Cascadia Scorecard Weblog

Driving With Alcohol

Alcohol can lead to all kinds of unintended consequences, but who knew it could lead to energy independence? Apparently, the Brazilians did. Processing sugar cane into ethanol is expected to help Brazil meet its rising energy demands in a big way. According to an article in the New York Times, officials expect that within a year the country will become fully energy self-sufficient thanks largely to putting sugar in gas tanks.

Brazil's story is encouraging, but it's hard to know precisely what conclusions to draw for North Americans.

We can't buy Brazil's success by importing cane-based ethanol because our current policy regime all but disallows it. The US (and Europe too) slaps stiff duties on sugar imports--to the tune of 54 cents a gallon on cane-based ethanol imports, enough to render Brazilian ethanol at a competitive disadvantage.

We can't copy Brazil's success because our colder latitudes don't support sugar cane. Even Florida is considered only marginally productive for sugar cane and it comes at a horrific cost to ecological treasures like the Everglades. Hawaii produces sugar too, but its land base is far too small to meet American demand.

We can't imitate Brazil's success with northern crops like corn because producing corn-based ethanol is far too energy intensive.

Under the best conditions, corn ethanol yields only about 1.3 times as much energy as is required to produce it. Brazilian sugar cane, on the other hand, can yield 8 times as much energy; and producers think that efficiency can go to 10 times.

And even if we did somehow have access to Brazil's ethanol, our vehicle fleet couldn't take full advantage of it. But Brazil's can: more than 70 percent of cars sold in Brazil are "flex fuel" allowing drivers to alternate between ethanol and petroleum as price (or conscience) directs. Even better for Brazilian drivers, the flex fuel engines don't cost any more than conventional motors.

Sugar cane production is proving to be a boon to Brazil's economy, not to mention to its ecological footprint. (Nowadays, even the cane waste products are getting recycled back into various manufacturing processes.) But cane is not a free ride either: it's often grown on former pasture land and many fear that this will push livestock owners to clear more Amazon rainforest to make room. And cane growers are now pushing for genetically modified versions that will boost energy output and also resist disease and droughts. But GMO sugar cane may pose other unforeseen ecological problems down the road.

For me, the lesson from Brazil is two-fold. First, solving our biggest environmental problems (e.g. fossil fuel addiction and climate change) often forces us into other environmental compromises like deforestation and genetic crop modification. It's frustrating, of course, but real-world problems like energy consumption rarely offer no-downside solutions.

Second, there is not going to be any one-size-fits-all solution to the world's energy demands. Brazil can use sugar cane, but North Americans will have to figure out something else--something homegrown if independence is important. Conservation surely must be part of our effort to ratchet down reliance on oil, but we also must find local technologies and local resources for our energy needs.

Rage Against the (Hybrid) Machine

Some California drivers are getting all steamed up that they have to share the carpool lanes with single-occupant hybrids, like the Toyota Prius and Honda Civic, under a new state program.  Some of the complaints, of course, should be taken with a grain of salt.  Said one fumer in an online discussion group:  "These [drivers] barely go 65 mph and allow no one to pass them on the right... Talk about road rage!"  It's hard to feel much sympathy for someone whining about not being able to exceed the speed limit.

But I do think there's reason to be concerned that extra hybrids in the HOV lanes may be slowing down carpools & buses.  From the LA Times article:

"There's not enough excess capacity to absorb the hybrids," said James Moore, director of USC's transportation engineering program. "I think the foreseeable outcome here is that the congestion advantage we traditionally attribute to [carpool] lanes will disappear."

Promoting hybrids could help save fuel. But there's plenty of reason to believe that -- looking at overall efficiency of road transport -- filling the HOV lanes with hybrids could do more harm than good.  Seems to me that California was smart in limiting the number of hybrids allowed in the carpool lanes, and studying the effects before proceeding.

Hybrid Whiplash

What to make of this news from the Eugene, OR Register-Guard?

In a report that's sure to be controversial, CNW Marketing Research of Bandon concludes... that, even though hybrid cars use less fuel, they require more energy - and are therefore worse for the environment - than conventional cars because their design and manufacture are more complex and the costs of disposal or recycling are higher for their batteries, electric motors and other specialized components. [Emphasis added.]

Hybrids use more energy than regular cars? Is this real, or just pro-SUV propaganda?

Now, just to be clear, I haven't reviewed the study myself. But the online materials that's CNW's made publicly available seem serious & fair-minded -- not like a cheap hit-job on hybrids, but rather a sober analysis that reaches some unexpected and counterintuitive conclusions.

That said, I think there's very good reason not to take the study too seriously. Not yet -- and not until the authors can answer some tough questions about what their study implies.

CNW does deserve credit for looking at energy costs over a vehicle's entire life cycle--not just what it consumes on the road, but also what it costs to manufacture, distribute, repair, and dispose of a car. But some of their numbers seem, to put it mildly, a little hard to believe.

According to the study's methods, a Honda Civic (not a hybrid, but a regular model) uses only about 30 percent of its life-cycle energy as gasoline. (See here for the chart.) About 10 percent each go to parts, manufacturing, repair, dissassembly, and replacement; and 20 percent go to other energy costs.

Let's say that's reasonably representative of other models -- that is, gasoline accounts for only about 30 percent or thereabouts of the life-cycle energy costs of owning and operating the average car or light truck. But according to the US Energy Information Administration, gasoline consumption accounts for 17 percent of total energy consumption in the US (see here for total consumption, and here for total gasoline). So that would imply that car manufacture, repair, recycling and other energy costs account about 40 percent of the total US energy supply.

Forty percent? That's just plain wrong. The entire US industrial sector only consumes 33 percent of the nation's energy. So the subset devoted to cars has to consume only a fraction of that.

Just so, it seems downright implausible that cars are responsible for some 57 percent of the nation's total energy use (17 percent for gasoline, 40 percent for manufacture, repair, recycling, etc.). Cars use a lot of energy, to be sure -- but I simply can't believe it's that much.

So that means either: the Honda Civic is a vastly atypical car, and uses substantially more manufacturing energy than most other cars; that I've misread the (limited) available data from CNW; or that the study's authors have some explaining to do if they're going to convince me that I should pay much attention to their results.

Poll: Americans Hate/Love Higher Gas Tax

Americans strongly reject new gas taxes. According to a new NY Times/CBS poll, 85 percent oppose higher federal gas taxes. Not too surprising--except that the very same poll also found something quite different...

Americans strongly reject support new gas taxes--so long as the tax revenue is earmarked for specific investments. The most popular investment? Fighting global warming. 59 percent would support a gas tax if the result was less climate change. Slightly less popular was reducing dependence on foreign oil: 55 percent supported the tax in that case.

So surely gas tax increases would be super-popular if they abetted core American desires like fighting terrorism and reducing income taxes? Uh, nope. Only 28 percent would support a higher gas tax if its intent were to reduce other taxes. And only 24 percent would support it as a measure to fight terrorism.

I'm not sure I understand what exactly the poll reveals. But my hunch is that when it comes to gas consumption we Americans are a conflicted bunch; and we tend to see our fossil fuel use in ethical or even moral terms. We're not necessarily interested in paying more for gas in order to take home bigger paychecks, or even to defend ourselves. But when it comes to offsetting some of the harm of gasoline use--things like climate change--we would support higher gas taxes with a landslide.

Do Mess With Taxes

The basic point here (NY Times, registration required) is pretty good: the idea of coupling a gasoline tax increase with a cut in payroll taxes deserves a much closer look.  It makes sense as a policy -- gas taxes should be higher, and a payroll tax cut could help soften the blow.  Plus, pairing a tax increase with a tax cut seems to draw far broader political support than a straight-out hike in gas taxes:

The gasoline tax-cum-rebate proposal enjoys extremely broad support. Liberals favor it. Environmentalists favor it. The conservative Nobel laureate Gary S. Becker has endorsed it, as has the antitax crusader Grover Norquist. President Bush's former chief economist, N. Gregory Mankiw, has advanced it repeatedly.

Ok, so it's a good idea.  But I can't help myself -- I'm going to pick some nits.

First, I think it's going too far to claim, as the article seems to, that it will be easy to sell this kind of thing to the public. Voters seem to forget about tax cuts: for example, in the runup to the 2004 election -- and despite the administration's efforts to tout their income tax cuts -- US voters were more likely to say that their taxes had gone up over the previous 4 years than down.  On the other hand, everyone knows when gas prices go up -- it's emblazoned over every filling station.  So people will be reminded of the tax increase every day, but notice the tax cut they only see if they look carefully at their payroll records.  That's a pretty good recipe for outrage, unless you work really, really hard to explain to people what's happening.

Second, there are still some regressive effects here.  If you're a retired senior, you don't pay payroll taxes -- so you'll see no benefit from the payroll tax cut.  But you'll still be hit by higher gas taxes.  Same thing if you're unemployed.  (Undoubtedly the AARP, among others, will have a few things to say about this.) 

Third -- why just gas?  I know, I know, oil makes us vulnerable to foreign political shocks, sucks money out of the economy, yada yada.  But gas represents only 43 percent of total US petroleum consumption (see here for details); so we should be taxing all petroleum consumption, not just gas.  And more broadly, natural gas and coal are both major greenhouse gas sources -- coal even moreso than gasoline.  Coal-fired power plants are also bad news for air quality, and put mercury in our fish.  And natural gas production within the US is headed in the same direction as oil--down--which means that soon enough our natural gas imports will start sucking serious money from the economy, just as oil imports do now.  All of which suggests to me that a broader tax on carbon, or natural resource use, would be better than just a tax on gas -- and might even allow for steeper payroll tax cuts.

And finally -- gas taxes are all well and good.  But they're not the be-all-end-all when it comes to promoting fuel efficiency.  Pay by the mile car insurance and feebates get even less air time in policy circles than tax shifting -- but arguably would be just as effective, if not moreso, at promoting fuel conservation. Obviously, I'm always glad to see gas taxes discussed in a public forum.  But it would be even niftier to see other worthwhile ideas get some attention.

Hybrid Hype: Incentives Gone Wild

Hybrid cars are good for us, right? So policymakers should provide incentives--things like tax breaks, access to HOV lanes, and free parking for hybrid drivers.

Well, not so fast, says a great article in today's Washington Post. [Free registration req'd.] There's growing reason to believe that those incentives for hybrids will make things worse--actually generating more gasoline use, not less. That's because many of the incentives confuse the means for the end.

Reducing fuel use (and attendant ghg emissions, air pollution, etc.) is the goal; getting drivers into hybrids is simply one instrument in pursuit of that goal.

But one of the more popular incentives to boost fuel efficiency has been to encourage hybrid ownership by offering hybrid drivers access to HOV lanes, even when the drivers are alone. And as the article rightly points out:

An incentive -- whether it's access to a carpool lane or cut-rate financing -- still aims to put another car on the road, and that undermines efforts to encourage carpooling.

Giving over HOV lanes to hybrids is probably counterproductive. In Virginia, where allowing hybrids in HOV lanes was pioneered, officials are worried that solo drivers in hybrids are clogging the high-capacity lanes and thereby discouraging carpools (because carpooling is no longer any faster than driving alone). In fact, 25 percent of all Virginia HOV lane users are hybrid drivers. And despite their hype, hybrids are not so fuel efficient that they can offset the fuel efficiency of an ordinary car with two or three riders. So the fuel efficiency of Virginia hybrids may become illusory as the vehicle fleet actually consumes more gas because drivers give up carpooling.

Same goes for other popular incentives: tax breaks and free or reduced-price parking. These incentives encourage people to drive by making it cheaper.

And if some incentives are wrong-headed, it's because they seem to miss the reason why hybrids are good in the first place. If we want to reduce fuel use, it's hard to see why hybrids deserve special tax breaks that are not afforded to buyers of other fuel efficient gas-powered cars (some of which are actually more efficient than certain hybrids). What's so special about hybrids?

But wait! Incentives catalyze the market. That's the basic argument for hybrid-centric policies. The idea is that by encouraging people to get into hybrids now, we'll reduce fossil fuel consumption down the road, when hybrid cars become cost-competitive.

There's some merit to this line of reasoning, but it's starting to seem outdated. The market for hybrids is scorching hot and growing--it probably doesn't need to an additional catalyst. Hybrid sales in 2005 were 10 times higher than in 2001 (and 20 times higher than 2000) and the growth looks set to continue. Incentives are probably a contributing factor, but high fuel prices are probably a much bigger reason.

What's more, the incentives may actually be counter-productive to the real goal. As we've seen, HOV lane access encourages solo driving; free parking and tax breaks make driving cheaper. (Plus, there may be weird counter-intuitive problems that arise from buying certain kinds of hybrids.)

The bottom line is that there's nothing especially laudatory about hybrid cars in and of themselves. The only thing special about them is that--generally speaking--they burn less gas per mile than internal combustion cars. But as the hybrid market diversifies into SUV and Lexus flavors, there's increasingly less reason to lionize hybrids per se. What really matters is fuel efficiency--plain old unsexy fuel efficiency, whether the car runs on gas, electricity, LNG, switch grass, or tiny elves.

I'm not saying that all incentives should disappear, but the incentives should be for fuel efficiency, plain and simple. It doesn't do much good to encourage buying a hybrid Ford Escape when a vanilla Civic is far more eco-credible. Efficient hybrids will still benefit, as will other fuel-sipping cars--just the kind we want on the road.

And there's an asterisk here too: the incentives shouldn't conflict with other instruments to reduce fuel use. Allowing solo drivers into carpool lanes makes about as much sense as slapping a surcharge on bus fare or bicycles to fund rebates for hybrids.

So what kind of incentives would work to increase the fleet's fuel efficiency? Feebates. Gas (or carbon) taxes. Pay-As-You-Drive insurance. Blah, blah, blah. Plus, lots of other stuff that would help make driving a choice, not a necessity.

Futility Revisited

Apparently I didn't do such a good job in this post explaining why I found this New York Times article on higher-mileage, gas-electric hybrid SUVs so troubling.  So I'll try again.

To recap -- the Times article claims that, under the system governing vehicle fuel economy in the U.S., selling a hybrid Escape lets Ford sell an additional Lincoln Navigator without running afoul of federal standards.  In other words, while buying an Escape may mean that you're driving a more efficient vehicle, it doesn't mean that the average fuel economy of all the Fords on the road will change one whit. 

A couple commentors said this is bunk.  But I think the article is onto something.  Take a look at the fleetwide fuel economy for Ford's light truck fleet over the last few years for which I could get data:

2000:  21.0 mpg

2001:  20.5 mpg

2002:  20.7 mpg

2003:  21.3 mpg

Now, remember, the CAFE standard for light trucks over this period was 20.7 mpg -- that is, the average mpg for all the light trucks that Ford sold had to be 20.7 or more, or the federal government would levy a fee on each vehicle.  From the numbers, it's pretty clear that Ford has been doing its level best to keep its light truck fleet at or near 20.7 each year -- maybe a little above or below, but not enough to incur any penalties (under CAFE rules, exceeding the standards in one year lets you dip below them in subsequent years).

So how does the company fine-tune its vehicle sales to fall right at the CAFE standard?  By tweaking its pricing, offering deeper discounts to ramp up sales of higher-mileage pickups and SUVs, while still selling as many hulking SUVs--vehicles with terrible gas mileage but huge profit margins--as it can without running afoul of the standards.

My point here is that the introduction of the 35 mpg Escape, by itself, probably doesn't change this dynamic.  Ford is legally required to maximize its profit -- otherwise it faces the threat of a shareholder lawsuit.  So it's got an incentive to use whatever means it can to keep the high-profit SUVs moving off the car lots.  And that means that selling more Escapes won't necessarily boost the overall efficiency of the vehicles Ford sells.  Higher gas prices might boost fuel economy; stricter standards might as well.  But as nifty as the high-tech hybrid Escape may be, buying one won't guarantee that Ford's overall mileage is moving in the right direction.

Obviously, the existence of the Escape has spinoff benefits.  Among them, it undercuts the car-makers arguments that major improvements in vehicle efficiency are technically impossible.  Hybrid SUVs show that the feds could probably lift CAFE standards for light trucks above 30 mpg without forcing automakers to do much, if any, R&D.  True, the big auto manufacturers could always say that they can't afford to make trucks more efficient.  But they can't say that they don't know how.

But there's yet another perverse market effect hidden in the Escape.  CAFE has two tiers, with a higher mileage standard for cars than light trucks.  To the extent that the Escape (a light truck) attracts buyers who'd otherwise go for a Taurus (classified as a car), it could tilt Ford's overall mix away from cars and towards trucks -- which, paradoxically, could lower the average fuel economy for Ford's entire vehicle fleet.  (Sheesh, this stuff is weird.)

So, all this goes to say that a system can have unpredictable results that undermine the best intentions of any one individual.  That's not a reason to throw up one's hands in despair -- but it is a reason to think that changing the system is even more important than making the right kinds of purchases.

Principles of the State of the Union Address

I hadn't intended to join the cacaphony of bloggers and pundits who are Monday-morning-quarterbacking the State of the Union address. But NEW's all-star board member, Laura Retzler, asked a great question last night that I've been puzzling over since: what's NEW's take on Bush's plan to end the nation's addiction to oil?

It later occurred to me--too late to answer Laura--that my reply should have been rather obvious to me. NEW is developing a concise statement of values and principles, that will orient and unify our research. Among these values are two that are especially germane to energy security: "make prices tell the truth" and "build complete, compact communities."

In his speech Bush called out technological innovation as the primary way to break the addiction. Certainly he's right that technology should play an important part in diversifying our energy portfolio--especially certain types of biofuels, new clean energy sources, and lighter-weight vehicles, for just a few examples that NEW promotes. Yet technological solutions may not be the surest path to ending our addiction.

That's where NEW's principles come into the picture.

"Making prices tell the truth" is especially important. The price of gasoline does reflects only the direct costs of extracting, refining, and distributing it, not the full costs that are externalized to society, such as air pollution, climate change, and even entanglement in unstable regions. By the same token, "free" parking often carries with it high costs, similarly externalized. With a smart restructuring of parking incentives, including parking taxes, there's reason to believe we can achieve substantial gains in both energy efficiency and conservation.

Another of the principles, "build complete, compact communities," would improve home energy consumption and render driving, which has high energy demands, optional or even irrelevant for many people. We already know that compact urban development with good transit and pedestrian alternatives yields dramatic reductions in energy need, even while it boosts health for residents.

NEW's principles may not point to flashy promises of zero-pollution cars or safe nuclear energy. (And they may not come with strings attached to big subsidies.) But they point to hidden levers in our economy and society--small tweaks that can yield outsize results for energy security.

So that's may belated reply, Laura. Thanks for setting me to thinking about this.

*********

By the way, here's the full text of Bush's remarks on energy last night:

Keeping America competitive requires affordable energy. Here we have a serious problem: America is addicted to oil, which is often imported from unstable parts of the world.

The best way to break this addiction is through technology. Since 2001, we have spent nearly $10 billion to develop cleaner, cheaper, more reliable alternative energy sources, and we are on the threshold of incredible advances. So tonight, I announce the Advanced Energy Initiative, a 22 percent increase in clean-energy research at the Department of Energy, to push for breakthroughs in two vital areas. To change how we power our homes and offices, we will invest more in zero-emission coal-fired plants, revolutionary solar and wind technologies, and clean, safe nuclear energy.

We must also change how we power our automobiles. We will increase our research in better batteries for hybrid and electric cars, and in pollution-free cars that run on hydrogen. We will also fund additional research in cutting-edge methods of producing ethanol, not just from corn but from wood chips, stalks or switch grass. Our goal is to make this new kind of ethanol practical and competitive within six years. Breakthroughs on this and other new technologies will help us reach another great goal: to replace more than 75 percent of our oil imports from the Middle East by 2025. By applying the talent and technology of America, this country can dramatically improve our environment, move beyond a petroleum-based economy and make our dependence on Middle Eastern oil a thing of the past.

Flat Liners

Interesting.  It looks as though gasoline consumption in the Pacific Northwest has more or less plateaued since 1998, when gas prices were at an inflation-adjusted low point.  Take a look, especially at the little flat part on the far right of the trend line:

Of course, this is based on partial-year data for 2005; actual consumption for the year may be a bit higher (because of a strong economy) or a bit lower (because of high prices).  But even if 2005 proves to be a bit higher than 1998 in the final analysis, it's still a surprising trend.  With the exception of the oil crisis/recession of the late 1970s and early 1980s, gas consumption has grown pretty consistently since the 1950s.  And per capita consumption of gas had barely budged since the early 1980s -- our consumption has been tightly correlated with total population growth.

But if these numbers are right, we're starting to see some concrete signs that high prices are begininning to bite.  From 1999 through last year, average per-capita gas consumption throughout the region fell by 7 percent.  That's not a huge amount, mind you.  But it's something.

It's too early to tell whether that trend will continue--whether we'll continue to be able to add new residents without increasing our total consumption.  I doubt it.  Still, the little flat part to the right of that graph gives me some reason to be hopeful.

Driving Puzzler

Eric Pryne of the Seattle Times today provides a welcome but puzzling update on a project we’ve been watching for some time.

The gist:

The 400 volunteers in the Puget Sound Regional Council's "Traffic Choices" study have been paying virtual tolls since July. Devices mounted on their dashboards track where they travel and transmit the information to a central computer. Charges are deducted from prepaid "endowment accounts."

Those accounts are just play money. But if there's anything left in them when the experiment ends in February, participants get to keep it — in real dollars.

That's the carrot. They can save money by not driving as much, by choosing less-congested highways, or by staying off the road at rush hour.

As we’ve argued for years, paying-as-you-go for driving, rather than in occasional lump sums, ought to be a powerful incentive to economize on miles, trips, and fuel.

Here’s the puzzler:

[Study director Matthew] Kitchen says interim results indicate that, as a group, the study's 400 participants actually are driving a bit more than they did before the experiment started. But they're also paying a little less than they would have if the tolls had been in force when researchers first began monitoring their driving.

That could mean the volunteers are avoiding roads with the steepest tolls at times, even if it takes them out of their way, he says. "But we may find something very different when we do a more detailed analysis," he cautions.

What’s going on here? You put a by-the-mile price on driving and people do more of it? That’s unexpected!

Study results won’t be complete for months, of course, and these preliminary trends may be a seasonal fluke, a statistical error, or an effect of some unrelated factor such as a fuller employment.

But it could also be that drivers are much quicker to change roads than to change modes, or to reorganize their weekly travel plans. Stated that way, it’s less surprising. Past experience suggests that it takes some time for people to adjust where they go.

Still, by the time the study is done, I’ll have to rethink some assumptions if drivers haven’t reduced their total miles driven as well as their peak-hour trips on high-priced, congested roads.

Japan Gets PAYD

Here's a little something I'll be keeping an eye on:  Japanese insurance company Aioi has started to offer pay-by-the-mile car insurance. (See page 2 of this pdf.)  This is an especially nifty development, since it means that Aioi will be working out some kinks in the technology (the company will verify mileage with a device installed in policyholders' cars) which might help PAYD make the leap across the Pacific.

As we've said many times, pay-as-you-drive insurance (or PAYD) offers huge advanatages. Overall, the system is fairer than the all-you-can-drive insurance that most of us buy:  people who don't drive much tend to incur less crash risk, and they wind up subsidizing people who do a lot of driving.  Even the policies that give a little price break for low-mileage drivers still make the people who drive the least subsidize everyone else.  And not only is PAYD fairer to low-mileage drivers, it also creates an automatic disincentive for extra driving:  just as an all-you-can-eat buffet makes it more likely that you'll gorge yourself, all-you-can-drive insurance makes it more likely that you'll drive more than your really need.

We've long been hoping that some auto insurer will offer PAYD in our part of the world.  In 2003, Oregon even passed tax incentives to sweeten the pot. But so far, no company has taken the bait.  And that's pretty understandable -- PAYD suffers from the "first mover" problem, in that the first company to offer PAYD not only has to create a new market for this kind of insurance, it also has to work out all of the technical kinks in tracking and verifying policyholders' mileage. 

But if US insurers can build on Aioi's technology, much of the technological part of the first mover problem gets solved.  And if Aioi can figure out how to market PAYD in Japan, it just might convince US insurers that there might be the same kind of business opportunity on this side of the Pacific.  Neat!

Gas Fees: The Good, The Bad, and The Curious

I'm not sure, exactly, whether this news is promising or disappointing: the San Jose Mercury News reported last week that environmental advisers to Governor Schwarzenegger are calling for a new fee on gasoline that would help pay for incentives to reduce climate-warming emissions.

The good news here is that they're considering fees on gasoline in the first place. 

The bad news is that the proposed fees are tiny -- just 2.5 cents per gallon, which isn't enough to affect consumption more than a nominal amount.

The good news is that the fees will go to a good cause: there are a lot of inexpensive ways to reduce emissions, so the fees, as small as they are, could do a lot of good -- especially considering that California uses about 15 billion gallons of gasoline per year, so a 2.5 cent per gallon fee would raise $375 million per year. 

The bad news is that opponents are already up in arms, blasting the idea as an unnecessary new tax on gas.

Of course, there's also a curiosity here that's worth noting.  The proposed gasoline fees are similar to the "public goods charge" already levied on electricity bills.  But it seems as though the outrage about new "taxes" is largely reserved for gasoline; fees on electricity get a pass.  Which suggests that gasoline holds a special place in the American psyche -- we pay close attention to anything that can make gas prices go up, but let similar price increases in other parts of the economy slide by unnoticed. 

One possible explanation for this is that we're a car oriented culture, and that we've come to prize cheap, unlimited mobility.  I think that's only partially true.  To me, it seems that we pay so much attention to the cost of gas because it's the only commodity whose price is regularly and consistently advertised on busy streets. Day to day, most people get much more information about gas prices -- which stations have cheap gas, what the recent price trends have been -- than about anything else they buy.  The way that gas is advertised has made us super-attentive to its price. 

Which makes me wonder what the world would be like if the harmful side effects of gasoline (money shipped out of the local economy; greenhouse gas emissions; cost of foreign entanglements; etc.) were advertised as broadly as its price.

Of Green Mayors and Red Queens

Not much new here, really, but still worth noting: from the Seattle P-I, "Seattle sets own Kyoto goals for emissions."

To me, the thing that's most noteworthy is the admission that, if greenhouse gas emissions are really going to fall in a city like Seattle, a lot of the reduction will have to come from the transportation sector.  Seattle's electricity is already, at least nominally, climate-neutral.  Some gains can probably be made in industrial energy efficiency, and in buildings heated with gas or oil.  But the big story is likely to be in highway transportation:  cars, trucks, and buses.

Which leads to a few thoughts.  First, Nickels is making a risky promise, since it's pretty hard for a city -- with its relatively limited range of policy tools -- to get people to use less gasoline and diesel fuel.  The city government can ramp up the efficiency of its own vehicle fleet, including buses.  But that only goes so far; the large majority of the transportation fuel in the city is consumed by private vehicles. 

And while the city can take lots of steps to foster more compact, transit- and pedestrian-friendly neighborhoods -- which are generally far more fuel efficient than sparsely populated suburbs -- it's probably going to have to attract lots of new residents to do so.  (You can't create a dense neighborhood without adding people.)  But that puts the city in a bind: adding new residents could add to the city's emissions tally, even as creating compact neighborhoods reduces it.  So in terms of total (not per capita) emissions, the city could wind up running faster and faster to stay in one place -- kind of like the Red Queen in Alice and Wonderland.

The city is making its goals all the more difficult to reach, given its support for some major road projects (replacement of the Viaduct with a tunnel, plus widening the SR-520 bridge across Lake Washington).  If the transportation planners are correct, bigger roads will generate more car trips (that's what they're for, after all).  Increased traffic capacity comes with benefits as well as costs, of course; but one of the costs is to make it a lot harder to meet Mayor Nickels's emissions goals.

Of course, there are some things that the city can do to encourage people to drive less.  But most of them have to do with making it more expensive to drive -- tolling roadways in the city, taxing parking, and the like.  Those are reasonable policy options -- there are cities in the world that do those sorts of things.  But they'll be tough to pass in what is, to a large extent, still a car-oriented metropolic.

My second big thought here is that -- perhaps -- Seattle shouldn't focus on reducing climate-warming emissions from within the city itself.  This isn't necessarily an obvious point, and there may be no easy way to make this happen in practice.  But there could be easier, and more cost effective, means to reduce such emissions outside the city than inside it.  For example, Seattle city light could work with other utilities in the region to help them become climate neutral.  That could make a big difference to the region's net climate impact -- but it's not the same thing as reducing Seattle's own emissions, which is apparently the bar that the mayor has set for the city.

The mayor's set the city a big task, and I applaud him for it.  But it's going to be tough going -- it'll require a lot of creativity, and perhaps some creative accounting, to get the job done.

Inelasticity? It's a Stretch

It may come as a bit of a surprise:  despite rising gas prices over the past few years, total consumption of highway fuels in the US has actually increased, rather than fallen.  Some have seized on this phenomenon -- prices and consumption rising in tandem -- to suggest that changes in gas prices have no discernible effect on how much gas we actually use. 

The idea that gas prices have no effect on consumption doesn't accord with economic theory, to put it mildly.  And this Excel spreadsheet (courtesy of Charles Komanoff and the ever-informative Todd Litman) sheds some light on what's really going on.  Apparently, even as US gas prices have risen, so have population and GDP.  And GDP growth tends to push consumption levels up -- in fact, over the short term, gas consumption seems to be more responsive to changes in GDP than to changes in prices.

The spreadsheet tries to tease apart the two competing forces, and finds that -- all else being equal -- each 10 percent rise in gas prices is, in fact, accompanied by a 1 percent decline in gasoline sales within a year. Which suggests that, had gas prices remained stable over the past few years, consumption would have risen even faster than it did.

It should come as little surprise that, over short time horizons, substantial gas price hikes only reduce sales a small amount.  People have only so much flexibility to reduce their gas consumption over the short term -- a fact that economists have understood for years. 

But what remains to be seen is whether a sustained increase in gas prices will be accompanied by deeper declines in sales, as people begin to change houses, jobs, or cars to account for higher transportation costs.  That's what economists predict will happen; but  we'll just have to wait to see how well reality matches up with theory.

Cars for the Poor: Strange Bedfellows

UPDATE: I apparently got much of this post wrong.  See this followup post for more details.

This article from the libertarian-leaning Northwest Meridian applauds the Brookings Institution's Margy Waller -- who advocates for big-government programs to subsidize car ownership for people at or near the poverty line.

Strange bedfellows indeed.  The small-government Meridian presumably likes the idea because they feel that transit is expensive, big-government meddling.  Waller welcomes support from all corners, since as she says in this Washington Monthly article:

"[P]oor central-city residents find themselves living further and further away from economic opportunities. Evelyn Blumenberg, a professor of urban planning at UCLA, found that car-driving residents of the Watts section of Los Angeles have access to an astounding 59 times as many jobs as their neighbors dependent on public transit. Even more isolated are the car-less low-income families that now live in the suburbs—nearly half of all metropolitan poor."

Now, somewhat to my surprise, I find Waller's argument on this point fairly convincing:  the fact that many poor folks don't have car really does seem to make it hard for them to find a job.  So, despite my general belief that automobiles are already too heavily subsidized, extending car ownership to the poor and near-poor seems like it could have some substantial benefits in raising their economic prospects.

But my support for Waller's ideas only goes so far.  In fact, I think some are downright nutty.

Waller's biggest-ticket proposal -- which she discusses at length in the Washington Monthly article -- is for the federal government to subsidize commuting to work, through a system of tax credits that would cost a whopping $100 billion each year.  If I read her correctly, the value of the subsidy would be tied to the cost of commutes; that is, longer commutes would come with larger subsidies.

Obviously, Waller is well-intentioned here; she wants to help people cope with a major, and rapidly growing, daily expense.  Recognizing her good intentions, however, isn't the same thing as endorsing her ideas: to me, this is simply one of the most counter-productive, bass-ackwards transportation proposals I've seen for a while.

First, there's this:  why commutes?  Yes, commuting can be expensive, and that can make it more difficult for people to get jobs, and to hang onto them once they have them.  But low income folks face lots of equally necessary expenses -- medical care, child care, and so on -- that can be a barrier to employment.  With so many different and competing needs out there, shouldn't low- and middle-income folks themselves be able to decide for themselves what they'd like to do with a tax credit?  Waller's exclusive focus on the costs of commuting seems strange, and unresponsive to the reality that the cost of transportation isn't the only barrier to landing and keeping a good job.

And then, there's this:  if you pay people to do something, generally speaking they'll do more of it. So if you subsidize commutes -- giving people who commute longer distances a bigger subsidy -- people will inevitably wind up commute longer distances.  They'll choose jobs that are farther away from their homes than they otherwise would; and they'll choose homes that are farther away from job centers.  The result:  more miles driven, at the most congested times of day.  And that means more pressure for new roads; more CO2 emissions and air pollution; more petroleum imports; and perhaps most ominously, more sprawl, which will lock metro-area residents into the same kinds of development patterns that have served the poor so badly in the first place. 

In fact, much of the $100 billion annual commuting subsidy would simply be capitalized into land values, particularly of the most sprawling neighborhoods.  Housing that's inexpensive because it's relatively inaccessible to jobs would gain in value, as the expected value of the commuting subsidy gets incorporated into the purchase price of each house.  I haven't done any serious analysis of this. But my experience with farm subsidy programs tells me that the end result of this sort of subsidy will likely be an aggregate increase in housing prices of somewhere on the order of a trillion or so dollars.  (That's right, Waller's proposing a trillion dollar subsidy for sprawl!)  Much of the gain will be concentrated in the most sprawling housing units with the highest commuting costs.

And then, there's this:  adjusting the subsidy to the cost of the commute means that many folks will opt for a more expensive commute.  So even if you *could* walk or bike to work, the promise of a larger tax bonus might entice you change your commuting habits, or even your job.  Which would mean that, at an aggregate level, commuting to work would probably become more expensive than it is right now -- an economic distortion that would make our already-inefficient transportation system just that much more wasteful.

To me the whole idea of subsidized commutes seems poorly thought through -- and fails to recognize that even well-intentioned ideas can have all sorts of unintended, and unwanted, consequences.

Biofuels Bonanza

Three stories around Cascadia mark the spread of biofuels: biomass for heating schools, biodiesel for heating homes, and a new cross-border biodiesel project for trucks.

Brush fires in the school
The AP recently reported on a Forest Service program, Fuels for Schools, that sends the slashed brush and limbs from forest thinning to heat schools in several states including Idaho and Montana. Replacing oil furnaces, biofuels reduce cost, air pollution, and dependence on foreign oil. I'm all for finding new uses for waste products. But is this really a good idea?

We keep hearing that decades of fire suppression have built up dangerous amounts of fire-prone underbrush in the region's forests. That's probably right. Still, it's not too implausible that thinning could get out of hand, leading to a different sort of ecological imbalance. Rampant thinning may also remove soil nutrients that forests needs to thrive.  And, as we've seen with Oregon's and Washington's school funding, using wood to heat schools could create perverse incentives to thin excessively in order to give schools cheaper heat.

Still, on a limited scale, Fuels for Schools' proven benefits likely outweigh the uncertain costs.

Biodiesel for your home
The Seattle PI reports that local biodiesel fans can now put "powered by biodiesel" bumper stickers on their homes. Two Seattle companies are offering 10 to 30 percent biodiesel heating oil. As expected, it doesn't save you money and hasn't been completely proven not to damage regular furnaces, but the companies say customers are very interested.

Cross-border biodiesel
A new cross-border biodiesel project called Bio-49 Degrees will replace some of the diesel in Puget Sound Energy and BC Hydro utility trucks with biodiesel from waste vegetable oil. Much of the biodiesel will be processed and distributed by students learning the trade at two technical colleges in Bellingham and Burnaby. The cross-border collaborative is another example of governments realizing that environmental issues follow bio-geographic, not political boundaries. Air quality in Bellingham, for instance, is affected more by Vancouver than by Seattle.

Gas: Still Cheaper than Roads, Insurance, and Parking

An interesting article from the Washington Post finds that taking Metro -- DC's light rail system -- into downtown may not save suburban commuters all that much money.  Even with gas at $3 per gallon, the savings on fuel, plus wear and tear on vehicles, are offset by increased spending on transit fares.  You really only start to save if you can use transit often enough that you can ditch one of your cars; otherwise, it's a bit of a wash.

It's a useful piece of analysis, as far as it goes -- though since DC's Metro tends to be more expensive than transit systems in the Northwest, the lessons may not be transferrable.  Still, the most important part of the analysis is what's left out:

• Parking:  The article doesn't look at downtown parking costs.  That's all well and good if you get "free" parking (that is, parking that someone else pays for).  If you don't, deciding not to drive downtown could save you a bundle:  if my experience with DC is any guide, parking is way, way more expensive than gas.
• Insurance:  The article counts car insurance as a fixed cost -- which is basically right. Under the current way we pay for insurance, reducing the amount you drive doesn't necessarily reduce what you pay for car insurance.  However, if you could pay for car insurance by the mile, rather than in an "all you can drive" plan, taking transit could also save insurance costs -- which are substantial.
• Congestion and Road Space:  Road space only seems free.  But if traffic is clogged, every car on the road delays every other driver backed up behind it.  Those delays have a real-world cost -- but the driver who's imposing them doesn't have to pay.  However, if drivers actually had to pay a toll to use the roads -- and if the tolls were high enough to keep traffic flowing -- then they'd save even more by taking the train instead of driving.

The big lesson for me here is that, as a society, we've arranged things so that very few of the costs of driving accrue by the mile.  We pay for insurance a couple of times a year, and rates are only partially adjusted to account for how far we drive.  We pay for "free" parking as lower wages, higher real estate costs, and higher prices for goods and services.  We make other people pay with their time for the congestion we create, rather than paying tolls to use the roads. 

All these decisions -- and they really are decisions -- to externalize the costs of driving have this concrete result: even in one of the most congested regions of the country, one with an effective and popular transit system, it can still make financial sense to drive rather than take the train.

Driving Reign

A few weeks ago, President Bush encouraged Americans to conserve fuel by cutting back on non-essential driving.  Unlike some, I think that it's actually helpful to use the bully pulpit this way.  I just don't think it's terribly meaningful: people respond far more to prices than to jawboning.  And as  Brookings Institution scholars Robert Puentes and Bruce Katz point out, the sprawling layout of American cities makes an awful lot of our driving "essential," for all practical purposes:

[W}hat the President doesn't get when he asks Americans to curtail their "non-essential travel" is that a half-century of government policies have fueled and subsidized the growth of sprawling, haphazard metropolitan communities and have dramatically increased the amount of "essential travel" required for people to live their daily lives. Driving may not be the best option, but it is often the only option for Americans to get around.

Americans venture out in their cars to find housing they can afford because housing opportunities closer-in are thwarted, while new developments on the suburban fringe are subsidized. Taking transit, biking, or walking to the corner market or to jobs located off the highway exit is neither safe nor feasible because of policies that segregate uses and cater to the car rather than the pedestrian. Federal and state policies make highways easy to build and relegate transit and other alternatives to second-class status.

These policies come with a huge hidden price tag for families, in the form of higher local taxes (to pay for needed infrastructure) and the ever-rising costs of buying, driving and maintaining cars.

Neil Pierce has similar thoughts in today's Seattle Times. 

It's a Gas Gas Gas

Wouldn't you know it -- as soon as the New York Times puts its editorials behind a subscription-only wall, they publish something worth reading:  semi-libertarian John Tierney waxing rhapsodic about gas taxes (sorry, the link is subscription only).

To summarize, Tierney argues for a 50 cent per gallon gas tax, with all receipts used to fund private Social Security accounts.  This, he says, would simultaneously reduce gas consumption, pollution, congestion, and all the other costs that drivers impose on the rest of society, all while enhancing retirement revenue.  And if gas taxes revenues are split evenly among all citizens, the poor (who drive little) will get far more out of the deal than they put in.

Now, I'll ignore his Social Security proposal -- which isn't a real proposal, just a sketch of an idea -- except to say that I'm skeptical, but (hopefully) open-minded.  But what's important to note here is this:  Tierney is calling for gas taxes to be used for something other than transportation.  And that seems like a really big deal to me.

Traditionally, gas taxes are earmarked for roads and highway spending:  the federal gas tax is devoted almost entirely to transportation projects.  Likewise, Washington state's gas tax receipts must be spent on highways.  It's in the state constitution, even. 

All of which means that gas taxes are mostly used to build new roads and "improve" old ones -- which encourages more driving.  That's good news for oil companies, auto manufacturers, and for people who really like to spend time in their cars; but obviously bad in lots of other ways.

Now, the thing is, gas taxes are fairly unique in this regard. Sales taxes aren't earmarked for programs to increase sales; income taxes aren't earmarked for programs to enhance income; so why are gas taxes, and gas taxes alone, treated as a dedicated funding source that can only be used to increase driving and, indirectly, gas consumption?  It doesn't make much sense -- and, obviously, it's a major reason that our society spends so much money on roads and transportation generally.

It doesn't have to be that way.  There's no reason that gas taxes can't be treated as just another general revenue source, just like sales and income taxes; or that they can't be earmarked for something other than transportation.  That, rather than his thoughts about Social Security, seems to be the important thing to take away from Tierney's article.

The Nature of Trend Watching

High gas prices may be grabbing headlines, but there's another trend worth watching: the Northwest's faltering ecosystems. Our (in)attention to ecosystem health is an example par excellence that we should measure what matters. All too often the converse is true: we let what matters be dictated by what we can measure.

Biological systems are enormously complex and are inherently dynamic. So precise up-to-the-minute trend data is usually not available. And because we can't measure and report on ecological conditions in a timely fashion that keeps pace with the demands of the 6 o'clock nightly news or the frenetic blogosphere, we often simply ignore the state of our ecosystems.

But for a change from fast news to slow news, consider today's news reports on the state of biological systems in the Northwest.

The Seattle Post-Intelligencer reports today that a joint study from the Center for Biological Diversity (CBD) and Friends of the San Juan Islands shows that 957 species in the Puget Sound area are at risk of extirpation. In addition to habitat loss, the principal agent of harm, the report fingers the usual suspects: "Pollution, climate change and invasions by non-native species..." (Read CBD's press release here.)

And in California, the San Francisco Chronicle reports that an attempt to expand the range of southern sea otters is now considered a failure. Members of the southern sub-species, now restricted in range to California, were unable to achieve viable population stability after being relocated to San Nicholas Island near Santa Barbara. Of the 140 otters transplanted there roughly 15 years ago, only 32 remain today.

In Oregon, the Eugene Register-Guard reports on the findings of a study by the Xerces Society for Invertebrate Conservation. Xerces demonstrates that forest insect outbreaks, an increasingly nasty problem for Northwest forests, cannot be addressed by logging or thinning the forests. In fact, cutting may actually make the problem worse. That's germane to the awful situation for forestry in British Columbia, where the mountain pine beetle is steadily wrecking havoc on the province's interior forests. A good piece on the economic implications for BC appeared recently in The Tyee.

None of these trends changes in a meaningful way on an hourly or daily basis. Each of them takes years to develop, the aggregate of many days of slow trends compounding, but their effects are far reaching. Will Puget Sound's biodiversity continue to diminish? Are the southern sea otters long for this world? Will the Northwest's forests--and forest economies--fall victim to a plague of insects?

The answers to these questions matter, but they are not easily quantifiable and they do not fluctuate often enough to warrant regular reporting. So we tend to lose sight of their significance and even the direction of the trends.

It's not that gas prices and economic trends don't matter--they certainly do--it's that our society's obsession with new data is blurring our vision. We see only the daily headlines, not the long term slow trends that may have a greater effect on the future for our children, our place, and even ourselves.

Oh, To Be In England

Here's something definitely worth watching: the UK is considering a massive pilot project to make drivers pay to use the roads.  And not just on a few selected highways -- the system would effectively turn every street and highway in Great Britain into a toll road. (Here's a link -- but the article is subscription only.  Sorry.) 

Tolls would vary based on the kind of road, the number of miles driven, and the time of day; it would cost more to use the most congested roads during rush hour, say, than an uncongested road in the middle of the night.  This sort of system -- sometimes called "value pricing" -- is a much better bargain than it seems at first blush.  It simultaneously cuts congestion, saves fuel, reduces accident risks, and, perhaps most importantly, relieves some of the pressure to build new roads -- an expense that only seems to grow more costly with time.

As a side benefit, this sort of system would make it far easier for insurance companies to offer Pay As You Drive car insurance.  That's a big benefit to people who don't drive much -- since they drive less, they'll pay less, and will stop subsidizing people who rack up both big mileage and big accident risks.

The basic technology underpinning value pricing isn't far-fetched at all -- in fact, mobile Global Positioning Systems are already available as an option for new cars, as well as in some rentals, and their cost will only go down over time.  The Puget Sound Regional Council has experimented for years with a small-scale value pricing scheme.  That said, there are still all sorts of potential technical kinks to be worked out before the system can be adopted more widely -- which makes a big UK pilot project all the more valuable.

Tax Shifting in the Blogosphere

Not so long ago, it seemed like gas at $2.33 per gallon cost an arm and a leg; now it seems like a bargain.  And not surprisingly, high prices at the pump have spawned a backlash against fuel taxes across the US -- and have added fuel, so to speak, to the campaign to repeal Washington's most recent gas tax hike.

As a general matter, I think that responding to high gas prices by rolling back taxes is misguided.  The specifics get murky, of course, since a lot of the money raised by gas taxes is slated for dubious highway projects--so a vote for higher gas taxes isn't always a vote to reduce gas consumption.  But in general, gas taxes are too low, not too high:  right now, they don't even pay for roads, let alone incorporate all of the other external costs (pollution, greenhouse gases, noise, collisions, congestion, etc.) caused by driving and burning fossil fuels.  A stiff & sustained gas tax would do a lot more to reduce gas consumption than all the preaching in the world.

Still, even though I tend to favor higher gas taxes, one thing is clear enough:  gas taxes are regressive.  Like high gas prices, they hurt the poor the most.  Which, if you care about fairness and equity in the tax system, is a bad thing.

The question is -- as a matter of policy, what do you do about that?

For years we've advocated tax shifting--that is, raising taxes on gas, but lowering other regressive taxes, such as the sales tax.  Depending on how you structure it, you could actually wind up reducing the total tax burden on the poor, while still creating across-the-board disincentives for gasoline consumption. 

It seemed like a completely reasonable idea when I first heard about it -- but I hadn't heard many other folks making the same argument.  So I was pleasantly surprised to see similar thinking starting to echo around the blogosphere:  see, for example, here and here, along with a reference to this pdf.   

Here's hoping that this is an idea that keeps echoing.

Elastic Fantastic?

Based on figures through August, per-capita gasoline consumption in British Columbia in 2005 has dropped to its lowest level since 1978, which is the earliest year for which records are available.  BC's gas consumption is on track to fall to 19.2 liters per person per week -- just a hair lower than in 1990 and 1991, but a significant landmark nonetheless.

Just as important, per capita gas consumption in the province seems to have fallen by about a tenth since its recent mini-peak, in 1998.  And it's down by about a third from its all-time peak in 1980.

In contrast, Washington residents use about 60 percent more gas, person for person, than do residents of BC.  Washington's current consumption is only down 17 percent from its all-time peak, and the fall from the most recent mini-peak, when gas prices were at a low point in 1999, has only been 6 percent.

What this suggests to me is that gasoline consumption may be a bit more elastic in BC than it is in Washington.  As this Slate article points out, gasoline consumption in the US is fairly inelastic:  people are fairly locked into their homes, cars, and jobs, and there's only so much driving that people can eliminate from their daily routines.  Only long-term shifts in where people live and work, and what they drive, can yield substantial reductions in gas consumption -- which probably means that gas prices will have to stay pretty high for a while until consumption falls appreciably.

But in BC -- especially in greater Vancouver, which comprises about half the province's population -- a growing share of the residents actually do have viable alternatives to the car.  Some folks who live downtown don't need a car at all; relatively compact urban design has placed stores and services in closer proximity to many people's homes; some people can walk or take public transport for some trips.  This all adds up to greater flexibility for at least some BC residents to adapt to higher gas prices -- and, as a happy coincidence, lower overall spending at the pump.

Light as a Feather; Stiff as a Board; Safe as an SUV?

Is a heavy SUV always safer than a light passenger car? Maybe not.

Recent research is challenging the long-standing belief that cars must be heavy to be safe. It turns out that the quality of the car may be just as important as the quantity of its bulk. Several studies show that design, safety features, and vehicle size (for crumple zones) can offset safety losses from reducing weight. And in addition to better fuel efficiency, lighter cars are also safer for other vehicles involved in an collision.

Carmakers have long argued that fuel economy standards compromise passenger safety because efficiency usually means lighter weights. And until recently government studies seemed to support the weight-safety tradeoff. But now it appears that other factors are as important as weight. There goes one more argument against improving vehicle fuel efficiency.

Is Gas Elastic?

In 1999 you could buy a gallon of gas in Washington state for less than a buck.  As recently as 3 years ago, gas prices averaged about  $1.20 a gallon.  Right now, though, expect to shell out about $2.85.

So what has a 136% price hike done to gasoline consumption?  As it turns out, not a lot.  In 2002, the average Washington resident went through about 8.4 gallons of gas per week.  Based on data through July 2005, that's now down to about 8.1 gallons per week -- a 4 percent reduction.

Elastic?  Not so much. 

Of course, the trends are a bit confusing. The state economy was in the doldrums in 2002, but has picked up a bit of steam since; if economic conditions had remained constant, the decline in gas consumption might have been a little steeper.

Over the longer term, the trends are a little more promising.  Person for person, gas consumption peaked in 1978, at 9.7 gallons per person per week.  We're down 17% from then.  (Which convinces me that federal CAFE standards--while far from perfect--really did accomplish something useful.)

Remember, though, these are per capita trends.  Population growth has worked at cross purposes to improved fuel efficiency:  all told, Washington state is on track to use the same total amount of gasoline this year as it did in 2002, and possibly a bit more.

Gas Mileage: (More) Truth in Advertising

We previously discussed problems with the way the EPA lets auto manufacturers measure the fuel efficiency of their vehicles.  What with all the hullabaloo, the EPA proposed to revise its testing methods by the end of the year so they more resemble the real world. According to the Boston Globe, the three core changes would be to:

• Alter testing to reflect today's more aggressive and high-speed driving habits, as well as address traffic-stifling congestion in cities and expanding suburbs.
• Account for vehicles driven in cold climates, where fuel economy suffers.
• Calculate the impact of accessories, such as air conditioners, that cut fuel economy.

While individual drivers still might find that their vehicles' gas mileage doesn't match up with official figures, because of differences in driving conditions and habits, the new EPA estimates would give them a better idea about actual annual fuel costs. Even better, since CAFE standards are based on these tests, more accurate tests would mean more accurate CAFE estimates, likely causing auto manufacturers to improve fuel efficiency all around.

Sic Transit

As big-time blogger Duncan Black noted over the weekend, high gasoline prices seem to have boosted ridership on some of the the nation's transit systems -- which led big-time blogger Matthew Yglesias to speculate that gas consumption may be more sensitive to price than economists have predicted.

Yglesias' take seems mistaken to me.  Nationwide, less than 5 percent of all commuting trips are taken on transit; and commutes represent a minority of all trips that people make, but a fairly large share of all transit trips taken.  So even if transit ridership were boosted by, say, 20% -- which is a huge spike indeed -- that might represent a decrease in vehicle trips of, oh, a half a percent or so at most.

In fact, it seems to me that any recent increases in transit ridership are pretty much in line with what economists would predict from recent gas price increases.  (See here, especially table 8, for a summary of economic predictions for the relationship between fuel prices and demand.) Of course, that doesn't necessarily undermine Yglesias' main point, which is that higher gas taxes would decrease fuel consumption. 

I've also got to second this part of Duncan Black's response to Yglesias:

[L]and use patterns in much of the country have made it quite difficult for any proposed transit systems to really improve the lot of most existing homeowners/commuters. Expanding rail systems into existing suburban areas really only makes...sense if its accompanied by some land use changes in those areas (there at least needs to be higher density development around the stations themselves).

As far as I can tell, this is just about right: transit is rarely cost-competitive in low-density, sprawling neighborhoods, since both riders and destinations are simply too spread out.  (Color me extremely skeptical about about supply-side theories of transit ridership.)  Which means that, since the shape of our cities changes much slower than gas prices, a lot of us may be stuck in our cars no matter what gas prices do in the short term.

SUV Watershed

There's more to this article than the headline, but the headline alone says quite a bit:  "Poll: 8 in 10 want drivers to drop SUVs."  That's another tentative -- though possibly shallow -- sign that high gas prices are turning Americans against their gas guzzlers.  Of course, since SUVs, trucks and minivans have commanded roughly half of the new vehicle market in recent years, one wonders if this means that 3 in 10 people want other drivers to drop their low-mileage vehicles.

Other poll responses are equally telling. Seven out of 10 respondents want to the government to fight rising gasoline bills by establishing price controls. Of course, holding down prices makes us consume more gas than we otherwise would, which in a world of limited petroleum supplies could lead to all sorts of other problems -- shortages, rationing, etc.  (As The Washington Post's Robert Samuelson reminds us, Cheap Gas Is a Bad Habit.)

Seven out of 10 also support new government spending on transit.  But almost six in 10 now think it's more important to explore for new sources of energy than to protect the environment; and five in 10 favor opening up the Arctic National Wildlife Refuge to oil and gas development, up from just 42 percent earlier in the year.

The obvious result of a poll like this is that consumers are just screaming for something -- anything -- that might bring gas prices down.  And mostly they're looking for solutions that involve government subsidies -- for energy companies, transit, and gas consumers themselves -- or for sacrifice by someone else. That's not surprising. 

But what's all-too-clear from polls like this is that solutions that could really ramp up fuel efficiency and curtail consumption over the long term -- think feebates, or fighting sprawl, or paying for car insurance by the mile -- really aren't on the political landscape.  And that's probably because politicians (and pollsters) simply don't talk about them.  Which seems odd.  After all, they're no more infeasible than, say, expecting the powers-that-be to cut into oil industry profits by capping the price of gasoline.

Energy News That's Fit to Print

The New York Times has a bonanza of energy related stories today.  First, there's this feature story on "peak oil" -- the notion that the world's oil producers are very close to the point at which they no longer can increase production, after which worldwide crude oil output will inexorably sink.  This idea has gained currency and adherents over the past several years as oil prices have risen -- though there are plenty of detractors who say that we're nowhere close to a global production peak.  There's nothing new in the article, but it's a good summary of the debate for those who haven't been following it.

Next stop, this news that the recent gasoline price spikes have suppressed gasoline sales for the second consecutive week:

All told, Americans used an estimated 8.63 million barrels of gasoline a day in the week that ended Sept. 9, down 4.3 percent from the week before and 6.5 percent less than the comparable week in 2004, according to the Energy Information Administration.

It's not clear if this decline is because consumers are buying less gas, or if it's because retailers are drawing down their existing stocks, waiting for prices to fall a bit before replenishing them. But at least one oil economics firm has reported steep drops in retail gasoline sales over the past week -- a sign that higher prices may actually be changing consumer behavior, at least somewhat.

(As a side note -- the general consensus seems to be that over the short term, a 10 percent increase in gas prices leads to a 1-2 percent decrease in per-capita consumption.  So if average gas prices rise from $3 to $3.30 over the next year, we'd still see a negligible decline in total consumption --  perhaps not even enough to offset population growth.  If high prices are maintained over the long term, though, people will reduce their consumption quite a bit more. But I digress.)

Third, there's this story about declines in overall retail sales -- led by a drop-off in new car sales in August, after a torrid July.  But the interesting thing to me is that higher spending on gas helped bump up spending a bit -- which means that, for those who think of high levels of consumer spending as a harbinger of a strong economy, high energy prices may actually be giving the nation a boost.  Yet another example of how standard economic indicators should be taken with an appropriately-sized grain of salt.

And finally, there's this story:  "Toyota Says It Plans Eventually to Offer an All-Hybrid Fleet."  Apparently, the automaker thinks that by ramping up production it can cut the cost premium for hybrids -- making them that much more competitive with conventional cars and trucks.

Interesting times, indeed.

Gas Mileage: Consumer Retorts

As Jessica mentioned last week, Consumer Reports recently claimed that EPA's vehicle ratings routinely overstate how fuel-efficient cars and trucks are in real-world driving.  For standard cars and trucks, the magazine says, EPA's ratings overstate real-world fuel economy by 30 percent.  But for small hybrids, such as the Toyota Prius, they claim that EPA overstates actual miles-per-gallon by a hefty 42 percent.  (Ouch.)

Now, I believe that there's reason to question Consumer Reports' figures.  Of course, I have read a number of reports that the Toyota Prius doesn't actually get the EPA-rated 55 mpg in combined city/highway driving (though some people -- particularly those who've optimized their hybrid-driving habits -- get pretty close, and