-loving parents is to drop acid. Cartman decides that Butters makes for a lousy Jew. The ranger takes the boys to the news station, where the Smug situation has gotten a lot worse. The smug cloud over South Park is getting bigger and drifting west, where it will join with the San Francisco cloud. Unfortunately, the two will be joined by a smug cloud that originated from George Clooney's Academy Award acceptance speech. When all three of them come together, they are going to create a "perfect storm" of self-satisfaction. The effect of which will wipe out San Francisco, which causes Cartman to take notice. The town is warned about the coming storm and they decide to take action to stop it, they are going to destroy all their hybrid cars. Clooney's cloud has crossed over into Arizona and is on its way, meanwhile outside of the city limit of San Francisco Cartman dons a bio-suit and slowly makes his way into the hippie-laden San Francisco to warn Kyle and his family about the coming storm.
The hybrids are being destroyed by Stan, who is being forced to work the machinery; meanwhile Cartman is working his way through the streets of San Francisco. The last hybrid is destroyed, but it is too late the Clooney cloud has joined with the other clouds and created the perfect storm. Cartman finds the Broflovski house and manages to get them out. The next day after the storm has passed the Marsh family watch news reports that say that thousands have been left homeless, major cities have suffered a lot of damage but will ultimately be alright; only San Francisco has "disappeared completely up its own asshole." Randy tells Stan that he is sorry that Stan's gay little song killed Stan's friend. Clyde comes over with news that Stan needs to see, the Broflovski family has returned to town. They were rescued by a guardian angel. Now the town needs to rebuild, after everyone gets a new car. No one is planning on getting a hybrid, although Kyle points out to them the cars themselves don't generate the smug, it takes people to do that. Cartman is relieved that Kyle is back.