This chart was included as part of a brilliant blog post by our friends at TransitLabs, which analyses the various issues surrounding the perennial shortfalls that dog the highway trust fund (aka Gas tax). Highly recommend reading the entire blog titled “Why the Trust Fund Keeps Running Out” and explore the beautiful visualizations that accompany the story.
Image courtesy: Transitlabs
With gas prices falling faster than a drop of water from the sky (as we speak, the national average is well below $3 – the 1st time since Dec 22, 2010), you can expect more Americans tempted to drive instead of opting for other modes of transportation. AAA expects the travelers to spend an average of $573 over the course of their holiday travels. Click here to view the complete AAA/IHS Global Insight 2014 Thanksgiving Travel Forecast.
Image courtesy: Newsroom.AAA.com via cspnet.com
Image Courtesy: AAA via Grist.com
Found this interesting graphic on Grist in an article titled “How high do gas prices have to get to trigger behavior change? “. So, do Americans really change their driving habits when the gas prices rise? According to the graph, the answer is an emphatic yes. The article quotes AAA saying, ” A AAA survey conducted at the beginning of the month found 84 percent of respondents saying they have changed their driving habits or lifestyle in some way in response to recent gas-price increases, and 87 percent would change driving habits further if prices remain this high for long. The most common change adopted so far is combining trips and errands, which 60 percent of respondents say they’ve done. And 16 percent say they’ve purchased or leased a more fuel-efficient vehicle.” Read the entire article here.
Note: If the gas prices continue to rise with the drum beats of war getting louder and louder by the day, we can expect to see many drivers ditching their cars and opt to taking transit to work and to other places. I hope the transit agencies do everything in their power to demonstrate the conveniences of riding a bus/train and entice these flocking masses to continue using transit as a primary option for getting around. Oh, the big question I have in mind – Are the American transit agencies equipped to handle this sudden spike in ridership? Many transit agencies are hobbled by poor funding patterns over the years and it will be hard to meet this new segment of ridership arrives to what is an already exploding demand. Let’s see what happens. (Oh, no matter what the scenario is, one can expect to see a decline in VMT numbers again).
(Source: Reddit.com)
The brilliance of this image lies in exposing the hypocracy surrounding the escalation in gas prices. Too bad such political ploys have become the norm at Capitol Hill. Can we let the President focus on solving the nation’s problems and spare him these silly distractions? Compelling enough for a web post.
Image Courtesy: via Reddit
Nice work, again, by our awesome folks at GOOD magazine.. This is probably the most direct correlation between gas prices & bike sales I’ve seen in a long time.. In a 2008 survey, 95 percent of bike store owners said customers cited high gas prices as a reason for their bike-related purchases
(Source: U.S. Government Accountability Office)
Background
In 2008, GAO reported that 1,088 oil industry mergers occurred between 2000 and 2007. Given the potential for price effects, GAO recommended that the Federal Trade Commission (FTC), the agency with the authority to maintain petroleum industry competition, undertake more regular retrospective reviews of past petroleum industry mergers, and FTC said it would consider this recommendation. GAO was asked to conduct such a review of its own to determine how mergers and market concentration—a measure of the number and market shares of firms in a market—affected wholesale gasoline prices since 2000.
GAO examined the effects of mergers and market concentration using an economic model that ruled out the effects of many other factors. GAO consulted with a number of experts and used both public and private data in developing the model. GAO tested the model under a variety of assumptions to address some of its limitations. GAO also interviewed petroleum market participants.
Study Findings
Image Courtesy: GAO
GAO examined seven mergers that occurred since 2000—ranging in value and geography and for which there was available gasoline pricing data (see table)—and found three that were associated with statistically significant increases or decreases in wholesale gasoline prices. Specifically, GAO found that the mergers of Valero Energy with Ultramar Diamond Shamrock and Valero Energy with Premcor, which both involved the acquisition of refineries, were associated with estimated average price increases of about 1 cent per gallon each. In addition, GAO found that the merger of Phillips Petroleum with Conoco, which primarily involved the acquisition of oil exploration and production assets, was associated with an estimated average decrease in wholesale gasoline prices across cities affected by the merger of nearly 2 cents per gallon. This analysis provides an indicator of the impact that petroleum industry mergers can have on wholesale gasoline prices. Additional analysis would be needed to explain the price effects that GAO estimated.
GAO used two separate measures of market concentration, one which measured the number of sellers at wholesale gasoline terminals and another which measured the market share of refiners supplying gasoline to those sellers, and found that less concentrated markets were statistically significantly associated with lower gasoline prices. For example, for wholesale terminals with more sellers—i.e., terminals that were less concentrated—GAO estimated that prices were about 8 cents per gallon lower at terminals with 14 sellers than at terminals that had only 9 sellers. This result is consistent with the idea that markets with more sellers are likely to be more competitive, resulting in lower prices. Using the second measure of concentration, GAO similarly found a statistically significant association between prices and the level of refinery concentration, with less concentrated groups of refineries associated with lower prices.
GAO Recommendation
This study reinforces the need to review past petroleum industry mergers, and GAO continues to recommend that FTC conduct such reviews more regularly and develop risk-based guidelines to determine when to conduct them. FTC reviewed a draft of this report and supports GAO’s recommendation to conduct more reviews of past petroleum industry mergers.
Click here to download the full report.
(Source: Autoblog, Bloomberg & ThisDay)
America might get most of its oil from Canada, but the moves that Organisation of Petroleum Exporting Countries (OPEC) makes still reverberate here. Thus, a statement by the Kuwaiti Oil Minister Sheikh Ahmed al-Abdullah al-Sabah to reporters yesterday probably won’t help decrease domestic gasoline prices any time soon. OPEC’s al-Sabah said that the organization will not consider increasing production until the price of a barrel of oil reaches $100.
Crude oil traded in New York has climbed almost 60 percent this year, after plunging more than $100 in five months at the end of 2008 as the global recession curbed demand for fuel.
Oil futures rose above $71 a barrel yesterday for the first time in seven months, and traded at $71.18 as of 9:14 a.m. on the New York Mercantile Exchange.
OPEC had in the wake of the record oil plunge noted that its revenue had been adversely affected, a development which prompted members countries to set back 35 of the 150 projects due to come on line in the next few years to expand supply. OPEC predicted stronger demand as it decided May 28 in Vienna to keep production quotas unchanged. OPEC agreed at three meetings last year that the 11 members with production quotas would reduce output by 4.2 million barrels a day.
OPEC Secretary General, Abdalla El-Badri , had stated that falling prices of crude oil would not only affect investments in both the upstream and downstream, but will delay future investments.
He raised fears that if the present situation does not change, it will lead to cancellation of future investments and automatically affect oil supply to the market.Following the recent price rally, OPEC at its May 28 meeting agreed to leave outputs at their present levels. Lead producer, Saudi Arabia had predicted that oil prices would likely rise to around $75 a barrel by the end of the year on the back of growing demand in Asia .
OPEC President, Angola ’s Oil Minister, Botelho de Vasconcelos had noted that oil should be between $70 and $75 a barrel to cover the costs of production.OPEC’s Director of Research, Hasan Qabazard , had at an Energy conference a fortnight ago expressed fears that oil prices could fall again because fundamentals were still weak.The OPEC scribe had noted that oil markets were still weak, pointing out that the current price “rally may be unsustainable in the short term because the “rally is driven by funds rather than fundamentals”. However, United States investment bank, Goldman Sachs had stated that a potential economic rebound alongside production cuts by the OPEC could prop up price to $85 a barrel by the end of the year and $95 a barrel by the end of 2010.
TransportGooru Musing:
1. The power of the cartel and its influence in manging the oil prices can only be countered with sustained investments world over in alternative fuel technologies such as electric vehicles ( like in US, Japan and Europe) and hydrogen technology (Norway has a solid lead here).
2. The developing economies are going to have a tougher time in this round compared against the previous years, especially with the recession still showing its strong grip in many countries. Especially, for China and India high oil prices can be crippling as they are battling to out of the recession.
3. Speculative trading in the markets should be reined in (a very hard to execute. Period.
4. Above all, the only real sense of control remaining for ordinary people against this oil mafia is to simply repeat what they did in 2008 – stop driving unless it is really, really necessary. If there is a transit alternative, park the damn car and take the bus or train. Try and find if you have a carpool option available in your city. It might be ridiculous to think about this “shun your car” as an option here. But the secret lies in the “power of one” – as an individual your contribution might be negligible but if done effectively in every community it can make a serious impact.
(Source: Esquire via Planetizen)
Nate Silver, the baseball stats guy turned election predictor, takes a look at the statistics showing that Americans are driving less.
Graphic: Bryan Christie Design/ We are driving a lot less in this country, even less than one would have expected in a bad economy with fluctuating gas prices. The graph above charts 1) actual miles driven per capita in America during each January for the last thirty years and 2) how many miles per capita we could have been expected to drive based on my model, which accounts for changes in population, gas prices, unemployment rates, and other factors. The downward trend last year was stark. Indeed, Americans have rarely cut back on their driving so consistently for so long.
In January, according to statistics compiled by the Federal Highway Administration, Americans drove a collective 222 billion miles. That’s a lot of time spent behind the wheel — enough to make roughly eight hundred round-trips to Mars. It translates to about 727 miles traveled for every man, woman, and child in the country. But that figure was down about 4 percent from January 2008, when Americans averaged 757 miles of car travel per person. And this was no aberration: January 2009 was the fifteenth consecutive month in which the average American drove less than he had a year earlier.
Gas prices, of course, were exceedingly high last summer, peaking at $4.06 a gallon in July 2008; it isn’t surprising that Americans were driving less then. But prices have since fallen by more than half, and Americans have yet to pick up the pace on the roads.
How much of it is just a result of the bad economy? The unemployment rate has soared significantly since last summer; perhaps the only good thing about losing your job is that you no longer have to endure the drive to work.
Thus, the continued decrease in driving today reflects, in part, a delayed reaction to hundred-dollar-a-barrel oil. Maybe our commuter finally did get fed up and move his family to the city, but it took him until now to do so. The real test will come as the summer unfolds and Americans have had time to get “used to” lower gas prices.
Still, there is some evidence that more Americans are at least entertaining the idea of leading a more car-free existence. Between October 2004, when gas prices first hit two dollars a gallon, and December 2008, when they fell below this threshold, three cities with among the largest declines in housing prices were Las Vegas (-37 percent), Detroit (-34 percent), and Phoenix (-15 percent), each highly car-dependent cities. Conversely, the two markets with the largest gains in housing prices were Portland, Oregon (+19 percent), and Seattle (+18 percent), communities that are more friendly to alternate modes of transportation.
(Source & Image: LA Times)
Gasoline consumption in California began falling in April 2006, and for 11 straight calendar quarters dropped below gas use in the year-earlier period even though the state added 790,000 new licensed drivers. First-quarter gasoline use hasn’t yet been released by the California State Board of Equalization, which on Thursday said Californians consumed 1.21 billion gallons of gasoline in January, down 22 million gallons, or 1.8%, from the previous January.
That was California’s first brush with $3-a-gallon gas. It lasted just two weeks in 2005, according to the Energy Department’s weekly survey of filling stations, but it was long enough to trigger behavior changes.
For all of 2005, gasoline consumption rose by just 30 million gallons to 15.95 billion gallons, according to the state equalization board, which gathers the numbers from taxes paid by fuel distributors. The pace was well off the boom years from 2000 to 2004, when gas use grew by an average of 343 million gallons a year.
“The tipping point is $2,” said Amy Myers Jaffe, senior energy analyst at Rice University’s James A. Baker III Institute for Public Policy in Houston. “People start to respond to fuel prices and make changes at $2 a gallon. At $3 a gallon, it becomes noticeable. It really gains in momentum. The longer the price stays higher than $3, the deeper and more lasting the structural changes.”
In 2007, with gasoline prices above $3 a gallon for 34 weeks, California consumption fell 270 million gallons below 2005 levels. In 2008, with gasoline topping $4.58 a gallon in July and the depth of the nation’s economic crisis beginning to sink in, Californians used 910 million fewer gallons than they did in 2005.
Messer turned to a different fuel. Stephen Stone of Norwalk bought an all-electric Zap Xebra. Robert Cruz of Oxnard went back to a 1970 Volkswagen because it got better mileage than anything else he’s driven. Alan Thomas of Oxnard adds a few gallons of transmission fluid to his tank to cut fuel costs.
“Sometimes I just used to go out and take a drive,” Thomas said. “When was the last time you heard anyone say, ‘I’m going out for a drive’? I don’t drive any more than I have to now.”
Millions of other Americans also are parking more. A 2008 Brookings Institution report called “The Road . . . Less Traveled” found that “consistent annual growth” in vehicle miles traveled in the U.S. leveled off in 2004. By 2007, miles driven declined for the first time since 1980 and at the fastest rate since the end of World War II, said Robert Puentes, senior fellow at Brookings’ metropolitan policy program and a co-author of the report.
“Americans have simply been driving less. . . . At the same time driving has declined, transit use is at its highest level since the 1950s, and Amtrak ridership just set an annual ridership record in 2008,” Puentes wrote.
Some experts say Americans are far less likely to accept high fuel prices than their European counterparts.
In the U.S., “we have always had cheap gasoline for the most part and most Americans don’t feel like they have that much of an alternative,” said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas. “The higher prices go here, the more people feel like they are being taken for a ride.”
Another factor in changed driving behavior is anger, said Suzanne Shu, an assistant professor of marketing at the UCLA Anderson School of Business. Price surges in other consumer items, such as milk, tend to get lost in larger grocery bills. But buying gas is often a trip of its own, and the price is “in your face, almost every block,” Shu said.
Click here to read the entire article.
(Source: Reuters)
Facing volatile energy prices and a major economic downturn, Americans turned to public transportation more in 2008 than they have in over 50 years, a transit group said on Monday.
Americans took 10.7 billion trips on public transit last year, up 4 percent from 2007, the American Public Transportation Association said. This is the highest level of ridership in 52 years.
“Where many of the other indicators in our economy are down, public transit is up,” APTA Vice President Rosemary Sheridan told Reuters.
U.S. gasoline prices set records in 2008, rising above $4 a gallon in July. Gasoline costs began to cool off in the fall, however, as the effects of a global economic downturn began to curb oil demand.
Click here to read the entire article. Attached is the American Public Transportation Association (APTA) press release on this topic.
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