Editore"s Note
Tilting at Windmills

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May 9, 2008
By: Kevin Drum

OIL PRICES AND DRIVING HABITS....So how much have Americans cut back on driving in the past few months? Here are a couple of data points.

First, on the right, is the weekly amount of motor gasoline produced in the United States as a percent of the amount produced in the same week last year. If you sum up the first 18 weeks of the year, gasoline production in the United States is down about 0.7% compared to the same period last year. This is a pretty rough measure of gasoline consumption, but still suggests that high prices have had only a fairly modest effect.

Second, via ThinkProgress, is a USA Today chart taken from Federal Highway Administration data. It only goes through February, but it's a more direct measure and suggests a reduction of about 5% in total miles driven. This is nothing to sneeze at. Sure, considering that gasoline prices have gone up about 50% since the beginning of last year, even 5% might not seem like much of a reduction. But if you add in population growth, it means that per capita miles driven is down about 6% compared to last year. If you then compare it to the 1.5% annual growth we've been experiencing for the past decade, it means that per capita driving is down about 7-8% from its trendline. That's the first time this has happened in a long time.

Still, there's a caveat. In Los Angeles, for example, driving is down and use of mass transit is up. But will it stay up?

Not everyone who switches to biking, walking or carpooling will stick with it, MTA spokesman Dave Sotero said. The MTA usually sees a temporary increase in riders when gas prices reach certain thresholds, like $3, $3.50 and $4 a gallon, he said. Then ridership goes down once people become accustomed to the higher cost.

If oil really does go up to $200 per barrel, maybe MTA will finally be able to hold on to a few of those new riders.

Kevin Drum 12:23 PM Permalink | Trackbacks | Comments (51)

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Comments

There is no doubt that gasoline will go up to $200 per barrel. The only question is when. This year? Next? 10 years from now.

Posted by: slanted tom on May 9, 2008 at 12:30 PM | PERMALINK

That's crude oil to $200 per barrel. And '10 years from now?'

Posted by: slanted tom on May 9, 2008 at 12:32 PM | PERMALINK

A lot of the talk about people not changing their behavoir instantaneously ignores the fact that most people can't make radical shifts in their driving behavoir overnight. Most driving is non-discretionary as people's lives are currently set-up. You live where you live, you work where you work and the services you need are located where they are in relation to both (and you also own the car you own). It is easy to tweak the above somewhat, but for the most part, there's not a whole lot of options for most people (some people can ride their bikes to work, but not most; some people can take mass-transit where available, but mass transit systems are already overloaded where they are well designed; car pools take time to develop).

Now over the long term, people will make life choices that reflect the cost of driving in buying new cars and new houses and taking new jobs, but these aren't the kinds of things that happen overnight.

Posted by: Doug-E-Fresh on May 9, 2008 at 12:37 PM | PERMALINK

I guess demand isn't as inelastic as economists claim. Supply, however, seems to be extremely inelastic. The case for the gas tax holiday just got worse, if that was even possible.

Posted by: fostert on May 9, 2008 at 12:38 PM | PERMALINK

You know Kevin, you could probably make some extra cash by hitching Inkblot and Domino up to a pony cart and have them deliver multiple passengers to their destinations. At say, $5 a trip and 10 trips a day, 6 days a week that's $300/week. Not bad!

Posted by: optical weenie on May 9, 2008 at 12:39 PM | PERMALINK

Here's another question: is public transit ready to accommodate a permanent and significant increase in ridership? Here in Portland, the answer is no, at least in terms of the daily commute. I believe you'll find the same situation around the country, where trains and buses are running close to or at capacity during rush hour. Whatever excess capacity exists is on the off-peak service, evenings and weekends. Are Americans ready to start shifting their work hours as well?

Increasing capacity is capital-intensive and relatively inflexible. In other words, yes, they can increase capacity but it costs a lot of money to buy new vehicles and there is a significant lag time before delivery. And, of course, someone has to drive and maintain those additional vehicles.

Posted by: gummitch on May 9, 2008 at 12:49 PM | PERMALINK

I can understand that a lot of people would find the transition to mass transit uncomfortable.

Your car is your own little domain; you can do anything you want with it.

I've had commuting experiences in NY/NJ where rush hour trains are typically standing-room only, and often your packed as tight as you would be at any punk rock concert. Is that guy you're pressed up against a child molestor? An asshole? You don't have any choice about what kind of person you want to sit/stand next to, because there's no where to go, anyway. When the train pulls up, it can be a smoosh just to step into the car, or there can be no room for any more people at all.

If it looks like gas prices are going to stay up, the first thing mass transit should do it change its infrastructure to make accomodating a few more passengers a little more comfortable, and congress should consider using its power to persuade big employers (say, offices) to make employees' hourse a little more flexible- change some middle managers' schedules to accomodate people who want to arrive and leave earlier, or later, than the usual 9-5.

Outside of these few experiences, though (and probably outside of super-metropolis areas like NYC/northern NJ and LA), I think commuting by mass transit or bike isn't as bad as a lot of people imagine, and more people should give it a whirl. That early-morning bike-ride or train-ride will add a new dimension to your day, and it might be just the thing to perk up your life a little bit. It's too bad how many people are never really outside or never get to chill out on a train/subway because they're always in the gridlock.

Posted by: Swan on May 9, 2008 at 12:50 PM | PERMALINK

Most driving is non-discretionary as people's lives are currently set-up.

Yes and no. I live in a city and I walk to work, but along the way I see plenty of people driving in from the suburbs through my neighborhood, usually one to a car. Those suburbs have commuter rail lines going to them, and easily 50% of those people would have a much shorter trip to the nearest train station than to anywhere in town. Hell, I know people who'd have less than .25 mile to walk total on either side to take the train in that choose to drive in.

I used to think I needed to drive to get to and from work, to go shopping, etc. And then I changed my life around, and I don't have to. Other people can, too. Maybe not everyone, but probably a lot more people could than you'd think.

Posted by: phleabo on May 9, 2008 at 12:55 PM | PERMALINK

I think some of this may take some time to make it into the statistics.

I use myself as an example.

I commute about 30 miles to work every day in a car that gets about 20 miles per gallon.

In order to cut back, I will need to either move closer to work or buy a new car. Neither of these options is an immediate possibility, because one will involve breaking a lease (which is still more expensive than the commute, I did the math) and the other involves buying a car, which I don't have the money to do.

However, when my lease is up, I am moving much closer to work. I am also saving up to buy a hybrid. So: My mileage really hasn't changed YET, but it will.

And as a supposed environmentalist, this really isn't a bad thing. It was pretty hypocritical of me to live so far away and use a modestly gas guzzling car anyway.

Posted by: BombIranForChrist on May 9, 2008 at 12:55 PM | PERMALINK

Optical Weenie, they should hook up all those people who work for the federal government and who won't catch Bin Laden up to some oxcarts to pull people around. They'll be a lot more useful there than spinning their notebooks on top of their pens and cracking jokes about liberals all day long, like they've been doing since 9-11-2001.

You'd think someone would have wanted to spend the time to learn to speak and Pakistani or Arabic sometime over the past 7 years so it will be easier for us to catch these folks, but I guess all the serious pros we have working in national security are mostly the types who consider Pakistanis too revolting for a serious white person to actually get as close to them as learning their language. I mean, look at George Bush- he berely steps off of the plane when he visits a country that is mostly non-white.

Posted by: Swan on May 9, 2008 at 12:56 PM | PERMALINK

Then ridership goes down once people become accustomed to the higher cost.

Ridership goes back down because the built environment in most of the US makes using mass transit inconveniently time-consuming. And transit will stay inconvenient for most until SFH suburbs start being plowed under.

Posted by: PeakVT on May 9, 2008 at 12:57 PM | PERMALINK

Gummitch, I think there is room for more trains and buses, but the owners just don't have enough respect for the commuters to add a train or a bus so you won't have to be pressed up against some different perfect strangers every day. They won't change it until more people start complaining about it, and stop settling for being treated that way.

What people should really do is organize a general strike to protest the gas rpices and the shitty mass transit infrastructure.

Posted by: Swan on May 9, 2008 at 1:03 PM | PERMALINK

Swan,
Thanks for the insult. FU.

Posted by: optical weenie on May 9, 2008 at 1:04 PM | PERMALINK

If you want to hold on to transit ridership, making the system more comfortable sure helps. The most stunning thing about the transit system in the netherlands, for example, is that its clearly designed for the middle class. The level of service is great and its fast, but its also that the seats are comfortable, the vehicles quiet and smooth, and you never feel like you're slumming. It doesn't have that "soviet" feel so much transit in NA does.

In fact the trains have two classes of seating, which even from a lib-left point of view makes sense; you can get work done with a small table, doctors can take transit and feel good about it. So nobody thinks driving has more status attached to it; ridership is around 50% of the modal share as a result.

Its that economy of scale, more than pop density, that makes a really good system affordable. If you have 10x the ridership, it has the same effect on service costs as if your city was 10x as dense. Its the *ridership* per square mile that counts.

Posted by: Bruce the Canuck on May 9, 2008 at 1:05 PM | PERMALINK

I have some experience with the LACMTA, and let me tell you, people don't go back to driving when they get used to gas prices; they go back to driving when they get used to the service provided. A couple weeks spent standing around waiting for the privilege of being packed onto a 1980's vintage
bus with flakey A/C will make you reevaluate what you consider to be expensive.

Posted by: chris on May 9, 2008 at 1:05 PM | PERMALINK

Gummitch, I think there is room for more trains and buses, but the owners just don't have enough respect for the commuters to add a train or a bus so you won't have to be pressed up against some different perfect strangers every day. They won't change it until more people start complaining about it, and stop settling for being treated that way.

The thing is, I work for a transit agency, and I know for a fact that we're at capacity. I can look out my window during rush hour on a completely empty parking lot; there just aren't any more buses to put on the road.

And the situation that causes people to get out of their cars--high gasoline prices--is echoed in public transit, because diesel prices are also at a record high, far higher than projected or budgeted. So the money one could spend buying vehicles is being spent on diesel fuel for the existing vehicles.

Posted by: gummitch on May 9, 2008 at 1:07 PM | PERMALINK

Weenie,

Ignore Swan. Swans are cute birds, but ask any director of a bird sanctuary. They are not pleasant to deal with.

At some point demand for gasoline gets pretty inelastic. In my own situation, I've got 4.5 years of payments left on my Ford Extinction and a 50-mile commute. Can't sell my house because the market's gone dead, and I can't change jobs because of the health insurance. I've already given up cruising up and down Main Street on Saturday night to impress the babes.

BTW if someone wants to take the Extinction off my hands, all you gotta do is take over the payments. I've got a '72 Impala on blocks in the back yard. I'll try and get that running again.

Posted by: thersites on May 9, 2008 at 1:14 PM | PERMALINK

Of course, the real answer is increased funding for mass transit, but what candidate is talking seriously about that?
A two minute walk from my house there's an abandoned railroad right-of-way leading right into Boston, and my office is a ten minute walk from another abandoned railroad right-of-way also leading into Boston. If I could take the train to work, I'd gladly make the change.

Posted by: thersites on May 9, 2008 at 1:18 PM | PERMALINK

A friend suggests that the country start using the big SUVs for livery service from suburban neighborhoods to and from mass transit and shopping districts. These could be 'stretched' if necessary. An 'electric propulsion converter package' could be engineered to be an off the shelf, drop in replacement for the big gas engines. Use what we already have too many of.

Posted by: slanted tom on May 9, 2008 at 1:27 PM | PERMALINK

start using the big SUVs for livery service

You'll pry my faux-leather bucket seat out from under my cold, dead butt!

Seriously, it's an interesting idea, but someone's got to pay off my Extinction. Where would the funding come from?

Posted by: thersites on May 9, 2008 at 1:33 PM | PERMALINK

Thersites,
You could always buy yourself an old fashioned railroad handcar and do your rail commute on the abandoned tracks.

Posted by: optical weenie on May 9, 2008 at 1:41 PM | PERMALINK

I wonder how much the downturn in the economy contributes to the decline in miles driven. After all, fewer people employed = fewer people driving to and from work.

Posted by: afferent input on May 9, 2008 at 2:01 PM | PERMALINK

I do a 12 mile, 30 min commute in LA. To do it on buses would require 2 buses and a net 1-1/2 hours EACH WAY.

I don't have that kind of down time.

I am a big train supporter, and generally use Amtrak if I have to go longer distances. So I'd be more than happy to get out of my car. Plus I can work on a train. But I can't afford 3 hours dead time daily on an MTA bus.

Posted by: IT on May 9, 2008 at 2:05 PM | PERMALINK

The common myth is that mass transit in the US doesn't work. It actually does work, and as any transit manager will tell you, the trains are packed to the hilt during peak hours just about anywhere they're put in. I remember this from when I lived in Denver, a place where everybody said mass transit wouldn't work, but where I couldn't get a seat on the light rail train (or a spot in the parking lot) if I showed up after 7:30. The problem is that we just don't have enough of it available in enough places.

Posted by: Doug-E-fresh on May 9, 2008 at 2:09 PM | PERMALINK

I would put much more trust in the 1% decline indicated by the gas production numbers (which I presume are reported, actual quantities) than the 5% FHA numbers (which are obviously derived estimates). Note also that on the FHA chart, 2007 tracked 2006 almost perfectly, although I think gas prices were higher in 2007 than 2006 (I don't really remember, though).

Anyone know how FHA comes up with the miles driven?

Posted by: q on May 9, 2008 at 2:31 PM | PERMALINK

thersites:

I guess he (my friend) figures the government, big business or some entreprenur would pay for the power package engineering.
(These SUVs don't have to accelerate fast. They can have a short range on a charge.) In the meantime, a guy with a registered* cell phone and a SUV can livery people around the suburbs if insurance regulations, laws, and attitudes change. They will.

*calls are recorded and monitored by some authority.

Posted by: slanted tom on May 9, 2008 at 3:01 PM | PERMALINK

That chart is right out of "Lying with Statistics." The omission of 0-7.2 makes the differences seem huge when they are not.

There is an option between nothing and mass transit. Car pooling. I find it odd that it is rarely considered.

The other option is small private 'buses.' For example in Kenya they allow large private vans as unofficial buses.

There are options that we Americans haven't considered.

Posted by: Tripp on May 9, 2008 at 3:18 PM | PERMALINK

Three points:

1) Saying demand is inelastic is not a claim of zero elasticy; it is a claim of LOW elasticity. Meaning it takes big price increases to get small reductions.

2)"Long term" elasticity translates into three years or more.

3)Long term elasticity is usually translated as about three years or more. So the graph should actually measure today's demand drop against price increases from three years agon.

4) We also need to take income elasticity into affect - meaning an increase in income increases energy demand, a decrease in income decreases energy demand independently from price increases. One of the reasons demand elasticity is hard to estimate is that after you have all the data, income changes, price changes, demand changes you still have to decide how much demand change to assign to price and how much to income. Very hard argument to settle conclusively.

Posted by: Gar Lipow on May 9, 2008 at 4:10 PM | PERMALINK

A couple of important points. I don't have the raw data but it appears that if you take out weeks 1 and 2 then you would end up with a significantly greater reduction than 0.7% in the top graph.

Point 2: People are buying more fuel efficient cars now, NOT because of CAFE standards but, because gas is so expensive. When people have a choice, they are choosing the fuel efficient car rather than the fun sports car.

Even the USA will figure out a way to use less gas if it is very expensive. It will take time as some of the important changes are expensive one-time changes. For example, do I move closer to work or not? Do I buy the V8 or settle for a compact car? Do I get a new fuel efficient furnance?

Sooner or later all of these changes will take place and we will use less gas.

then sooner or later, solar might become an alternative for a lot of fuel use and then more gasoline will come out of the same barrel of oil. Of course, it won't be a one for one exchange because different parts of the crude oil are made into different refined products.

Posted by: neil wilson on May 9, 2008 at 4:19 PM | PERMALINK

People underestimate the utility of bicycles.

IF, big if, you set the bike up right, and if you stick with it for the months (yes, months) that it takes to get into shape (and if you don't get lots of exercise each week already, you're not in shape), you can do a 10-mile one-way commute easily. It takes me 45 minutes, one way -- if I was really in shape, without stops, hills, or headwinds, I ought to be doing it in 30 minutes (a common time for 10 miles when I rode time-trials as a kid).

And, actually, "most" people probably do have a short enough commute that they could cover the distance on a bike. There might be other factors (nasty hills, nasty roads) but the median commute distance (I think it is between 10 and 12 miles) is tractable. They may not be fit enough today to do it conveniently, but that is a lifestyle choice, not a law of nature.

All that said, the items that *I* think people need in a commuting bike are:

- big fat slick tires ("Big Apple" or "Hookworm"). You want fat tires so you need not care about potholes, storm grates, or cracks in the road, and you want slicks because they go faster (and you want quality slicks because they go faster yet).

- no rear shock (no shock at all is better). Shocks eat power, practical nobody rides mountain bikes on actual mountains.

- enough cargo carrying capacity so that you don't overload your back. I've gone all the way to a stretched cargo bike, I can carry groceries, a small passenger, and tow the passenger's bike, all at once.

- if you commute in the (dark) winter, you need really good lights.

- if you commute in the (icy) winter, you need snow tires. Yes, snow tires for bicycles, they come with carbide studs, they're good for around 1500-2000 miles before the studs get turned away from the road or fall out.

- unless you are young, mountain bike bars are not for you (many older people get numb hands from nerve pinches).

This is not what people will sell you by default at a bike store, and most do not fit this description.

My choice of bicycle, for someone who was serious about commuting (and shopping, etc) by bike quite often, is a cargo bike, either an xtracycle, or a Kona Ute, or a Yuba Mundo. These are not light bikes, but that doesn't really matter for commuting, unless you are going up incredibly steep hills. The Yuba Mundo is probably the heaviest of the bunch, but it is also the toughest, designed for the most abuse, and is not that expensive. An Xtracycle can be even cheaper if you already have a bike. Surly produced, and sold out, a cargo bike frame called the Big Dummy, that by all accounts is very good indeed, but it is more expensive.

And once you get into shape, life is good. I can shovel piles more snow than I could two years ago, my knees feel better, I'm more flexible, I've lost 20 pounds and several inches, and my blood chemistry no longer sucks. Statistically, the risk I take of accidental death in biking, is paid back 10x (so I hear) in reduced risk of heart disease, stroke, and diabetes. Traffic jams are not a problem -- there's always room for a bike to slide through.

Posted by: dr2chase on May 9, 2008 at 4:34 PM | PERMALINK

Optical Weenie- I don't know what you're talking about in your last comment.

Gummitch- they should buy another bus or two and hike up the fare at least a nickel. If there are 1000 fares a day, that equals $18,250 in extra revenue a year. And surely a new bus will be kept in service for ten years or more. So if there are lots of new people who want to take buses, there is no way it can't be a winning investment that turns a profit.

Posted by: Swan on May 9, 2008 at 4:57 PM | PERMALINK

There are probably a lot of people who would enjoy roller-blading at least one-way to work every day, then taking mass-transit back home (or a cab if you've got something planned for the evening). Just take a route that avoids any goony-looking guys or known dangerous areas, even if the safer route takes a minute or two longer.

Posted by: Swan on May 9, 2008 at 5:00 PM | PERMALINK

I saw this device that uses sugar to convert to ethanol, in your backyard, called a microfueler http://www.physorg.com/news129557670.html

I just wonder if you can get in trouble for operating a still =P

Posted by: Jet on May 9, 2008 at 5:27 PM | PERMALINK

Swan: Optical Weenie- I don't know what you're talking about in your last comment.

If I may presume to speak for Ms. Weenie, I suspect that as a federal employee she might have somewhat resented your remarks of 12:56.

A very large percentage of the Federal workforce are permanent employees, and don't necessarily share the Administration's politics. I know it was true when I was on the Federal payroll during the Nixon administration, and it's just as true today.

They don't get to choose to learn Arabic or "Pakistani" (if there was such a language.) In fact, a number of them did, and were eased out of the government and military for bullshit reasons. Read Kevin's post of 2:25 on "Priorities" and then apologize to the vast number of Federal employees who, in spite of what you might hear from the Limbaughs of the world, work hard at their jobs.

Posted by: thersites on May 9, 2008 at 6:14 PM | PERMALINK

I've definitely noticed much less traffic *noise* in the neighborhood around my house outside of the rush hour. I think whatever discretionary driving that can be reduced has been somewhat. Especially quiet lately have been Saturday afternoons. You see the same heavy traffic around a WalMart or grocery store, i.e., but the general press of traffic in off-peak hours seems to definitely be down. I've also noticed that if I'm on a highway during non-peak hours with lighter traffic that it's easier to go *under* the speed limit (60 instead of 65) without as much traffic pressure pushing me and I'm noticing more people driving at the speed limit or a little under rather than pedal to the metal all the time.

Posted by: Doc at the Radar Station on May 9, 2008 at 9:21 PM | PERMALINK

Some bonus SCATblogging — let’s name a sewer plant after Bush!

Posted by: SocraticGadfly on May 10, 2008 at 12:30 AM | PERMALINK

These prices are unsustainable in the long run. Biofuels became competitive a couple years ago, and oil shale and tar sands are competitive at $50/bbl.

These have a long start-up time, but we'll start to see the effects in around five years.

In ten to fifteen years we might be importing next to nothing, like Brazil. We can't burn sugar cane, but we've got lots of room for switchgrass.

Posted by: TallDave on May 10, 2008 at 2:09 PM | PERMALINK

The price is the _result_ of cutting back driving, until demand meets supply.

Inelastic just means it rises a whole lot, usually accompanied by screaming and vote buying, but cut back it does.

There's no question though that driving was cut back. You can't burn oil that doesn't exist, unless you're a Democrat planner.

Posted by: Ron Hardin on May 10, 2008 at 2:27 PM | PERMALINK

Just a thought about Mass Transit Systems. They are possibly less responsive to the needs of the ridership because of the way that some are set up. Denver has the Regional Transportation District [aka "Reason To Drive"]. Their income does not come from fares. They have their own general sales tax stream, AND they are one of the larger real estate owners in Metro Denver. They actually make more money when the system is shut down. There have been two attempts by the workers to strike, and both foundered on the fact that RTD really does not care if the transit system runs, as it costs them money. I suspect that a similar set up is not uncommon in large metropolitan areas.

Posted by: Subotai Bahadur on May 10, 2008 at 4:53 PM | PERMALINK

I commute approximately 62 miles round trip, all but a mile of it on highways. My car is a 99 Saturn SL2 with 130K miles on it and during normal weather I get about 36 MPG. During winter it drops to 33 MPG. I buy about 550 gallons of gas annually.

There is no mass transit in the rural area in which I live and realistically, there never will be (nor should there be).

There is no reasonable way to sell my current home and buy another home closer to work. Nor can I afford to purchase a higher mileage vehicle - I typically drive cars until the wheels fall off - I figure I have 4 years left on my current car. At that time, I'll buy another used car, maybe a Honda Civic (44MPG) or perhaps a Jetta TDI (50+ MPG).

I have slightly reduced my number of miles driven, I have been testing slower routes with less traffic to conserve fuel. I already use some tricks like having the tire pressure on the high side, coasting out of gear when traffic allows and conserving momentum/minimizing use of the brakes.

Next on the list is to work from home occasionally, which I now do not to avoid work distractions to do things that require intensive thought. Now, I'm working to negotiate one day of work from home - I have the approval, just need to negotiate which day of the week with my coworkers.

The problem with all this is that domestic oil production in the lower 48 states has been dropping since 1970. Throw in Alaska and domestic production hasn't increased since the early 1980s.

So while part of the solution is conservation and improved efficiency, a large part of the solution is also creating greater supply, especially domestically.

That means our federal government, in particular the Democratic Party needs to get its sorry backside out of the way of domestic production and refining for the short term - and to enable nuclear electric generation to provide a long term, low cost electric energy strategy to eventually move from our oil based economy to an electric one. Today in their weekly address Sen. Stabenow D-Moron-ichigan berated the President for not having an energy strategy and then lauded Congress for increasing taxes on (evil) oil companies. Well, the Democrats run both the Senate and the House, and their strategy has been to take domestic energy options off the table and to stifle any domestic development of energy sources - oh and tax the comsumer more as those evil oil companies don't pay taxes, those taxes are passed on to the consumers who buy their products.

One other point - most mass transit systems are subsidized - fares do not come close to covering the cost of operations. As fuel prices rise, I believe mass transit fares should also gradually rise until they cover the cost of operations. The fares are subsidized to attract riders - if the competition's price is increasing, then the incentives to attract riders shouldn 't have to be so great. Besides, shouldn't the riders pay their fair share?

Last point - the oil prices have been driven up by speculators. That is not what oil companies are really paying - it's also why fuel prices are still less than $4 per gal at this time where I live. Reality will eventually return these prices back to reality - as surely as it did for Dutch tulip prices in the 1600s and the DotCom bust in the late 90's. Sooner or later the speculators holding the bag when reality hits will lose their proverbial shirts. I for one, will be pleased when that happens.

Posted by: Dr Bob on May 10, 2008 at 7:28 PM | PERMALINK

I have to interject and say switching to bikes isn't really as practical an alternative for as many people as some have asserted.

I tried the bike thing, I rode ten miles one way from my house to work. Where I worked there was a shower where I could clean up after the ride and I carried my work cloths in a backpack. And I did get in shape (had a car load of college girls lean their heads out of the window and shout "Nice ass").

But then the weather changed. Now ten miles in pouring rain with a wind blowing against you at a constant 20 mph with frequent guests up to 50 mph wasn't so fun. Nor was it so practical to get to work on time. I gave up once sub-zero weather and feets of snow piled up and went back to driving.

So, for biking to work to be a practical alternative for a lot of people the weather needs to cooperate, they need to have some place to clean up after a ride to be presentable, and they need more flexible hours so if they are running late in bad weather they don't get fired.

Good luck trying to get that to happen. And I haven't even started on grocery shopping, furniture shopping, families with multiple small children, and so on.

Car pooling, some mass transit (like the Netherlands example above) is far more practical alternatives (at least in the short run) then waving hands and saying, "Everybody can just ride a bike."

Posted by: Dr. Morpheus on May 10, 2008 at 7:44 PM | PERMALINK

I do not understand the celebration some have for high gas prices. I take it as a large part of my freedom the choice to travel where I want to how I want to. For example, my sister is afraid to fly. She usually visits family in Florida by driving from New York. With gas approaching $65 dollars a fill up she is now forced to consider facing her fears and travel by plane. The problem is traveling by air has also become more expensive.

The chattering class seem lockstep on the idea that high gas prices will force conservation as well as development of new energy sources e.g., electric cars. I always found this strange since gas has always been expensive outside the U.S. and in some parts of Europe it is approaching $8 a gallon. If the hypothesis were true, Europe should have done away with the combustion engine some time ago.

When gas prices rise people making low to middle incomes in America get seriously affected. I myself am paying $80 a month extra on fuel costs to commute to work. My freedom to travel where I want to for enjoyment is curtailed. Walk in the shoes of people with little disposable income before praising the cost of fuel in America.

Posted by: Bryan on May 10, 2008 at 11:15 PM | PERMALINK

Bryan,

It's the whining by you and people like you that reassure me as to why US gasoline demand will be high enough to keep me to the lifestyle to which I, and the rest of the Multinational Oil Industry, have become accustomed.

In the short term, your sister should enquire as to a number of fine, fine options available on Amtrak to get her from Grand Central Station to Florida, at very reasonable rates (including private room options that compete with a decent hotel).

More generally, while the US and it's excerable car companies (*) was inventing new, bigger and more useless SUVs, the Euros quietly built the 50 mpg commuter car - the VW Golf TDI. Yeah, it's a deisel, which means stupid ignorant and provincial Americans will refuse to buy it, and thereby keep me and my ilk rich.

In fact, you may note an almost total lack of Europoean cars that suck from a fuel efficiency point of view.

Finally, the Onion summed it up. 80% of Americans agree that other people should take public transport.

Ian Whitchurch
(*) As a side note, the Ford family have run their sports franchises as badly as their car company - remember, Daddy drinks because the Lions suck.

Posted by: Ian Whitchurch on May 11, 2008 at 1:12 AM | PERMALINK

More generally, while the US and it's excerable car companies (*) was inventing new, bigger and more useless SUVs, the Euros quietly built the 50 mpg commuter car - the VW Golf TDI./

And even when they do have cars (many do not), those wily Europeans still tend to walk, bike, or take public transit whenever it's feasible. And since their governments tend to invest money in things like public transit, universal health care coverage, and so forth--instead of insane wars and absurd corporate subsidies--their public transit is generally excellent.

I'm in the process of buying a home two blocks from my workplace. When my ancient car completes its death throes, I'm going to try doing without and see how that goes. I'll just rent a car twice a month and do all my shopping and errands then--it'll still be cheaper than my insurance and maintenance.

Posted by: Jess on May 11, 2008 at 2:16 AM | PERMALINK

Ian, The popularity of diesel powered vehicles in Europe may in part have to do with lower taxes on diesel than gasoline. Taxes aside, it requires more crude oil to make a gallon of diesel than it does gasoline and the prices here in the US tend to reflect that now. You get more energy per gallon of diesel than gasoline because of the density differences:
http://bioenergy.ornl.gov/papers/misc/energy_conv.html

gasoline density (average) = 0.73 g/ml
petro-diesel density (average) = 0.84 g/ml

Those ratios roughly correspond to the price difference between the two fuels here. So, the 50 mpg commuter car running diesel is actually comparable (in BTUs or MJs of energy consumed) to a gasoline car getting 40-44 mpg or so. However, the diesel engine *is* more efficient despite that, so you will get more power out of it for the same energy consumed. It would certainly be my choice if I got an electric hybrid-especially one where the usual transmission is done away with and the car is powered by an electric motor at all times.

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Posted by: prozac on May 11, 2008 at 10:45 AM | PERMALINK

Still, there's a caveat. In Los Angeles, for example, driving is down and use of mass transit is up.
Meaning what? More diesel/capita? More miles/capita?

What kinds of fuels do bicyclers use? Filet mignon? Freedom fries? How much oil does it take to make one order of Freedom fries?

Posted by: on May 12, 2008 at 4:25 PM | PERMALINK

Fuel economy seems to be going down according to your graphs. The drop in miles driven is much bigger than the decrease in production.

Could plausibly be from people changing their driving habbits.

Posted by: aaron on May 12, 2008 at 5:05 PM | PERMALINK

This is a pretty rough measure of gasoline consumption, but still suggests that high prices have had only a fairly modest effect.

It's fairly rough because it ignores inventory effects. The first 18 weeks of the year only carries you through the end of April. If you look at the EIA figures for stocks of refined gasoline (mouse over the "Gasoline" heading in the stocks charts on the bottom left), you'll see that there was a large inventory buildup of gasoline stock starting late last year and heading into April, until reversing in late April and in May.

Since the stock of gasoline increased, consumption was less than production indicates. This is presumably because refiners were surprised at the level of consumption reduction due to price. If you look at the percentage breakdown of where the price of gas comes from, you'll see that refiner share hit a historic low in January 2008, and has been very low all year. That's because refiners actually for once have extra production capacity compared to the demand for gas and the supply of crude. They're getting squeezed; it took their decreasing margins to make them realize that they needed to cut back on production and in the meantime they refined too much and stock increased.

Posted by: John Thacker on June 10, 2008 at 9:24 PM | PERMALINK

Here's the demand data: http://tonto.eia.doe.gov/dnav/pet/hist/wgfupus2w.htm

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