Peak car

Today’s Fin (paywalled unfortunately) includes the neat neologism “Peak Car” from transport consultant John Cox, making the point that car travel in developed countries is unlikely to increase further. I’ve tended to disagree with Cox in the past: for example, with this 2006 piece, which stated that public transport is in terminal decline. This was just at the beginning of the recent resurgence in public transport use, particularly noticeable in Brisbane. Still he’s right about the peak, or more precisely plateau in car travel, matching what’s happening to oils supplies. I’d take it further and say that the inevitable (given no growth in supplies and increased demand from China and India) decline has probably already begun.

Calculated Risk points to this report from the US Dept of Transportation, showing the first yearly decline in several decades, and includes a graph which shows that the recent decline follows several years of flattening
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47 thoughts on “Peak car

  1. There are also technical issues with the reticulated gas supply when demand increases significantly. The WA government program to convert the metropolitan bus fleet to CNG ran into some teething problems when the reticulated supply was unable to deliver gas at a sufficient rate for the refuelling schedule. The supply pipes needed to be upgraded and additional storage installed.

    If home-fuelled CNG vehicles became popular, that problem would reappear on a much larger scale. It might require a complete overhaul of the gas delivery system.

    Home users might find compressors affordable, but they’d probably balk at having significant CNG storage facilities at home. As would the dangerous goods regulators.

  2. Home users might find compressors affordable, but they’d probably balk at having significant CNG storage facilities at home. As would the dangerous goods regulators.

    Out in rural areas where you can’t get “town gas”, bottled LPG is fairly ubiquitous for heating purposes, and doesn’t seem to represent any greater danger than piped natural gas.

    I’d also point out that a large number of households have an even more dangerous explosive stored in large quantities in a much less safe container known as a “jerry can”… 🙂

  3. Carbonsink, there’s no fuel excise on natural gas at all

    I’m pretty sure CNG one of the fuels that will have excise phased in to 2011, I know LPG will soon have excise.

    Regardless, the government would need to sort out the taxation and pricing issues before a major transition to CNG.

    Even so, at US prices for natural gas and throwing in the full excise, GST, and energy conversion factors, natural gas costs roughly the equivalent of 80 cents per litre.

    CO2 emissions per km are very low also. A big price advantage for CNG (at least in the short term) would be a good thing and should speed the transition.

    We should be hearing something from Marn about this soon. Isn’t he supposed to be working on some kind of energy security plan for Australia? God help us if he recommends CTL.

  4. Fair enough about the LNG tanks Robert, although I suspect daily driving habits might require somewhat more substantial storage.

    I don’t actually hate CNG, just engaging in some devil’s advocacy…

  5. To return to “Peak Car”, is it possible that the US has simply reached saturation in terms of car ownership and usage?

    There’s been a tendency to assume demand for cars and for roads was almost completely inelastic – increase the supply as much as you want and there will still be consumers crying out for more.

    But with total population growth slowing, is it possible the US has simply reached the point where virtually everyone who wants a car has one?

  6. The usual situation with a contracting economy is that money is tight, growth slows, jobs are lost, people go broke and everybody gets cranky.

    There are problems with compressed energy, near me a winery blew up when a spark ignited the alcohol vapours.

    Gas bottles are normally OK if there is a solid connection; if they use a flexible rubber type hose leakage can occur which can lead to an explosion (vapours never just burn they explode.)

    Petrol in a tin does not explode however vapours are heavier than air and can be triggered by a spark – a common occurence in petrol powered cruisers when somebody turns the key to start the motor.

    Of course the devil is in the details; if the connection is not made properly leakage can occur. Most people dont know that gas thread is a reverse thread – most bottle suppliers change over and reconnect the bottles themselves – its when others start fiddling that trouble occurs.

    Usually suburban houses have a “fire wall” between the garage and living areas so if a fire did start you have time to get out. Once the fire is in the roof its all over red rover and the fire brigade just hose the ashes.

  7. rog Says:

    No SJ, prices did not reduce consumption it was the contracting economy that did so.

    wilful Says:

    This is surely a testable statement, SJ and rog are arguing two separate causes for the reduced consumption following the oil shocks: a ‘contracting economy’ versus ‘prices’. Which was it? Was it both? Anyone?

    Calculated Risk’s follow up post has another graph that clearly shows that rog is wrong.

    A larger version of the graph is here.

    The gray vertical bars mark recessions, i.e., periods of economic contraction. The drops in miles driven preceed the recessions, not the other way around.

  8. This EERE Chart shows use of oil in transportation.

    I’d guess about half of that is for automobile passenger transport, as the “light truck” category includes:
    – pickup trucks used for business
    – pickup trucks used for both business & passengers
    – (misnomered) SUVs

    Prices at the pump are obvious, but there’s an amplification effect:

    – I’d assume that the different categories have different elasticities in short and long terms [can anyone point to a good paper on elasticity differences by category?]

    I.e., individual consumers may still have to drive to work, but will combine trips, carpool, lessen vacation distances, etc … and buy a more efficient car the next time.

    But there are many short-term fuel uses that seem totally inelastic [farm machinery, railroads, some trucking] where people end up increasing rates, adding fuel surcharges, etc [or $15/bag for American Airlines] and can pass their costs along.

    Hence, if there is a big spike in gas price, that is highly visible to consumers, but there is some lag time as other indirect price increases start to hit. One would then expect that to put even further pressure on consumer gas usage.

    Can anyone point to good studies that model tahe costs that people pay, not at the pump, but indirectly this way?

  9. Historically higher oil prices precede a recession. The cost and availability of energy will be critical to an expanding global economy.

  10. That EERE chart is interesting – industry appears to be a more efficient user of oil than ‘recreational’

  11. At what prices does coal-to-oil look profitable? At some point it will. A little bit of value adding could soon make sense to Australia’s coal industry – of course it’s just as climate policy says we should cut back. Insatiable demand for liquid hydrocarbons, a bit of demand for climate change mitigation – not hard to predict how it will go. Oil-to-coal isn’t going to be anything like as profitable as any remaining easy oil but what else is?

  12. Ken

    I don’t know the answer on the economics of coal to oil but in terms of energy efficiency and greenhouse emissions, it is a disastrously bad process. We must avoid going down that road. There is also a consdierable investment and time penalty (new refining plants required – it is a completely different process to convefntional oil refining.) LNG and public transport investment is far preferable. Either way, lag times mean we must act fairly soon.

  13. As I understand it, if current prices – or even some relatively substantial fraction of them – are maintained, CTL is an immensely profitable business. However, the greenhouse issue is the real problem.

    The process CO2 from coal-to-liquid is in a form where it’s relatively easy to purify for storage, so if geosequestration is ever going to work, it’ll work for CTL.

    However, the uncertainties around the carbon price, and whether geosequestration is feasible, are a big dampener on investing in CTL.

    The other problem is that I don’t think that people with billions of dollars to invest are convinced that oil prices will stay high enough to justify the investment. They think that a combination of new production from offshore wells, tar sands, natural-gas-to-liquid (easier, cheaper, and less environmentally damaging) – not to mention conservation – will drop the oil price back – maybe not to $25 per barrel, but something much lower than it is now.

    But there are clearly some who do think CTL is a goer; a company called Linc Energy is building a pilot CTL plant and their share price has gone gangbusters recently. So at least some investors are betting on CTL. Whether they’re smart players or mugs remains to be seen…

  14. I don’t see any real will to cut back on coal, certainly not in Australia. No “serious” politician can suggest it and not be howled down as anti-prosperity. Carbon taxes or equivalents are of course something to do sometime in the future. It’s going to take some serious changes in mindsets to see Carbon taxes introduced here in anything but the most minimal (ie not effecting coal use and exports) way. Since (as any ice manufacturer and dealer will attest) negative consequences of something willingly purchased are wholly the responsibility of the end users, it’s not our worry. Anyway, China’s emissions are much more than ours so it’s their problem, and we can feel fully justified in not doing anything much about GHG emissions at home, which will be more comfortable with a gov’t flush with coal gigadollars. Throw a minute fraction of those mining royalties at CCS research, expand coal mining and exports on the assumption it will work. Hell, just expand coal mining and exports because it’s worth lots of money. Deny global warming has a real basis, definitely avoid getting educated on the issue and when it gets to court battles you can honestly say you had no real knowledge of any negative consequences.

  15. There was an equally well argued piece from Ken Davidson in The Age today arguing that we must invest in public transport instead:
    http://www.theage.com.au/opinion/fuel-price-debate-ignores-real-issue-20080528-2j2h.html

    In a sense both pieces can be right. Infratructure spending in Australia in the 1990s was low, hence in a catch up phase there is a need to increase spending on both roads and rail. Assuming that politicians don’t provide enough funds though, there is a pressing need to increase PT’s share of funding. Hence overall I prefer Davidson’s view.

  16. I suugested earlier that the US may actually have hit saturation in terms of demand for cars.

    If that is the case, and I have no way of proving whether or not it is, then additional road-building might actually reduce congestion and improve fuel efficiency. As opposed to the usual scenario where it typically just meets previously unsatisfied demand and stimulates more car use meaning we rapidly end up right back where we started.

  17. Re: additional road-building

    In some places, it is very difficult or very, very expensive to build much in the way of new roads.

    1) One is reminded of the Big Dig in Boston.

    2) Manhattan?

    3)San Francisco? (or much of the Bay Area)? Byt the way, one of the main routes from San Jose to San Francisco is Rt101. As can be seen SF Bay Area +1m flood map, +1meter laps at Rt 101 (and other major roads) if undiked. of course we’ll build dikes, but does somebody think it’s a good long-term investmentfo example, to build a second level freeway atop Rt 101, at large expense?

    There are places where modest road improvements can be useful, like better intersections, but the current action around here is trying to direct the development as infill development along rail and light-rail lines.

    A much, much better idea is to rethink the incredible implicit subsidies for cars, i.e., read UCLA Prof Don Shoup’s excellent book “The High Cost of Free Parking” about all the perverse incentives. The idea is not to do away with cars, but to manage them in ways that still preserve their convenience, but encourage more beneficial long-term behaviors.

    One approach is the use of street sensors, wireless sensor networks, and smart meters to better manage parking space inventory, do dynamic pricing (in effect by value), get people not to cruise around looking for spots, help people find spots, etc [depending on the city.] San Francisco has been working on such for a few years, with Streetline Networks. {Disclosure: I’m an advisor there.]

    This is an example of the use of Moore’s Law, cheap electronics, sensors, and information systems to better energy. This category of efficiency improvement is no silver bullet, but one of the useful little silver buckshot.

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