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Page added on May 23, 2012

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Americans are Driving Less


Good news for Memorial Day weekend: Since peaking at a national average of $3.93 on April 5, the price of regular gasoline has fallen almost 25 cents per gallon. That’s like a $25 billion tax cut for consumers. In fact, gasoline is cheaper now than it was a year ago at this time. Futures markets are signaling further possible declines.

All hail President Obama! Clearly his brilliant energy policy has gotten results, and fast.

Don’t believe it? I’m just applying the logic of recent Republican rhetoric, according to which Obama caused the pre-April 5 surge in gas prices. Mitt Romney himself observed last month that Obama “gets full credit or blame for what’s happened to this economy and what’s happened to gasoline prices under his watch.”

So now it’s time to give him credit, right?

As he undoubtedly knows, Romney was speaking economic nonsense. The global price of crude oil — down $12 a barrel since early April — mainly determines what we pay at the pump, and there is little that either Congress or the president can do about it in the short run.

Republicans protest that Obama hasn’t granted enough drilling permits, but that didn’t make much difference in the latest upward price movements — any more than Obama’s recent attack on oil-market “speculation” brought prices back down. Prices had started falling by the time he announced the crackdown on April 17.

Romney was, however, expressing a political truth: Both sides shamelessly use gas prices for partisan advantage. The GOP is skewering Obama during his reelection campaign, just as Democrats — then-candidate Barack Obama very much included — blamed President George W. Bush for a 2008 price spike.

What actually has been moving the price of fuel in recent months? In an April 26 post on his blog, analyst Tom Kloza of the Oil Price Information Service pointed out that the price spike earlier this year reflected ordinary seasonal fluctuations, plus some reduced refinery capacity.

Meanwhile, gasoline demand in April was down by more than four percentage points from a year earlier, according to consumer spending data assembled by MasterCard. Yet other retail spending held up. Apparently, people coped with higher gas prices by staying home and shopping online rather than driving to the store.

If this trend persists, it would not be the only way in which technology is changing U.S. gasoline consumption.

Getting a driver’s license is no longer the rite of passage it once was. (I was thrilled when I got mine in the late ’70s, and so was Dad, because it meant someone else could take the car to wait in the gas lines.) Only 28.7 percent of 16-year-olds got their licenses in 2010, down from 44.7 percent in 1988. The decline in teen driving may reflect not only safety and economic concerns but also the impact of cell phone technology, which makes it easier for youngsters to stay in touch without actually, er, touching.

More broadly, Americans just seem to be driving less, after decades in which the trend was up, up, up. As Rob Puentes and Adie Tomer of the Brookings Institution have shown, vehicle miles traveled (VMT) per capita began to level off in 2000 — while the economy was still booming and gas was relatively cheap. VMT per capita in 2011 was roughly 9,500 miles, about the same as in 1997.

American car-ownership and driving expanded rapidly after 1960 because of suburban sprawl, the entry of millions of women into the workforce and the emergence of a black middle class. Those social and demographic transformations have largely worked their way through the system, Puentes told me.

America’s love affair with the car may never end. But it does seem to be cooling down; it’s more like a stable marriage than a red-hot romance.

Less U.S. gasoline consumption per capita could be a plus for the environment. To the extent that slower growth in demand in the United States offsets rising consumption by emerging markets such as China, it would also help moderate world oil prices.

We remain vulnerable to financial crisis, natural disaster or war in the Middle East. Barring those events, however, the United States is not headed for some sort of gas-price catastrophe, no matter who wins the election. This is not what the candidates are telling you, but it is the truth.

Washington Post

5 Comments on "Americans are Driving Less"

  1. DC on Wed, 23rd May 2012 11:03 pm 

    Funny, how the WP post equates driving less with a ‘tax’ cut. In the US, unlike the advanced countries of the world, gas is barely taxed in the US, so it would be more accurate to refer to it as, a 25billion drop in oil-cartel revenue.

  2. Plantagenet on Thu, 24th May 2012 1:48 am 

    The Washington Post, like the rest of the mainstream media in the US, is utterly ignorant about peak oil. Their claim that the US is not headed for a gas price catastrophe is ridiculous, given that gasoline prices are going up quickly while people’s average incomes are going down under Obama.

  3. BillT on Thu, 24th May 2012 3:43 am 

    More canned BS from Big Petro through their ‘news’ mouthpieces. Oil is down because there is a drop in world consumption. It will go right back up when the economy of Europe stumbles again, or when the drums of war start beating again, or when the latest drop in oil production somewhere is noted. That so many different areas can affect the price of something, it is pointing a flashing neon arrow at the reality of Peak Oil.

  4. Kenz300 on Thu, 24th May 2012 12:47 pm 

    Quote — ” Romney was speaking economic nonsense. The global price of crude oil — down $12 a barrel since early April — mainly determines what we pay at the pump, and there is little that either Congress or the president can do about it in the short run.”
    Big oil and coal owns the Republican party and will do all they can to limit any competition. Oil companies and oil producers love it when oil prices spike. They make huge windfall profits. We need to end the oil monopoly on transportation fuels. Electric, flex-fuel, hybrid, CNG, LNG and hydrogen fueled vehicles are the future.

  5. MrEnergyCzar on Fri, 25th May 2012 2:40 am 

    One of the few minor effects from Peak Oil… Most are major..


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