Minimal Behavioral Adaptations to Oil Shocks

I wanted to gain some insight into why the productivity of vehicles (to annoy Halfin again) is so constant. However, a first attack seemed to be to look at the reasons why it isn't perfectly flat. That turns out to offer us a little more insight on this idea that Americans, in the face of an oil shock, might adopt behavioral responses such as carpooling, moving closer to work, biking instead of driving, etc, in order to reduce their oil use. Not a hell of a lot, it turns out.

This post is part of a series on the economic response to oil shocks, which I'm doing to gain a deeper insight into likely post-oil-peak economic occurrences. It began with a discussion of the stability of the mix of consumer spending, moved on to consider the productivity and efficiency of transportation, and then dived more deeply into what the US economy did to become less oil intensive. Readers with long memories will also realize the significance of these issues to my decline-rate based model of what might happen to the US economy post peak.

Recall this flattish ratio from yesterday's post.

To gain a better understanding, I plotted the real GDP against miles with both rescaled to be 100% in 1970. You can see that the long term growth rates match up very well, but the GDP is a bit more volatile than the miles.

Note the strong correlation of driving behavior with gas prices:

Source: NRO Financial

For any neoclassical economics fans that haven't run screaming from the room yet: what do you say: is the amount of driving people do more likely to be influenced by

  • Hypothesis 1: the marginal price of driving? or
  • Hypothesis 2: the size of the economy?
Forget Hypothesis 1 guys. Cut that chapter about demand curves out of your old college economics textbooks (or at least take a big yellow highlighter and footnote that the theory is pretty much inapplicable to goods in highly inelastic demand). The data say that people drive more every year regardless of what is happening economically, regardless of whether there are oil shocks, and regardless of the price of gas. I mean, I could take those last two graphs, compute the year-on-year changes, divide those and get an elasticity time series, right? But it would just be cruel I think. Torturing even neoclassical economists is not nice.

Finally, I looked at the growth rates from year to year of both real GDP and total miles traveled. Alas, the original data for the total vehicle miles doesn't have annual data for the 1970s, just 1970, 1975, and 1980. So it's misleading to plot growth rates for the miles in the 1970s unfortunately.

But we can still get the general idea. The condition of the economy does have some influence on the growth rate in driving - there is visibly some correlation there. But the miles growth rate is less volatile than the GDP growth rate. You might think it would be otherwise. As the ever quotable Professor Hamilton has noted:

Nine out of the ten recessions in the United States since World War II were preceded by a spike in oil prices.
Date Event Drop in world
Drop in U.S.
real GDP
Nov. 1956 Suez Crisis 10.1% -2.5%
Nov. 1973 Arab-Israeli War 7.8% -3.2%
Nov. 1978 Iranian Revolution 8.9% -0.6%
Oct. 1980 Iran-Iraq War 7.2% -0.5%
Aug. 1990 Persian Gulf War 8.8% -0.1%
Recessions show up in the big dips in the blue curve. Since recessions are usually caused by oil supply constraints, you might think a leading response would be to drive less. Some of the oil shocks that caused those dips were really big losses in global oil supply, as shown in the table to right (stolen from Professor Hamilton). Surely we would respond to this by driving less? But no, we are so absolutely dang-blasted goddamn determined to drive, that we would rather see the rest of the economy go in the tank than suffer ourselves to drive any less. Miles are less responsive to oil prices than economic activity in general. Go figure.

There may be, no, there undoubtedly are, conditions that would change this trend and cause us to drive less. But what this tells us is that they would have to be a lot worse than anything that has happened in the last forty years.

So when prices go up, we drive smaller cars or even motor scooters, but we still drive just as far.  All this MSM talk about people staying home or combining trips is just talk?
Or, we have to drive further to find available work?
The MSM might not just be talk, but they don't talk about statistics of how many people are reducing their driving.

Consider who is likely to talk.  Someone says that they're not reducing their miles, so in answer to "Are you driving less due to recent high gas prices?" is either a simple, "No." and they keep walking, or a "No, and those #$!@#@!@#@@ gas companies should be !@#!#!#%@#$!# !  GM rules, Ford sucks" or something similar.  Then there are the people who are reducing their mileage, or doing something similar.  They're quite happy to go into length what they're doing, because people generally like to talk about changes that they're making in their life.  Thus, they give a good sound bite.

Another thing to consider is that people tend to see themselves as doing something better than they are.  Consider running about to do 3 errands in one trip when all errands are about 10 miles from one's home.  The car is still started 4 times, and a few miles are saved, but unless all three of those errands are in the same parking lot, or very close, not too much gas will be saved.

Additionally, behaviors might be the same, but just labeled differently.  If someone's running out to location A and they know they need something from location B, they will try to do it then to save their time.  The classic "harried housewife" is calculating how to best route her trips to take up the least time, and thus everything is getting condensed.  Now one is doing that, except they're doing it "to save on gas."  It's the same behavior, and the trips are the same, but their brains label it as something else.

And lastly, some people resolve to do something, but just don't end up doing it.  Just as some people are perpetually going to start knitting, learn painting, or some lofty goal which they like to say, but they never get around to it.  "I resolve to condense all my errands and just run them all once a week."  But you forget something, and you need it, and hey, if you need it, you need it, so just go out and get it.  No harm.  Oppps, I need something else, so let's go out and get it.  Oh, and X invited us to visit, so let's drive over and do that.  Everything adds up, and despite resolving to do less driving one still keeps driving.

Through mixtures of all of these, I think that is why it seems that a lot of people say that they're trying to save on gas, but results differ.  Additionally, go out to public message boards (which aren't specifically PO or enviromentally green oriented), and try and compare the number who say that they're trying to save with those who say that if they've got the money they're going to spend it however they damn well feel like it.  And try not to ask if they've actually got the money, or if they've got the loans/credit.

The problem with this analysis is that it assumes that automobiles do NOT add to productivity.  In fact, widespread automobile transportation is a major enhancer for the economy.  It is not wasteful consumption (usually) but a factor of production and productivity.

Consider longer commutes.  The wider the range for recruiting employees, the more likely they can get the best, most productive talent.  Conversely, if I were compelled to walk to work or use public transit, I'd have to settle for lower pay in a position where I couldn't use my best talents and for fewer hours a week.  Consider what happened when New Orleans restricted city jobs to city residents - the police department had to hire lower quality officers.

On the consumer side, big stores offer economies of scale and scope.  Autos make more of these in reach of more people, allowing both competition and selection, saving money over the non-auto range.

In both cases, one can get more done with one's time and money with an automobile, thanks to gasoline.  Time is the ultimate limiting factor of production.

The real corrolation is MORE driving makes for a BETTER economy.

Or at least a bigger one.  I don't think we disagree too much Joe - there are probably feedback loops both ways between miles driven and economic activity (as Rick was suggesting yesterday).  It's only a problem if we are running out of oil or climatic tolerance for our exhausts.
probably different for you but this was from this week in england. was in a few MSM outlets

The gridlock on British roads is costing UK businesses £20 billion a year in lost productivity, a survey has calculated.

The study by the Institution of Civil Engineers said employees arriving harassed and late for work were costing companies dear.

Congestion also meant freight companies had to allow for longer and unpredictable journey times, so increasing the costs of goods and services to the public.

Between 1982 and 2003, the number of cars on UK roads rose from 15.5 million to 26.2 million - a rise of 70 per cent - increasing the pressure on the nation's transport infrastructure, it warned.

Increased car use was also leading to greater air pollution - in 2002 90 per cent of UK transport emissions came from the motorcar, the ICE calculated.

The survey also found strong support (69 per cent) among the general public for improvements in public transport to curb the nation's love affair with the car.

ICE president Colin Clinton said: "Unfortunately, there's not one simple solution to combat road congestion. We're pleased that the public backs improvements in public transport, but the real battle is getting motorists to use it.

"As civil engineers, we're not naive enough to expect the end of the car-first culture overnight.

"However, action must be taken before we can't drive to work or school in the morning due to permanent traffic jams outside our houses," he added.

Among its recommendations, the institution is backing the controversial issue of road pricing as an effective way of getting motorists to think more about using public transport.

"Pollution and the continued rise in the number of cars is a damaging scenario for our environment," said Clinton.

"There will always be essential car journeys, but with a quarter of car trips in the UK being less than two miles, ICE believes the majority of these can be made by public transport, walking or cycling.

"We've got no option other than the carrot and stick. The carrot option is to encourage increased bus, train and tram use, the stick option is to charge drivers to use highways.

"Ultimately, the future of UK roads is simple - increased governmental promotion of public transport or meltdown," he concluded.

Recessions are usually caused by U.S. Federal Reserve.
The FED was authorized a couple of days before Christmas 1913, supposedly to smooth the savage business cycle.
This is just silly.  See Wikipedia's list of recessions, which includes many recessions, depressions and panics before there even was a Federal Reserve.

Before there was a Federal Reserve there were about as many economic dislocations as there are now.  They were caused by all sorts of things.  For example, problems in agriculture would produce price shocks in food, leading to problems not entirely different from the problems we see with oil price shocks.  There were also plenty of monetary shocks which were quite a bit like the ones that flow from the Federal Reserve.  The big ones have their roots in war, inflation (even pre-Federal Reserve, inflation went hand-in-hand with war), and the decline in the money supply that resulted when pre-war currency values were restored.

None of which is to say that the Fed hasn't had a hand in every US recession and depression since it was created--it has.  But, you know, the US Air Force has had a hand in pretty much every US war since it was created, and nobody is saying that wars are usually caused by the US Air Force.

"The FED was authorized a couple of days before Christmas 1913,
    supposedly to smooth the savage business cycle."

Very inexact of me... recessions since the Fed was created are a function of the Fed restricting the growing supply of money and credit, after they have inflated same money and credit.

Yep.  The Fed is in there, trying (with an unknown degree success) to smooth the savage business cycle.

Without the Fed we still would have had recessions.  Would there have been more or fewer?  Shallower or deeper?  There's no way to know.

You definately swap the cause and effects here.
With few exceptions recessions are caused by overinvestment in assets that turn to be unproductive in the long run. Of course FED can artificially cause a recession as it did in the 80-s, but usually it follows the economy not directs it.

For the current situation I expect that it will try to cool down the economy by raising the interest rates gradually in the near future.

With few exceptions recessions are caused by overinvestment in assets that turn to be unproductive in the long run.

Overinvestment occurs because interest rates are too low - and those rates are set by the Fed.  But recessions also happen when interest rates are too high, choking investment and starving marginal enterprises of liquidity or revenues.  Recessions happen for lots of reasons.

Overinvestment occurs because interest rates are too low

Not always, sometimes it is because of a bubble (like in 2000) and sometimes there is simply a change in the environment. If you take a different point of view the oil shock recessions were actually caused by long-term overinvestment in unsustainable oil-dependant way of life.

Bad investments or misapplication of resources should be traced back to behavior indicating market potential when no potential would exist if credit inflation and ensuing bubbles were not influencing individual's consuming decisions. It is not really a chicken or the egg situation because market conditions would differ from present conditions if the FED wasn't involved.
Sure I agree (to some point).
What the FED has to balance is capital flow in market bubbles and bad credit (unproductive assets) and expensive money and investment mostly in T-Bills (also unproductive assets).

But there are also changes in environment that cause significant adjusments hence drop in GDP. Consider the oil shocks of the 70-s - much of the pain came from the USA auto industry which was totally unprepared for oil supply constraint. Or consider the number of the local boom-and-bust cycles, e.g. the oil shale mania of the late 70-s.

FED may cause economy slowdown/expansion by dropping/raising money supply but it can not control resource constraints or international market events. In other countries weak local currencies are also a factor of the business cycle.

The Great Depression was in the nineteen thirties, the Greater Depression was in the eighteen eighties, the Greatest Depression was in the eighteen thirties.
Of course, before 1916 the US was a net debtor and each time the Bank of England caught cold the US got pneumonia when the gold denominated debts from the US were called in to repay depositors of the British banks that needed the money.
Interesting that we are now a net debtor again. I wonder what will happen if we discover a hundred mile per gallon carburetor or fuel cell or super super capacitor and the Arabs need their money back?
I will posit that the country, with the exception of a few areas (Chicago, New York, etc. with active commuter rail), CANNOT reduce driving appreciably, simply because there is no alternative.

Rural families have no alternative. Suburban families could possibly choose taking a bus, but there are insufficient buses for them to make the switch. When municipalities add buses and routes, they raise fares to pay for them. This often reduces the economic advantage of the switch to the point that the additional aggravation of doing the bus thing is simply not woth the effort. So suburbanites bite the bullet and return to their cars for the commute.

Shipping is in the same fix, and this has been true since the 1960's - it's all trucks. Rail can no longer handle the volume, and they have curtailed their routes to only handle metro to metro cargoes. Mid-size cities simply don't have rail of consequence any longer.

The original meaning of the word "shipping" implied a boat. Yet most rivers no longer have shipping traffic as they once did. Trucks have all but killed river traffic to a great extent.

It's not that we prefer to spend more and drive, but that the alternatives are either economically insignificant due to fares, unduly difficult and aggravating to switch to, or simply nonexistent for most of the population and for industry.

For East Coasters who cannot suspend their disbelief, I invite you to drive to Texas and try our fine commuter rail and bus systems....LOL!

I disagree.  People could certainly avoid car trips if they wanted to.  They just don't want to.  Granted, they don't want to pretty badly, and will vote against any politician that suggests they ought to, but even that doesn't mean they can't

The town I live in (Champaign-Urbana, Illinois) has a pretty good bus system for a town this size, so maybe it's just another example of one of the "few areas" like Chicago and New York that you're mentioning as exceptions.  It couldn't expand instantly to replace all car travel, but that doesn't mean that it couldn't expand.

Only on a few trips at peak times are the seats mostly full, so the system could handle hundreds more trips per day for people willing to travel a half-hour or an hour earlier or later. The number of trips (especially during peak periods) could be increased.  If more trips were nearly full, there'd be money from fares to hire more drivers and maintenance people.  Buying more buses would take more time and money, but would also be possible.

None of this would happen instantly, but could certainly happen at the rate people would actually shift to riding the bus.

Those things, combined with car pooling, walking, bicycling, moving closer to work, and so on provide a wide range of options for drivers.  I don't buy the notion that they can't change.  They just don't want to.  Eventually higher prices will force these behavior changes, for all but the wealthy.

I'd like to see these changes happen gradually, with support from various sources to ease the dislocations that will result.  But they're going to happen with or without.

I Live In Huntsville Alabama. Most of the Jobs are in High Tech, and the support and services areas.  The folks in my little part of the city walk to their jobs, if they can.

But the majority of the High Tech folks, can't walk, nor ride a bus, though some do car pool (not many).  My last commute was 25 miles both ways. I could not afford the houses nearer work, they were way way out of my price range.  Several thousand Civilians go to work on Redstone Aresnal/Marshall Space Flight Center, They can't just walk there, there is no bus service and some of them live up to 50 miles away.  (They upgraded the Highway 72 and City Highway 565 interchange just down the road from me to Limit the bottle necks of the high volume of traffic.  In fact half the major roads are getting the upgrading treatment now, to handle the commuter traffic from out lining small towns. )

The east coast has the advantage here, you have rail and good bus service.  The rural or semi-rural spread out cities do not have those options, not without great cost, something the tax payer won't support paying.

I drive less because I can't afford not to.  Yet my brother who works one of those high tech jobs, has increased his driving of the 3 family cars, because he got a raise and can moan and groan, but still afford it.

The "I can still afford it, so I'll still do it crowd" is still alive and well in the USA.  But give them a credit crunch, The housing market BUBBLE goes pop, and interest rates go off to the moon, and you will see not only them suffering, but all the little guys too.

Oh - and being a Texan, which is the 11th largest economy by itself, this isn't a small number...
This is quite well known in Europe. Experience shows that driving is closely dependent of economy. Commuting changes with employment and goods transporting is of course related to economical activity and so is shopping. Stuarts graphs are as expected.

It is interesting to see that while industrial transports (ton-miles) have become more effective, other driving has increased almost exactly to offset it. On explanation could be the super- and hypermarkets, i.e. changing retail, distribution and delivery structures. Industry delivers to fewer points but the consumers have to drive more to get to the stores.

Another explanation could be increasing imports. They don't show in industrial transport statistics but create a lot of driving in retailing.

This shows how difficult it is to improve efficiency. Efficiency gains in one point may turn to losses in another.  

I'm not an economist, so I not quite sure what to make of all these attempts to come up with reasons why the aggregate miles driven don't respond that well to gasoline prices. However, to examine a more micro example, I think I see some of the reasons right here in my tiny home state of Delaware.

Most of the non-agricultural business activity in Delaware is centered around the northern end of the state, namely a roughly 15-mile corridor stretching northeasterly from Newark to about 5 miles north of Wilmington. Most of the State's population used to be concentrated in this relatively small area. However, starting in the mid 1980s and continuing to this very day, there has been tremendous growth of the deep suburbs extending into formerly undeveloped areas 20 to 30 miles south of this zone. People moving into those areas have to drive much farther for both employment and shopping.  So, it should come as no surprise that Delawareans are driving more per capita miles than they were 30 years ago.

As a very large fraction of  the miles driven constitute nondiscretionary driving, neither gasoline prices nor the GDP can be expected to have much effect on this number. One has to make at  least 5 round trips a week in order to work, and one has to make at least one or two trips to shopping areas per week in order to eat and maintain an household. Those miles are going to be driven come hell or high water.

I'm sure that Delaware is hardly unique in such uncontrolled expansion of the suburbs into outlying areas that are getting farther and farther from centers of employment and consumption. While cars have gotten more energy-efficient, much of this gain is being lost by increasing the miles driven for those people living in the deep burbs. Delaware is a perfect example of what Kunstler has been preaching.

However, there should be no doubt that a massive global depression will do wonders for reducing per capita miles driven. (Your car get's a good long rest while you are out of work and can only shop for the bare essentials.)


The Census says average commute times grew by 40 sec 1980-1990, and 2.1 minutes 1990-2000.  Now they stand at about 25 minutes, so the aggregate increase is roughly 10% over 25 years, most of it coming during the 1990s.  Over the same time period, average distances increased from 8.5 miles to 12.1 miles, or nearly 50%!  So, among other things, that means that our average commute speed is increasing quickly - more folks on freeways!

here's a good link to a paper on this from USC:

That means that each person is spending more time in a car.  That's being driven by a surge in longer commute distances.    Because of population growth (the boomers aren't retiring yet) total commute miles are accelerating even faster.  But if GDP per mile is constant, that means that Real per capita GDP is growing at the same rate that commute lengths are growing!  And that makes sense - as we've gotten richer, more folks have headed for suburbs and exurbs.

But that suggests a response to cheap fuel.  If gas is dear, then people will live closer to work and their commute distances and times will drop.  

Also note, these statistics are for all commute modes, not just highways.  The close match for highway miles and GDP is another reflection of the slower growth of transit - but that can also change.  Of course, there's additional factors, like changes in use of interstate trucking and decreased reliance on the automobile for major family vacations.

Commutes of small distances in dense urban areas can vary dramatically depending on the quality of the mass transit system. Housing affordability is directly linked with mass transit availability so working class folks must seek housing in areas that have bad mass transit options - like parts of Brooklyn and Queens in NYC.

So the key to reversing this trend that Stuart has aptly pointed out is building affordable housing near well serviced by mass transit or expanding mass transit to underserved areas.

But that requires convincing people to move back to the city or denser urban areas which would reverse a 60 year trend. The alternative is to simply create more mixed use zoning for the suburbs. Some suburbs are actually pretty dense, but don't have any local shopping/grocery/workplaces so people need to drive long distances to do those things.

It is no doubt interesting to note that the driven miles are so closely following the GDP. This is not trivial of course - why should people drive 3% more if the GDP rises 3%?

But this has nothing much to do with the energy efficiency of the US economy. Here we measure something like vehicle-miles on roads. This is mostly used for road and traffic planning. If we want to measure the transporting activity we should use ton-miles and person-miles and take all forms of transporting in account, road, sea, rail, air transport, also to and from abroad (freight and passenger), even pipelines. Only this way we can get the total volume of the transport activity.

Then we should count the used energy, not only oil but everything (even power used to pump oil in pipelines). And add to that the energy used in maintaining and building the transport infrastructure - roads, airports, ports, pipelines, even parking lots! We should add also the energy used in making and maintaining the vehicles, cars, trucks, airplanes and all. Dividing the total transport volume with the total energy used for transporting activity we get the efficiency. There is still the problem with the units. How to compare person-miles and ton-miles, freight and passengers? And how we divide the infrastructure costs between them?

If we look the tranport system as a whole we see that the efficiency is a complex matter. For instance, traffic jams decrease considerably the fuel efficiency. But bulding more freeways to ease them consumes also energy which must be taken into account. And there is also the economies of scale: very good, well paved and maintained roads improve fuel efficiency. But building those kind of roads is possible and improves energy efficiency only if the traffic volumes are high enough. Thus we get this kind of efficiency only when we use more fuel. Using pipelines to move oil is very efficient but possible only if we use oil in high volumes.  

This means that we start losing these kind of efficiency gains when transport activity starts to decline. So it is not clear that efficiency gains could compensate for diminishing energy supply. We have seen something like this happening with the railroads. If traffic volumes go down the maintaining of the rails and the whole system becomes more expensive and less effective per ton-mile carried.

Yeah, but transport is the lion's share of oil use in the US economy, and highway miles are the lion's share of that.  So it is the largest thing to consider, and it's also the thing that historically has most resisted change.  So it is the main thing to consider in looking at the oil efficiciency of the US economy (which is my subject of interest right now).
From your graphs I can see that dimishing share of other than transport use of oil has been an important factor in the oil efficiency in the US economy. No doubt the situation now is such that diminishng oil use in the economy means cutting the transport consumption because it is increasingly difficult to reduce the remaining 30% of the consumption (industrial, commercial, residential, agricultural).

But if it is so as Porsena says here, that rather significant share of the transport oil consumption is used by freight, this means that bulk of the conservation should happen in the share of private personal driving. Now the real energy problem in the US is not oil but natural gas. World oil production could still increase a little but the North American gas production is over the top and LNG import capacity is insufficient. This means that it is very difficult to substitute oil in other uses. In the short term only coal could help but probably only to ease the natgas problem, not substitute oil in any way.

It follows that if the US oil consumption must be cut down in a way that does't cause major disruption in the economy,  it must happen in the private driving. If its share of transport use is 60% then a 10% reduction in oil use means a  24% cut in the private driving. This is a lot.

This could only be achieved by a heavy gasoline tax. If this is not possible the effect goes through all parts of the economy and result in a severe recession. If the GPD - vehicle miles dependency is so high it is easy to tell what happens to GDP if oil use must be cut.  


I'm pretty sure Porsena's reference is wrong.  Here are the official stats for 03, which show everything bigger than an SUV together as 215 billion miles out of a total of 2.89 trillion miles.  So only 7.4% of miles go in semis, delivery trucks, buses, etc.  92.6% of miles are cars/pickups/SUVs/small vans.

Re: "And that makes sense - as we've gotten richer, more folks have headed for suburbs and exurbs...."

Check out Living Too Large In Exurbia from Business Week. Yesterday, I speculated here about the connection between increased driving and the geographical size of the roads/highways network grid. I still believe there is something to that. Obviously, this ties in with longer commutes and the amount of time we spend in our cars.
Right.  I had lunch with Southsider1 a while back and he was arguing that in the depression you did see people subdividing big houses into smaller apartments and this would happen again post peak in order to allow people to get closer together and reduce the driving intensity of society.  It makes a lot of sense.  However, I think it would take a full-on depression to make people do that.
When I read of dividing up houses, the image I have is of all those 'comrades' sharing the Gromeko's city house in Dr. Zhivago.

A lot of big owner's and manager's houses get divided into condominiums or apartments in the normal fluctuation of neighborhood fortunes.  It would be an interesting design exercise to subdivide a McMansion.  Probably adult children and other unemployed or underemployed family would be the preferred tenants.

In response to Donal's comment ("When I read of dividing up houses, the image I have is of all those 'comrades' sharing the Gromeko's city house in Dr. Zhivago."):

Right on. Here in Lithuania, as in the rest of Central and Eastern Europe, the past 15 years have been spent undoing the housing policy of the Communist period. My family's flat (apartment or condominium, in American English) consists of 69 square meters. When it was built during the Brezhnev years, three families lived in it, dividing up the four rooms, and sharing the kitchen and bathroom. Now? My wife and I, and our two children. Nobody else.

Now multiply that across half of Europe. Probably China, too, as the rural people move to the cities. Lots of new demand for heating energy, right? Sure, the population has dropped a bit, and lots of people have emigrated to Western Europe. Still, there's plenty of new space being built, and all that needs heating... plenty of demand creation in these parts!

Wow, 3 families in less than 750 SF!
The conclusion is that the price shocks of the 70s did not cause neither changes in consumer behavior nor any major restructuring of the way we live.

Americans just do not or do not want to know the word "conserve". Even at 5$ per gallon the price is such a miniscule share of the average income that people just don't care. If they are forcedly put to conserve (by shortages) they either buy more efficient cars or drop some errands which correlates to drop in GDP but no other long-term changes. Construction companies do not start to build dense residentials, car-pooling and mass transit still have a marginal effect. In short moving to a european-like style of living (local, walkable, excellent mass transit) will require much more then 5-6$ a gallon and a few years to implement. I see it starting only after severe shortages and taking at least 30-40 years.

I go along with JHKunstler on this point, I don't think we have 30 or 40 years, 10 at the outside, maybe less.  The things that move here aren't just the cars we drive and money we spend at the local Wally World's.  We see China and India looking out there for more Oil.  We see OPEC Reserve and Production numbers being a set of Old Lies, that save them face, but which will come out here and bite ours.  If even "Part"  of waht Matt Simmons says is true, 10 years will see great changes and the Oil Shocks of any other era will just be blips.  We do not have 30 to 40 years to change our habits, we don't even have 10 years.

Where does that leave us?  Heck if I know, But I won't get a 30 year mortgage or any other big debt.  I don't own a credit card, or a cell phone.  I have always lived real close to the edge.

Better for me I guess than the Guy who finds his High tech Job and 30 mile drive to work lost, and Now his family moving from the Big Place in the Country to who knows where.  He can't sell his house, because the shocks are here.

A Lot of what we talk about is just the Musings of folks knowing that things won't be the way they are now, and could be far far worse than anything we can imagine.

OH and who is to say that Hilary Clinton won't solve it all for us in 2009.

PS, I work at home.

You might want to re-do some of these graphs and tables factoring in population effects - after all, US population has grown about 50% from 1970 to 2005, and the real meaningful numbers relating to response to economic issues like gasoline prices would be per-person, not for the economy as a whole. Probably doesn't make much difference, but it would remove one  common and basically irrelevant factor from the correlations, perhaps making other correlations clearer.

Have you looked at the population figures an intermediate variable?

It seems to me that you are looking at GDP, and not per capita GDP. It seems logical to me that given no constraint on available energy, both miles driven and GDP would respond to population increases.

The population factor has to be examined.  Some of the areas that have experienced the greatest growth in vehicle miles traveled are also the fastest growing in terms of new residents.  People may well cut back their miles traveled in response to higher prices.  But this cut back is lost as more people take up driving.  Somewhere there should be statistics that show the increase in licenced drivers in this country and perhaps that number should be correlated against VMT for a VMT/driver.  

Like so many other problems out there, the population figure is a key to determining overall impacts.

I agree it's relevant, but the CIA factbook says US population growth rate is 0.92%, significantly lower than the growth in GDP and miles.  So we have been getting quite a bit richer per-capita, and also each driving further.

My working hypothesis is along the same lines a number of us are thinking: both GDP growth and mileage growth are linked together via the common variable of adding new suburbs.  If economic activity and jobs grow in a given city, more people move there and have to be accomodated in new suburban growth on the fringes of the area, resulting in an increase in per-capita miles in that city.  So now I'm looking for statistics on the total area of urban/suburban development.  Anyone know?  (I think we have some architect/planner types amongst us right?)

Within the last couple of days , I read that Dallas was considering closing some city bus routes because of rising fuel costs !  That's an interesting feedback loop .  
The local trend in Sweden seems unscientificaly to be to raise ticket costs, scale down less used busses to the minium needed for schoolchildren and often to increase traffic on the most used busses.

Buses are fairly often used when municipials decide to try to be more enviromentally friendly and run vehicles on ethanol, methane or experiment with regenerative braking.  Somebody somewhere in Sweden tries regenerative braking about every 5 years and it has been done for at least 20 years, someday it will work and even be economical. :-)

Methane from biomass has become a success, ethanol dident give as clean exhaust as people hoped for but is economically ok, Rapseed-Methyl-Ester is barely economical with our fuel taxes.

One thing I observed in my bus driving days was that most people who worked downtown lived in the suburbs. Those who lived near downtown worked in the suburbs. The downtown jobs were mostly governmental, legal, educational, banking, and insurance. These employers all required at least a few years of college education.  The jobs in the suburbs were mostly retail or low skill factory work. Walmart does not build in inner cities where their workers live. Having said that the heaviest commuting in my area is between two suburbs about twelve miles apart with commute times of 30-45 minutes. The overwhelming number of jobs of all types are diffusely spread out in the suburbs and are not ameanable to public transit options.
I'm sorry, but the more I read the less faith I have in our VMT data ... especially over short timeframes (year to year changes).

We know there is no bid odometer out there.  Where states do inspections of a large segement of their fleet (is there any state that does this?) ther might be good data, but without that they are falling back ... sometimes to those little rubber hoses we drive over in roads ... sometimes to gas sales numbers ... and I suspect, sometimes to raw economic numbers.

If ultimately VMT is deduced from GDP, there is going to be a strong correlation.

I'd really love for there to be good, short-term, data on which licensed cars are being driven and how far ... but it is just not there.  And we ceratinly are not going to detect the short-term transformations in consumer behavior with missing data.

Re: "There may be, no, there undoubtedly are, conditions that would change this trend and cause us to drive less. But what this tells us is that they would have to be a lot worse than anything that has happened in the last forty years."

I've been saving this news item for the best time to bring it up. Now is that time, for I have identified a condition under which Americans would severely curb their driving. My source is this Celestial Update from the NPR radio show Living On Earth.
TYSON: Yes, an asteroid was discovered mid-last year, and it has the uninteresting name 2004MN4. And it went unremarked upon on because many asteroids are discovered each year that never reach public notice. Except that when it went behind the sun, going out of view from the sun's glare, and then was rediscovered in December, we were able to calculate its orbit and determine that it's trajectory was going to intersect Earth in the year 2029 or the year 2036. This didn't make it to the front of the newspaper because around that same time, you might remember, there was a tsunami in Indonesia - which, of course, rightly so, got the better part of all the headlines. But, ironically, this object, if it hits Earth, would create a tsunami dwarfing the one reported on in December '04.

GELLERMAN: What are the chances of this asteroid hitting Earth?

TYSON: Well, rather than give you probabilities, because what you really need to know is what's going on. We know where the object is headed, and we know how fast it's moving, and we have a sense of the forces of gravity in the solar system. The problem is the uncertainty in that trajectory normally is not a problem; if it misses Earth by a million miles, or a million and a thousand miles, who cares? But, in this case, in the year 2029, the calculations show that this asteroid will come within the orbits of even our communication satellites.

GELLERMAN: Ooh, that's close.

TYSON: That's close. That's close. This will be the largest object ever known to come within our communication satellites in the era of space exploration. And so, turns out, what we know of the orbit right now, we can say it will not hit Earth in 2029 but it might hit Earth in 2036. It will hit Earth in 2036 if it passes through what we call a "keyhole," which is a range of positions close to Earth where the gravity of the Earth will realign its trajectory ensuring that seven years later it will hit Earth. And so what we need to do is deflect it in such a way that it misses that keyhole....

TYSON: If the asteroid in 2029 passes anywhere in the keyhole we know where it will end up hitting Earth in 2036. It'll hit somewhere between Hawaii and California in, obviously, the Pacific Ocean. That hit will generate tsunamis on the level that has never been experienced in recorded history. But the advantage is you would know in advance so that, while you might lose $400 billion worth of property, no one actually has to die from this tragedy the way people died in Indonesia. There was no warning for that tsunami. This one you can have decades of warning if, in fact, we can't do anything about it.
I am confident that if this object, which is "200 meters across, about the size of the Rose Bowl", actually makes impact in the Pacific off the California coast, Americans will, for a time, curtail their driving.
Hey Miramani, which way was that obelisk again?
Yes, Wikipedia has a good article on the asteroid now named 99942 Apophis. The interview I cited is misleading.

Still, I think I made my point. I'm disappointed because now I don't know of anything bad enough to curtail driving outside of... -- nevermind.
well the impacts of oil use are  raised here
18th october

By Jeremy Lovell

LONDON, Oct 19 (Reuters) - World scientists are aiming to spell out in graphic detail the threat of flooding faced by millions of people from America to Asia as global warming melts the polar ice caps.

A major coordinated study of the Arctic and Antarctic ice sheets intends not only to lay the bald facts before world leaders but offer courses of action.

"We want to be more prescriptive," said David Carlson, head of International Polar Year (IPY) starting in March 2007.

The two year study, announced on Wednesday by the International Council for Science (ICSU), will be the first coordinated probe in 50 years of the ice-bound ends of the earth under the onslaught of climate change.

ICSU is a non-governmental organisation whose members include the national science academies of 103 countries.

"Part of the reason scientists stay in the comfort zone is that they can always say: 'well we don't know enough,'" Carlson told Reuters. "We are going to take away the uncertainty.

"If we come out of this and say 'we still don't know enough' then we will not have done our job," he added in an interview.

Scientists say the earth's temperature will rise by at least two degrees centigrade this century due to greenhouse gases from burning fossil fuels for transport and electricity, putting millions at risk from extreme weather and rising oceans.

A new United Nations' report states that up to 50 million people could become environmental refugees from floods and famines due to climate change within five years.

And a study last year found that Arctic temperatures were rising twice as fast as in the rest of the world.

"I can guarantee that we will have a much more accurate sea level prediction," Carlson said.

"We will know what the West Antarctic ice sheet is going to do. We will know what the Greenland ice sheet is going to do."

One estimate says that if the Greenland ice sheet -- the second biggest after Antarctica -- melts completely, sea levels will rise by seven metres and drown vast areas of the world.

But that is nothing compared with the estimated 200 metres that sea levels will rise if all the Antarctic ice melts in the coming thousands of years.

Carlson is not worried that the scientists might enter the political arena where -- as was illustrated earlier this year in Britain's struggle to get the Group of Eight to agree a climate action plan -- landmines await the unwary.

Right up to the last minute at the July G8 summit in Scotland, U.S. President George W. Bush's officials were stating that global warming was a natural not a man-made phenomenon -- and they even questioned whether it was happening at all.

But it is not just rising sea levels that are at stake.

The melting of the Arctic ice caps will dilute the salinity of the North Atlantic and slow down the life-giving Gulf Stream current that warms northern Europe.

Apart from ice, the IPY research will focus on big themes such as the northern climate system with a faltering Gulf Stream and thawing permafrost, and the ability of the southern oceans to absorb carbon.

"We see the whole event as a real jump," Carlson said. "Instead of more of the same, we want this to be a real focus. Our voice is going to be much stronger."

This guy had a few clues;

Newton did ponder the end of the world "in the year of the Lord 2060", but stressed: "I mention this period not to assert it, but only to show that there is little reason to expect it earlier, and thereby to put a stop to the rash conjectures of interpreters

from As they say in the cricket playing countries we've had a good innings.

If the data for vehicle-miles include all types of vehicle, the link to GDP might be as simple as the dominance of commercial vehicles in the total mileage.  

From Table 12.4 of International Fuel Prices 2005, in 2001 there were 92.79 million commercial vehicles in the USA each driving an average 75,000 km a year.  There were 137.63 million passenger cars, each driving an average 15,000 km per year.  The figures for miles driven in this table are income-based estimates but let's suppose they're about right.

That would make the total annual mileage for commercial vehicles 6.96 trillion, as against a total of 2.06 trillion for passenger vehicles. It's not such a big stretch to imagine a link between commercial vehicle mileage (over three-quarters of the total) and GDP.  

If this statistics is right all the calls for hybrid cars, car-pooling, mass transit, cutting discretionary driving etc. are doomed to make an insignificant scratch in our oil addiction. We need a new oil-free paradigma now or else we are simply waiting for a disaster to come.
I think Metschies has a screw-up in his numbers.  He's saying there's roughly four times more commercial miles than passenger vehicle miles.  If that were true there'd be four commercial vehicles on the average piece of freeway to one passenger car.  It's more like the other way around.  According to the transportation  energy hand book, in 2001, automobiles did 58.2% of miles and "Two-axle four tire trucks" (ie probably mostly pickups and SUVs) did 33.8% of miles.  That leaves only 8% of miles to be done by big trucks and buses.
I agree about Metschies, but I'm not sure about your transportation energy handbook either.  This points out how difficult it can be to find good data. Subjectively, 8% of total mileage for true commercial transport sounds too low.  

I don't know the US situation, but the Canadian government publishes an energy use data handbook [ with detailed tables on energy use by sector and the underlying data.  Chapter 5 of the 2005 handbook has detailed statistics for road travel in Canada by cars and trucks in 2003, from which we learn that 76% of the total distance is attributable to passenger cars, light trucks and motorcycles; 1% to buses; and the remaining 23% to freight transport by truck.  This sounds a more reasonable set of numbers than either of the other two.

More to the OD point, the tables show that passenger transportation (including by bus) takes only 59% of the total energy consumed for road transportation, with freight transport taking 41%.  Not as dramatic a picture as Metschies', but it also suggests that fuel efficiency measures targetted only at passenger vehicles miss a significant portion of the consumption.  

porsena -

In your post you cite some data claiming that there are approx 93 million commercial vehicles and 137 passenger cars in the US.  If that were true, then there would only be 1.5 passenger cars for each commercial vehicle, and I find that very hard to believe. All one needs to do is to go to any highway any time of the day and count the first 100 or so vehicles that pass by.

I strongly suspect what we have here might be an overly broad definition of 'commercial vehicles', a term that connotes trailer trucks, delivery trucks, etc. If that data were taken from department of motor vehicle registration figures, then I think I have an explanation.  In most states pickup trucks and vans are registered as 'commercial vehicles' or given a hybrid 'passenger/commercial'   registration. As there are a very large number of pickup trucks and vans used soley for personal transportation, that 93 million number very likely includes a very large percentage of such vehicles that are de facto  passenger vehicles.

Just a hunch, but I really have my doubts that there are anywhere near 93 million true commercial vehicles in the US.

A couple of things seem questionable about the statistics to me, and one is the number of commercial vehicles.  However, the tax write-offs for SUVs and pickups suppose that's what they're being used for, and light trucks have been the fastest-growing vehicle segment for years.  

The other thing I wonder about is the average annual mileage for a passenger car. Only 15,000 km seems too low to me.  On the other hand, there are four licensed passenger cars at my house, and their annual average is just 5,100 km because two of them are toys.  Garages all over the country hold lots of these toys, which would dilute the average mileage to some extent.  

So far the availability of gasoline did not constrain commuting. Since the dawn of mankind a  day is exactly 24 hours long, and I suspect, that the time available to commute didn´t change. Before petrol, you could walk three hours to school or the work, but that´s about the upper limit. So you are demonstrating that with improving roads longer commuting distances can be covered and indeed are covered within the same time budget.
To invest in infrastructure namely roads is a tried and tested policy to promote growth of the economy. With good roads the catchment area of buisnesses increase, and vice versa the employment opportunities.  
I'm having trouble here and maybe some of you can help clear this up.  How and who measures the number of miles driven by motorists in the US?  I don't report my actual mileage to anyone.  I presume none of you do either.  Yet somehow the government is convinced it knows how many miles we all drive in the aggregate.  Apparently Stuart takes the number seriously so I'd like to know where it comes from.
What you've said is a perfect reminder of why I have a deep suspicion of some of these government-generated aggregated gross economic numbers.  

My direct experience with same has to do with toxic chemical reporting data compiled under law by the EPA.  These data were generated by sending out a mass mailing of questionnaires, in which the respondent had only a limited choice of putting his answer into one of about 5 broad-range categories. The effect was a gross rounding off of the actual amounts.  Some tiny toxic releases were over-reported, while some of the major ones were under-reported. Yet, people (mainly economists) take these data as being highly accurate and play their econometric games with them. The fact that the 'data' was questionable to begin with gets lost in the shuffle.   If there were ever a more perfect example of garbage in/ garbage out, I don't know what it is.

That is why I don't believe that this number called GDP means much at all. There is an all too comfortable tendency to rely on 'official' government numbers without taking the trouble to look into how those numbers were generated and what they really mean.

Trying to devine meaning from all these government-generated numbers, in my view, is an exercise in wanking. I feel less strongly when going from the macro to the micro, for there one can more readily discern what the numbers really mean.

Stuart, do you have anything to say on this?
The data come from the Federal Highway Administration who say that they aggregate data about mileage on different highway types from all the states.  Odograph gave this reference

which discusses figuring out mileages via odometers at smog check time which seems like it would be pretty accurate.  States without smog checks must do it another way (surveys?).  I imagine the process is imperfect.  However, the hypothesis that the states all conspire to report bad data in such a way that the federal total matches real GDP, even up to showing the effects of oil shocks and recessions on driving behavior, seems implausible enough that I don't find it very interesting to explore.

However, the hypothesis that the states all conspire to report bad data in such a way that the federal total matches real GDP, even up to showing the effects of oil shocks and recessions on driving behavior, seems implausible enough that I don't find it very interesting to explore.

Nor do I.  I simply wondered how the vehicle mile data was generated.  This seems like a legitimate question since it's not at all obvious.  I doubt that the (three) data points from 1970 thru 1985 were based on the same methodology as used from 1990 thru 2005.  Perhaps it's just as accurate but, then again, who knows?  The paper you reference indicated there was an order of magnitude difference between methodologies in one extreme case.

These figures were compared to the 1994 HPMS database, and were more than an order of magnitude larger. However, this appears to be due to a typographical error in the HPMS database. This example highlights the value of performing a double-check on VMT estimates. Other sources of information estimate that total VMT in Maricopa County was approximately equal to 20 billion miles in 1993. This figure represents VMT by both gas and diesel-powered vehicles. The 1994 estimate calculated above is 30 percent greater, while an annual growth rate of only five to seven percent is expected. This suggests that it may be useful to reevaluate Maricopa County VMT estimates calculated by more traditional means.

It also seems quite reasonable, given all the unrationalized figure fudging they talk about in the paper that the numbers could be way off.  I didn't come away feeling confident that the methodology was sound.  It was just the best they could muster from a variety of sources who weren't trying to coordinate with each other.

It seems very reasonable that in a society such as ours that depends so heavily on transportation and requiring ever greater commute distances that there might indeed be a strong positive correlation between vehicle miles and GDP.  Why it should be 1:3.5 rather than 3.5:1 or 1:7 is indeed a mystery. There's an invariant ratio between how much the government thinks we move around in our vehicles and the number of dollars the government thinks our economy generates.

Perhaps Mr. McTeer was onto something when he suggested we should "all hold hands and buy an SUV."  Your graph shows that we generate $3.50 of GDP for every mile driven so apparently we can motor our way out of a recession in all those new cars we buy!

Ah, man.  I was just over at Kunstler's -- he is making more sense all the time -- and his latest piece is just so hilarious.  He writes so well.

Here's the real dope on the situation. The big corporate production home builders, including the Toll Brothers, are selling their own stock like mad lately because they realize that the game is over, that they are in a twilight industry. (The Times left this out.) Home heating costs are going to crush the public this winter, and even the supposedly well-off in big new houses are going to feel the pain, because the truth is that many of them are leveraged up to their eyeballs to be where they are, and supernatural utility bills will push them over the edge just when the national bankruptcy laws have been revised to make wiggling out of debt much more difficult and punitive. The price of gasoline will keep ratcheting upward from where it is now like a medieval torture device, and will combine with home heating costs to make the public's collective head pop like a winter melon.

Meanwhile, the mortgage industry, a mutant monster organism of lapsed lending standards and arrant grift on the grand scale, is going to implode like a death star under the weight of these non-performing loans and drag every tradable instrument known to man into the quantum vacuum of finance that it creates.

That last sentence is a work of literary genius...
An oil shock would have an effect here as 18% of people leave my county to work and the rest of us working stiffs have 365 square miles of county to commute in.