ONE TOWN SQUARE: at the intersection of peak oil, climate change, and land use

VMT, gasoline demand continue to fall in U.S., Oregon no exception

January 20th, 2012 by Jim Just

The Federal Highway Administration’s Traffic Volume Trends reports travel on U.S. roads and streets was down 0.9% for November 2011 as compared with November 2010. Cumulative travel for 2011 was down 1.4% from 2010 through November.

In the early ’80s, VMT (moving 12 months total) stayed below the previous peak for 39 months. Currently VMT (moving 12 months total) has been below the previous peak for 48 months – a full 4 years – and the trend shows no sign of reversing any time soon.

Could it be that the all-time peak in vehicle miles traveled (VMT) in the U.S. – August 2007 – is now securely behind us?

In Oregon, vehicle miles traveled (VMT) was down 0.4% in November 2011 compared to November 2010. Cumulative VMT for 2011 is down 2.0% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

With VMT down, it’s not surprising that Americans continue to consume less gasoline. Total petroleum deliveries fell 1.1% in November compared with November a year ago, pulled down by a 1.8 percent decline in motor gasoline demand.  It was the lowest level of November consumption for gasoline since 2000.

Total petroleum deliveries fell 1.2% to an average of 18.9 million barrels a day in 2011 compared with 2010. Except for 2008, this was the largest drop in annual domestic deliveries over the past decade.

If petroleum deliveries are any indicator, VMT will prove to continue to drop in December 2011 – and substantially. December 2011 petroleum deliveries were down 5.9% from December 2010, declining to an average of 18.6 million barrels per day, the lowest level in 15 years. The Federal Highway Administration’s report for December can be expected confirm that VMT for 2011 as a whole is down over 2010.

Global auto sales forecasts powered by fantasy

January 4th, 2012 by Jim Just

Oil prices in 2011 averaged record highs, despite global economic woes.

Brent crude, the world oil benchmark, averaged $111 per barrel, breaking the previous record of an annual average high of $100, set in 2008. That spike contributed to a huge global recession. West Texas Intermediate (WTI) rose even more, averaging $95/barrel, an increase by 20% over its 2010 average price of $79. WTI traded at a hefty discount to world oil prices throughout the year – as much as $26/ barrel.

Global automotive market intelligence firm Polk forecasts worldwide new vehicle sales in 2012 will rise 6.7% over 2011 volumes to 77.7 million vehicles. Polk expects China to make the largest contribution to global sales growth for new vehicles, with an anticipated 16% increase over 2011.

Polk expects that U.S. light vehicle sales will increase by 7.3% to 13.7 million vehicles. As this chart by Calculated Risk shows, sales are struggling to return to levels reached almost two decades ago, when the U.S. population was ~50 million less than today.

Polk is optimistically forecasting U.S. auto sales to return to “normal” levels of greater than 16 million vehicles per year by 2015 – and for global auto sales to approach 100 million by 2016.

Where is the gasoline to power all these new cars going to come from? Despite record high global oil prices, global oil production is refusing to budge. Members of the Organization of the Petroleum Exporting Countries (OPEC) – which supply ~42% of global production – produced an average of 30.74 million barrels per day in December 2011OPEC production has been fluctuating within a ~5% band, as has global production.

Production of crude plus condensate has been basically flat since 2005, with new sources just barely managing to compensate for a 5% decline per year from existing production. Any increase in total liquids over that time has largely come from increases in NGPLs and other liquids.

Total liquids production worldwide increased 0.5% per year from 2005 to 2010 – but that includes low net energy fuels such as biofuels. However, the global supply of net oil exports available to importers other than China and India (what Jeffrey Brown calls Available Net Exports, or ANE) fell at a rate of 2.8% per year from 2005 to 2010. Brown expects oil available for import by most of the world to fall by 5% – 8% each year for the rest of the decade.

In Saudi Arabia (now the world’s second largest oil producer after Russia), production has been decliningOnly a dozen or so of the 54 oil producing nations in the world are still increasing their oil production.

If global economic growth, feeble though it may be, manages to continue in 2012, we can expect even higher oil prices. Even if people are willing and able to pay higher prices, there are limits to global supplies of oil that can be refined into motor fuels. What good will all these new cars be, if there is not enough fuel to power them?

It’s a good bet that rosy forecasts for U.S. and global auto sales will prove to be powered by nothing more than fantasy.

VMT, gasoline consumption in U.S. continue to fall

December 25th, 2011 by Jim Just

The Federal Highway Administration’s Traffic Volume Trends reports travel on all roads and streets was down 2.3% for October 2011 as compared with October 2010. Cumulative travel for 2011 is down 1.4% from 2010.

In the early ’80s, VMT (rolling 12 months) stayed below the previous peak for 39 months. Currently VMT has been below the previous peak for 47 months – almost 4 years. And the trend in the rolling 12 months VMT is still down.

Could it be that the all-time peak in vehicle miles traveled (VMT) in the U.S. – August 2007 – is now in our rear-view mirror?

In Oregon, vehicle miles traveled (VMT) was down 2.7% in October 2011 compared to October 2010. Cumulative VMT is down 2.1% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

With VMT down, it’s not surprising that Americans continue to consume less gasoline. Total petroleum deliveries (a measure of demand) fell 1.1% in November compared with November a year ago, pulled down by a 1.8 percent decline in motor gasoline demand.  It was the lowest level of November consumption for gasoline since 2000.

Days of cheap gas are gone for good

December 21st, 2011 by Jim Just

AP reports the typical American household will have spent a record $4,155 on automobile fuel this year – 8.4% of what the median family takes in, the highest share since 1981.

Don’t expect 2012 to be any better. More likely, fuel will be getting even more expensive.

Brent crude will average near $111/barrel for 2011, even more than in 2008 when oil prices hit a peak of $147.50/barrel. Some analysts think oil prices will average a bit less in 2012, perhaps averaging $105/barrel. Others analysts predict that oil prices will be even higher than in 2011, projecting WTI (which have consistently been significantly lower than Brent this year) to average $100 per barrel next year, eclipsing 2011?s average of about $95/barrel. Oil-price.net projects WTI prices to be at $112 a year from now.

Nobody is expecting oil prices to drop, or at least not much. Here’s a big reason why: Saudi Arabia, the world’s lowest-cost producer, requires a price of $91/barrel just to break even.

The glory days of cheap gas are over for good. Our memories aren’t playing tricks: remember gas wars, gas at 19.9 cents a gallon? In my Fiat 850 Spyder – $2000 new, right off the lot, and 50 mpg – driving seemed virtually free. We were young and immortal, oil was infinite, and the world was empty and ours for the taking. There were no bounds, no limits. Vietnam and then the first gas crisis in 1973 were the first intimations that the imperial project – to stride over not just the nations of the world, but over Nature herself – was destined to go awry.

A few were prescient. Limits to Growth was published in 1972, foreseeing humanity bumping up against constraints to both sources and sinks by the first decades of this century. Way back in ’56, Shell geologist M. King Hubbard predicted that U.S. oil production would peak in 1970 – a prediction that proved spot on.

Porter Stansbury at The Daily Reckoning posts this chart showing “real wealth” per capita in the U.S. since the mid-’50s.

Note that “real wealth” in the U.S. peaked about the same time as U.S. oil production. Coincidence?

Stansbury measures “real wealth” using a standard commodity index (the CRB) up to 1975 and gold post-1975 (when gold began to trade freely). When peak oil arrived in the U.S., Nixon took the U.S. off the gold standard. With the U.S. kissy-face with the Saudis, the dollar became the petrodollar.

I’m not sure I would put a lot of faith into this measure of “real wealth” – but the correlation of peak wealth with peak oil is provocative. There’s no question that the U.S., indeed the entirety of Earth, has become a poorer, more degraded home for humans since 1970, despite decades of “growth” and “progress”. That degradation doesn’t even begin to show up in our accounts.

Around 1970, reality arose and smacked us across the face.  Humanity has been working through the range of responses – denial, anger, bargaining, depression, not yet acceptance – ever since.

VMT in U.S., Oregon: down, down, down

November 21st, 2011 by Jim Just

The Federal Highway Administration reports travel on all roads and streets was down 1.5% for September 2011 as compared with September 2010. Cumulative travel for 2011 is down 1.3% from 2010.

Bill McBride at Calculated Risk has this chart showing VMT back to 1971.

McBride observes the current downward trend in VMT is unprecedented:

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 46 months – so this is a new record for longest period below the previous peak – and still counting!

September VMT was below last year’s numbers for the seventh straight month.

In Oregon, vehicle miles traveled (VMT) was down 0.7% in September 2011 compared to September 2010. Cumulative VMT is now down 2.0% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

Indications are VMT in the U.S. continued to fall in October and November. Platts reports U.S. retail gasoline demand fell 4.5% year-on-year for the week ending November 18; the four-week rolling average was down 3.8% from the same period last year. The average retail price of a gallon of regular gasoline was 18.1% higher than last year.

Falling VMT in the U.S. should not be a surprise. Driving is dependent upon the availability liquid fuels. Jean Laherrère reports global all liquids production has been on a bumpy plateau since 2005 around 87 Mb/d, with a variation of 2 Mb/d (which is equal to the accuracy of the data, about the difference between EIA, IEA or OPEC values). He has posted an updated graph of historic and projected production at The Oil Drum.

Laherrère expects this plateau to continue for a few years before a significant decline takes place. But recall, peak oil is not synchronous: the peak in oil consumption arrives earlier in some countries than in others. In the U.S., the peak oil consumption is clearly in our rear view mirror. That peak oil is manifested in declining VMT should be expected.

Has U.S. seen peak travel?

November 4th, 2011 by Jim Just

Auto sales came in at an annual rate of 13.26 million in October – slightly below forecasts of 3.4 million. Calculated Risk posts this chart.

Automakers are now on pace to sell about 12.8 million vehicles for in 2011, up from 11.6 million last year.

Light vehicle sales are still poking along at levels typical of three, four, even five decades ago, and last seen two decades ago, as apparent in this chart, again from Calculated Risk.

In 1991, the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

Auto sales have been on a downward trend for a decade now. Oil consumption in the U.S. has been on a downward trend since 2005.

The above graph, posted by Stuart Staniford at Early Warning, shows the EIA’s data since 2000 – both the weekly and the monthly series.  According to Staniford, the monthly series is believed to be more accurate, but the weekly series is more up to date. The weekly data is certainly noisier.

The downward trend in auto sales and oil consumption is consistent with the continuing downward trend in vehicle miles traveled (VMT). VMT in the U.S. reached a peak in January 2008 and has been trending downward now for almost four years.

Trend in VMT still down in U.S., Oregon

October 26th, 2011 by Jim Just

The Federal Highway Administration reports travel on U.S. roads and streets was down 1.7% for August 2011 as compared with August 2010. Cumulative travel for 2011 was down 1.3% from 2010.

Bill McBride at Calculated Risk posts this chart.

McBride observes the downward trend in VMT is unprecedented:

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 45 months – so this is a new record for longest period below the previous peak – and still counting!

In Oregon, vehicle miles traveled (VMT) was down 1.0% in August from August 2010. Cumulative VMT is now down 2.2% from 2010.

There are some indications that travel may have picked up a bit in September. After falling a revised 0.5% in August 2011, the American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.6% in September.

However, the long-term trend in truck tonnage remains down from peak 2005 levels.

Also, the American Petroleum Institute reports total petroleum deliveries (a measure of demand) totaled 19.9 million bpd, an increase of 2.5% in September over September 2010.  While motor gasoline demand was up only slightly by 0.3%, distillate demand reached a record for the month.  On a year-to-date basis, gasoline demand was down 1.3% from 2010.

Plateau in global oil production means declining travel on U.S., Oregon roads

October 6th, 2011 by Jim Just

Shell CEO Peter Voser is warning that over time oil supply and demand fundamentals are going to tighten significantly:

Oil output from fields in production declines by 5 per cent a year as reserves are depleted, so the world needed to add the equivalent of four Saudi Arabias or 10 North Seas over the next 10 years just to keep supply level, even before much of an increase in demand.

So how have we been doing at discovering new reserves? Not nearly good enough.

All the easy stuff has been found. We basically stopped finding conventional super-giant high production rate oil fields forty years ago.

Despite the best technology and soaring prices, each year the amount of new oil reserves discovered is a fraction of that found in the 1960s. Oil production flattened in 2004. In 2010 consumption exceeded production by over 5m barrels per day for the first year ever.

In the charts above, a large part of the difference between consumption and production is accounted for by such things as biofuels, oil made from coal and other non-conventional sources, which are not included in the production figures. The rest of the difference is from the running down of world oil stocks.

The questions now facing us are how long can global oil production be held on its plateau, and how fast will the subsequent decline be?

The stall in global oil production in the face of strong demand from less developed countries is having a profound consequence: while the Chindia  (China & India) region, and many other developing countries, have been able to increase their net oil imports, most developed oil importing countries, such as the U.S., are being forced, via price rationing, to take a declining share of a falling volume of Global Net Exports.

In the U.S., oil consumption has fallen by 10% since peaking in 2005. Less oil consumption translates into fewer car sales . . .

. . . and less driving.

Vehicle miles traveled (VMT) in the U.S. plateaued in 2005 and have been trending down ever since.

Oregon is no exception to the national trend. Vehicle registrations in Oregon peaked in 2007 . . .

. . .  and were down to 3.23 million in 2010.

Gasoline consumption in Oregon and Washington has been on a plateau since 1999.

Sightline reports VMT in Oregon and Washington have been on a gently declining plateau since 2002.

The trend should now be clear, in Oregon as well as the nation as a whole. The times of ever-growing traffic on our roads are over for good. Instead, our future holds declining fuel consumption, declining number of cars and trucks, and declining vehicle miles traveled.

It’s time to start planning for that, rather than for continued growth.

U.S. roads seeing unprecedented slide in car, truck traffic

September 28th, 2011 by Jim Just

The Federal Highway Administration reports travel on all U.S. roads and streets was down 2.5% for July 2011 compared to July 2010. Cumulative travel for 2011 is down 1.2%.

Bill McBride at Calculated Risk observes the downward trend in VMT is unprecedented.

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 44 months – so this is a new record for longest period below the previous peak – and still counting!

Gas prices are down from highs reached in spring this year, but are still significantly higher than a year ago – as seen in this chart made available by GasBuddy.


Crude oil prices have declined from highs reached earlier this year, but are still high enough to stifle economic growth (Bloomberg: as of 99/27/2011, WTI was trading at $84.45, Brent at $108.95). Gasoline prices appear to have room to decline, too. Crude oil accounts for about 55% of the price of gasoline. The chart shows WTI prices; however, gasoline prices in the U.S. are impacted more by Brent prices. While WTI briefly exceeded $112/barrel in AprilBrent briefly broke above $127/barrel. WTI has become disconnected from global markets and the WTI/Brent spread has exploded, as seen in this chart from Bloomberg.

The American Trucking Association reports truck tonnage is down, too.

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index declined 0.2% in August after falling a revised 0.8% in July 2011. July’s decrease was less than the 1.3% ATA reported on August 23, 2011.  The latest drop put the SA index at 114.4 (2000=100) in August, down from the July level of 114.6.

This chart posted at Calculated Risk shows that freight tonnage has been on a downtrend since peaking in early 2005.

ATA Chief Economist Bob Costello observes while freight tonnage is down, carriers handling as much freight as they can – because trucking industry capacity has fallen.

“In part, this is due to less industry supply.  The number of trucks operated by the truckload industry is still down about 12% from the height in late 2006, yet tonnage levels are about the same as in late 2006. Additionally, most carriers are finding it very difficult to hire new truck drivers, which mean they can’t add too many trucks.”

VMT in Oregon was down 2.1% in July 2011 from July 2010, and is now down 2.4% for the year.

What if the recent down trend in vehicle miles traveled is not a fluke, but rather the manifestation of a new reality brought about by peak oil and its resultant economic impacts? Oregon’s planning assumes continued growth. Travel demand forecasting is driven by population and employment forecasts, assuming a positive correlation (if not a causal relationship) between population and employment growth and growth in travel demand. If that assumption is no longer valid, we will be wasting billions of precious dollars on unneeded highway white elephants, such as the Columbia River Crossing (or, in Evan Manvel’s words, the extremely risky and costly CRC highway mega-project).

Oil prices remain high as global oil production reaches new highs

September 15th, 2011 by Jim Just

Global oil (all liquids) production appears to have exceeded levels reached in July 2008 and reached a new all-time high in 2011, according to both OPEC and the IEA.  This chart is posted at Early Warning.

Despite record production and faltering western economies, oil prices remain stubbornly high. The global benchmark Brent crude is trading above $112 today (September 15); and WTI, which has seemingly become disconnected from global markets, is trading above $89. Again, Early Warning posts a revealing chart.

The IEA blames high crude prices on “fundamental market tightness”, reporting demand has been outpacing supply since the middle of 2010, leading to a depletion of stocks. Despite the drops in demand in western countries, global consumption continues to outpace supply.

Tom Whipple at the Falls Church News-Press observes we are seeing  “a three way race among OECD demand, which is large but falling by roughly 3-4 percent from last year; the non-OECD world where demand is rising at a rate of about 4 percent over last year; and global production which for now is rising slowly[.]”

If demand growth continues at its present or even somewhat reduced pace, demand should be pushing up against 92 million b/d by the end of next year. The world will soon see whether it’s possible to push global production to that level.

Regardless, the economic consequences of pushing up against the limits of global oil production are not going to be pretty, as we are already seeing. Ronald White at the L.A. Times reports U.S. motorists are on pace to spend $491 billion for gasoline this year, the most ever. Drivers have shelled out more for fuel this year than in 2008 because prices rose faster this time and have stayed high longer. The 2008 average U.S. price was about $3.25 a gallon. This year, the average price has been about $3.66 a gallon. Fuel prices have remained high despite weak demand: Energy Department statistics show that gasoline demand in the U.S. is running 157,000 barrels a day below 2010 levels.

High fuel prices are resulting in less driving. In 2011, cumulative travel on U.S. roads is down from 2010. Truck traffic – an indicator of economic activity -  is down, too. Truck traffic never recovered from the recessionary levels of 2008, as seen in this chart showing real-time diesel fuel consumption, posted at Calculated Risk.

In the U.S., people are not only driving less – they’re buying fewer cars. When the 2008 recession hit, sales of new cars crashed as people hung on to their old cars in an unprecedented fashion.

The fleet turnover rate remains at historically high levels, while new car sales remain in the doldrums.

Goldman Sachs is forecasting Brent crude oil to reach $120 a barrel by the end of 2011, $130 in 12 months, and $140 by the end of 2012. If oil prices continue to rise, hopes for any economic recovery are doomed to disappointment, regardless of any stimulus, regulatory relaxation, or unleashing of the so-called “job creators”.

Tom Bowerman recently sent me this chart showing that real gas prices are now back where they were at the beginning of the oil age.

Cheap oil made the oil age possible. It’s looking like high gas prices will prove to be the bookends of the oil age.

U.S. car sales: back to the ’60s

September 8th, 2011 by Jim Just

Light vehicle sales were at a 12.12 million SAAR in August, up 5.3% from August 2010 and down <1% from the July 2011 sales rate of 12.2 million.

The above chart, posted by Bill McBride at Calculated Risk, shows car sales poking along at levels typical of three, four, even five decades ago, and last seen two decades ago. In 1991, the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

Globally, 35 million new vehicles were registered last year. So even with the collapse in U.S. auto sales, the U.S. still accounts for over a third of the global market. And with 240,000,000 light vehicles on the road, the U.S. maintains almost one-quarter of the global light vehicle fleet. Tom Whipple at the Falls Church News-Press points out that in the U.S there is now a motor vehicle for every 1.3 people and at least one for every licensed driver. But in an era of little or no economic growth, limited employment opportunities and rising energy costs, it is highly unlikely that there will be anything approaching 240 million registered vehicles in the U.S. 25 years from now.

Last month, Wards Auto published a story pointing out that the world’s motor vehicle count for the first time exceeded one billion – which explains why global oil prices remain extraordinarily high even while economies continue to struggle. Brent crude is trading at almost $116/barrel ($115.80 as of 9/7/2011), and is trading at a near record premium of $25.70 to WTI crude at ~$90/barrel ($90.10 as of 9/7/2011).

VTM in U.S., Oregon down; global vehicle registrations top one billion

August 26th, 2011 by Jim Just

The Federal Highway Administration reports travel on all roads and streets was down 1.4% for June 2011 as compared with June 2010. Cumulative Travel for 2011 was down 1.1%.

Bill McBride at Calculated Risk observes the dip in U.S. vehicle miles traveled (VMT) is unprecedented:

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months. Currently miles driven has been below the previous peak for 43 months – so this is a new record for longest period below the previous peak – and still counting!

VMT in Oregon was off 1.4% from June 2010, and is now off 2.3% for the year. The drop in driving is continuing into August: the New York Times reports the four-week moving average in gasoline consumption is down 3.8 percent from last year.

While light vehicle sales in the U.S. almost surely have seen their peak, and VMT may have seen its peak, that’s not true for the globe as a whole. The auto trade journal Ward’s reports the number of cars and trucks on roads around the world has for the first time exceeded one billion, as global registrations jumped from 980 million units in 2009 to 1.015 billion in 2010. Registrations in China exploded in 2010 by 27.5% to more than 78 million vehicles. China now has the world’s second-largest vehicle population (after the U.S., with 239.8 million units), pushing it ahead of Japan, with 73.9 million units, for the first time. India’s vehicle population underwent the second-largest growth rate, up 8.9% to 20.8 million units. Brazil experienced the second largest volume increase after China, with 2.5 million additional vehicle registrations in 2010.

While the market in the world’s developed countries is pretty saturated, that’s not true in the world as a whole. In the U.S., the vehicle-to-person ratio was 1:1.3 among a population of almost 310 million. Italy was second with 1:1.45. France, Japan, and the U.K. followed, all of which fell in the 1:1.7 range. In China, the ratio was 1:17.2 among the country’s more than 1.3 billion people. India, the world’s second most-populous nation with 1.17 billion people, saw a ratio of 1:56.3.

With growing demand from non-OECD countries, it should not be surprising that global oil prices remain stubbornly high. As Stuart Staniford has pointed out at Early Warning, peak oil is not synchronous: the peak in oil consumption arrives earlier in some countries than in others. In the U.S., the peak oil consumption is clearly in our rear view mirror.

In many non-OECD countries, oil consumption is still growing, while global crude production has peaked and all-liquids production is struggling. The consequence: falling demand in OECD countries no longer suffices to bring global oil prices down to a point where economic activity can return to normal. Rather, the reality of multiple, endemic economic crises erupting and festering around the globe has become the new norm.

Transportation, employment statistics consistent with peak oil

August 12th, 2011 by Jim Just

One of the predictions of peak oil theory is that as the peak in global oil production rates is approached, economic activity will begin to stumble and eventually decline. Peak oil means the era of economic growth is over and a new era of economic contraction begins. Global oil production reached a plateau in 2004, and has been bouncing around that level ever since. It should not be surprising that the level of economic activity has been bouncing around too, unable to sustain the path of robust growth that we have become accustomed to view as normal.

One indicator of economic activity is transportation. A recent post here noted travel on all U.S. roads and streets was down 1.9% compared with May 2010. VMT has been below the 2008 peak for 42 months. That’s a new record for longest period below the previous peak, and we’re still counting. The 2008 peak in VMT may never again be breached.

Rail freight traffic is down, too. Carload traffic peaked in 2008, and intermodal traffic (using intermodal or shipping containers) in 2006 – as seen in these graphs posted by Bill McBride at Calculated Risk.

Another indicator of economic activity is employment. As this chart posted by Mish Shedlock shows, employment peaked in the U.S. in 2008.

Employment today is not only substantially below the 2008 peak- it’s lower than it was 10 years ago.

The participation rate as well as the absolute number of people employed in the U.S. economy peaked ten years ago, as seen in this chart posted by Calculated Risk.

People are dropping out of the economy. A record number of people are now participating in the economy only on a part-time basis, as seen in this chart posted at Calculated Risk:

Many are dropping out of the economy completely. Were it not for people dropping out of the labor force for the past two years, the unemployment rate would be well over 11%, instead of the 9.1% recently reported by the Bureau of Labor Statistics (BLS).

If you start counting all the people who want a job but have given up, all the people with part-time jobs who want a full-time job, all the people who have been dropped off the unemployment rolls because their unemployment benefits ran out, you get a more accurate  picture of what the real unemployment rate is. That number – the U-6 number- is seen in in the last row of this chart posted by Mish Shedlock: 16.1%.

Much of the economic growth seen in the U.S. over the last fifty years was a function of more and more people leaving the household economy to participate in the formal economy, where their efforts are measured (and taxed). The last decade demonstrates how hard it is to maintain economic growth – and government revenues – as people are dropping out of the formal economy rather than entering it.

U.S. roads have seen peak vehicles

August 4th, 2011 by Jim Just

U.S. light vehicle sales were at a 12.23 million SAAR (seasonally adjusted annual rate) in July, according to an estimate from Autodata Corp. – up 6.1% from July 2010, and up 6.2% from the June 2011 sales rate.

The July sales rate trails the 12.5 million pace set in the first half of 2011. U.S. passenger vehicle sales totaled ~11.5 million in 2010 – the second-worst year in almost three decades. Sales in 2009 totaled ~10.4 million.

U.S. light vehicle sales remain at levels last seen about 20 years ago, as seen in this chart posted at Calculated Risk.

In 1991, the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

Experian Automotive reports that the number of new cars and light trucks on U.S. roads in the last half of 2010 was about equal to the number of older cars disappearing, as the number of light vehicles scrapped (~5.7 million) – equaled the number of new vehicle registrations (also ~5.7 million). In the fourth quarter of 2010, the annual scrappage rate was 5.3 percent for cars and 3.5 percent for light trucks. There are about 137,080,000 cars and about 101,235,000 light trucks registered in the U.S. (BTS data as of 2008 – the most recent data available). So 7,265,240 cars and 3,543,225 light trucks are now being scrapped each year, for a total of 10,808,465 vehicles – which yields an overall scrappage rate of 4.5%. (Note: Experian Automotive estimates that as of the end of 2010 there were ~239,812,000 cars, trucks and crossovers in use in the United States -or 1,497,000 more than the BTS estimate of 238,315,000 for 2008).

Experian Automotive notes that Q4 scrappage rates in Q4 2010 were substantially higher than Q3 rates – the scrappage rate for cars was up 28.3%, and the scrappage rate for light trucks more than doubled, up 58.2%. The scrappage rate in the U.S. is volatile and has been trending down over the last 40 years – but 4.5% is abnormally low and is unlikely to be sustained for long.

At the rate of 6.1% which has been the average over recent years, about 14.5 million vehicles would be disappearing from U.S. roads each year.

The U.S. will never see auto sales return to the average annual sales of 16.8 million vehicles seen in the period 2000 – 2007. High unemployment means that fewer people are in a position to buy a new car. And, as Tom Whipple points out at Falls Church News Press, high fuel prices – a symptom of peak oil – are sucking hundreds of billions of dollars out of peoples’ pockets, and the life out of our economy.

Washington DOT figures show declining traffic over Columbia River crossings

July 29th, 2011 by Jim Just

A recent post observed that vehicle miles traveled (VMT), both nationally and in Oregon, are trending down rather than up. The 2008 peak in VMT nationally has yet to be regained. The question was begging to be asked: if VMT is going down rather than up, is the Columbia River Crossing really needed? And since its financing rests on projections of robust traffic increases over the coming decades, are proponents’ financing plans pie in the sky, or will this project rather prove to be an albatross around taxpayers’ necks?

Unfortunately, the Federal Highway Administration does not contain information specific to either the I-5 crossing or the 205 crossing. Clark Williams-Derry in a post at Sightline Daily notes that the Washington Department of Transportation’s latest Annual Traffic Report does contains information specific to the two crossings.

First, it’s important to point out that the report shows that annual VMT on Washington roads reached a peak in 2007 that has not been regained. And traffic has barely grown over the last decade: VMT in 2010 was a miniscule 0.44% above that in 2000. [See p. 48 of the report.]

Williams-Derry posts this chart showing traffic volume on the two existing Columbia River bridges over the past decade . . .

and observes:

Since the new millennium, though, annual traffic growth has averaged about 0.5 percent.   Even if you exclude the declines in 2008, traffic grew at only about 1 percent per year starting in 2000.That’s for the two highway bridges together.   If you look just at the I-5 span across the Columbia, traffic volumes in 2010 were just a hair above what they were in 1999.   That’s more than a decade with essentially no growth in traffic!!

Traffic volume over the two bridges is down a combined2.2% since the 2007 peak. Traffic volume over the I-5 crossing alone is down 3.1%. [See pp. 67, 161.]

In the face of stagnate traffic volume growth over the last decade and declining traffic volume over the last four years, how many billions are we willing to gamble – faced with peak oil, rising gasoline prices, and a faltering economy – that the recent trend will be reversed and the presumed need for additional road capacity will in fact materialize?

Washington DOT figures show declining traffic over Columbia River crossings

July 29th, 2011 by Jim Just

A recent post observed that vehicle miles traveled (VMT), both nationally and in Oregon, are trending down rather than up. The 2008 peak in VMT nationally has yet to be regained. The question was begging to be asked: if VMT is going down rather than up, is the Columbia River Crossing really needed? And since its financing rests on projections of robust traffic increases over the coming decades, are proponents’ financing plans pie in the sky, or will this project rather prove to be an albatross around taxpayers’ necks?

Unfortunately, the Federal Highway Administration does not contain information specific to either the I-5 crossing or the 205 crossing. Clark Williams-Derry in a post at Sightline Daily notes that the Washington Department of Transportation’s latest Annual Traffic Report does contains information specific to the two crossings.

First, it’s important to point out that the report shows that annual VMT on Washington roads reached a peak in 2007 that has not been regained. And traffic has barely grown over the last decade: VMT in 2010 was a miniscule 0.44% above that in 2000. [See p. 48 of the report.]

Williams-Derry posts this chart showing traffic volume on the two existing Columbia River bridges over the past decade . . .

and observes:

Since the new millennium, though, annual traffic growth has averaged about 0.5 percent.   Even if you exclude the declines in 2008, traffic grew at only about 1 percent per year starting in 2000.That’s for the two highway bridges together.   If you look just at the I-5 span across the Columbia, traffic volumes in 2010 were just a hair above what they were in 1999.   That’s more than a decade with essentially no growth in traffic!!

Traffic volume over the two bridges is down a combined2.2% since the 2007 peak. Traffic volume over the I-5 crossing alone is down 3.1%. [See pp. 67, 161.]

In the face of stagnate traffic volume growth over the last decade and declining traffic volume over the last four years, how many billions are we willing to gamble – faced with peak oil, rising gasoline prices, and a faltering economy – that the recent trend will be reversed and the presumed need for additional road capacity will in fact materialize?

Peak VMT in the rear view mirror?

July 24th, 2011 by Jim Just

The Federal Highway Administration reports travel on all roads and streets was down 1.9% compared with May 2010. Cumulative travel for 2011 is now down 1.0% compared with 2010.

Bill McBride at Calculated Risk posts this chart showing VMT (rolling 12-month average) since 1971.

McBride notes that in the early ’80s, VMT (rolling 12 months) stayed below the previous peak for 39 months. Currently, VMT has been below the previous peak for 42 months – a new record for longest period below the previous peak – and still counting. Hold in your mind for a moment the possibility that the 2008 peak in VMT might never again be reached.

In Oregon, VMT in May was off 2.4% from May 2010. Cumulative VMT for 2011 is now down 2.5% from 2010.

It’s not just total VMT that seem to have peaked. Truck tonnage was down in May, too. Truck tonnage has yet to regain 2008 levels, much less retouching levels last seen in 2005.

Evan Manvel at Blue Oregon has been out in front hammering at the proposed Columbia River Crossing (CRC), arguing that the financing plan is pure fantasy:

While blowing through $130 million of taxpayer money, project managers have told themselves a story: roughly one-third of the nearly $4 billion cost would come from the federal government, one-third from the states, and one-third from tolling (the $4 billion estimate may well be another fantasy).

All three of these pots of money are highly suspect. U.S. House Transportation Chair John Mica is pushing to cut federal transportation funding by a third. Neither the Oregon nor the Washington legislature has contributed their share of the project, beset by maintenance costs and other projects, as well as having healthy skepticism about the CRC fantasy. And perhaps the weakest link — though admittedly the competition is fierce? Tolls. . . .

Let’s be clear: the tolling financing is a balloon payment, predicated on ever-increasing traffic and toll levels. Ever-increasing traffic at the projected levels is a falsehood. Ever-increasing tolling rates are a political nightmare.

It looks like the project’s pushers’ projections of ever-increasing traffic loads are already proving illusory. The need for this white elephant – for additional capacity to accommodate ever more commuters and ever more trucks – will never materialize. The money to finance it will never materialize, either.

Climate change: urban structure irrelevant?

June 28th, 2011 by Jim Just

Cities as a whole have been estimated to produce up to 80% of global greenhouse gas emissions. Thus, decisions on the structure, including the building types, density, location and public transport, establish the long-term frames for the greenhouse gas emissions of a community.

But a new study from Finland – Implications of urban structure on carbon consumption in metropolitan areas – finds that, when it comes to carbon emissions, urban structure doesn’t make much of a difference.  The study looked at dense center cities , where apartment buildings dominated housing and diverse public transport was available; and “rural” cities with a lower density, a high share of detached houses, and weaker public transport. The study considered the effects of density, dominant building type, private driving and income on the carbon consumption.

Surprisingly, the study found the carbon consequences of urban density and dominant building type to be insignificant, based on a life cycle assessment: there proved to be no clear correlation between urban density and carbon consumption. Despite the identified connections between carbon consumption and urban density, it seems that the effect of density on carbon emissions is rather low, and that other factors override the effect.

The researchers seemed to have stumbled upon something they hadn’t anticipated or designed the study to analyze: what really seems to matter is income. As incomes rise, people engage in more carbon-spewing activities:

The rest of the carbon categories, the consumption of goods and services, reflect clearly the effect of income on the emissions. However, this part of the carbon consumption was not the focus of this study, and also cannot be analyzed in depth with the presented hybrid model. The model shows that traveling abroad and the use of services grow as earnings grow * * * but regarding daily consumption, it is not possible to differentiate amount and quality.

One interesting notion about the relation of income and carbon consumption is that emissions seem to grow as income grows, but with decelerating speed. * * * It seems that the share of savings increases rather rapidly as earnings grow.

The slight growth in energy-related carbon consumption found in less dense areas compared to the denser metropolitan core is overwhelmed by the high correlation of income and carbon consumption.

The results of the study may not be directly applicable in the U.S. Consider that in the E.U., the transportation sector generates 20% of greenhouse gas emissions, while in the U.S., transportation accounts for 33% of total greenhouse gas emissions [in Oregon, 34% of emissions are from the transportation sector; in California, 36%]. In Finland and the rest of Europe, the effect of private transport on overall carbon consumption per capita is quite weak when all emissions related to driving are calculated, including car manufacture, deliveries and maintenance of vehicles (the share of fuel combustion of all all emissions related to private transport is 50–70%, the rest being dominated by emissions related to car manufacture and maintenance). Thus, growth in trip generation due to a decline in the density of the city structure has a relatively minor effect on the overall carbon consumption. Here in the U.S., the contribution of fuel combustion to total emissions may be much higher.

The studies’ authors offer a modest suggestion.

When solutions for low-carbon living * * * are searched for, consumption-based assessments of emissions are essential.

Now here’s a truly revolutionary idea: if we are to emit less, we’ll have to consume less. No more growing the economy; rather, we’ll have to shrink the economy. It’s that simple. It’s the economy, stupid.

peak VMT? Drop in VMT longest on record

June 21st, 2011 by Jim Just

The Federal Highway Administration reports that travel on all roads and streets is down 2.4% for April 2011 as compared with April 2010. Cumulative travel for 2011 is now down 0.8% from 2010 levels.

VMT in Oregon is off 1.6% from April 2010.

Calculated Risk reports VMT has now been below the previous peak for 41 months, a new record. During the last oil crisis in the late ’70s and early ’80s, VMT (rolling 12 months) failed to regain lost ground for 39 months, as seen in the chart below.

The fact that travel on U.S. roads is still dropping should raise questions about whether the fanciful projections of future traffic levels will ever come to pass – and whether committing billions of dollars to new road and bridge projects is a wise investment.

Has the U.S. seen peak VMT? If peak VTM is in our rear view window – and if our climate and ecological crises demand the collapse of industrial civilization – oughtn’t we now stop investing in automobile infrastructure?

Is more road capacity really needed?

June 10th, 2011 by Jim Just

Evidence continues to mount suggesting that the seemingly inexorable trend of ever-increasing travel on U.S. roads is faltering.

As we noted earlier here, VMT for 2011 are now down 0.1% from last year and are still well below the pre-recession peak reached in 2008.

Truck traffic on U.S. roads is down, too. The Ceridian-UCLA Pulse of Commerce Index, based on real-time diesel fuel consumption data for over the road trucking, fell 0.9% on a seasonally and workday adjusted basis in May, after falling 0.5% in April. The index has now declined in four of the first five months of 2011, and in eight of the past twelve months. As seen in this chart posted at Calculated Risk, truck traffic remains well below pre-recession levels.

Based on an estimate from Autodata Corp, light vehicle sales were at a 11.79 million SAAR (seasonally adjusted annual rate) in May. That is down 10.2% from the sales rate last month (April 2011), although up 1.5% from May 2010. Again, Calculated Risk has posted a great chart showing U.S. light vehicle sales since 1967.

U.S. light vehicle sales remain at levels last seen about 20 years ago, when the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

The number of cars and light trucks on U.S. roads appears to be falling, as the number of light vehicles scrapped is substantially outnumbering new vehicle registrations. The overall scrappage rate in the U.S. is about 6.1%. There are about 238,000,000 passenger vehicles in the U.S. (BTS data as of 2008 – the most recent data available – not counting motorcycles or trucks with more than four wheels). With the U.S. scrappage rate at 6.1%, about 14.5 million vehicles are being removed from U.S. roads each year.

The U.S. appears to have entered a new paradigm when it comes to oil consumption, as seen in this chart posted at Mish’s Global Economic Trend Analysis.

As seen in this chart at the U.S. Energy Information Administration website, U.S. oil consumption peaked in 2005.

In 2005, the U.S. burned through 20,802,000 barrels of oil per day. The rate of consumption fell to 18,771,000 b/d in 2009, then rose a bit to 19,148,000 b/d in 2010. Oil consumption in 2011 is faltering again, and is now behind the pace set in 2010.

Maybe it’s not so smart to be squandering billions on new road and bridge projects?