Energy
People Still Driving Less, Oil Demand Destruction
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The US Department of Transportation yesterday released its report on traffic volume for the month of September. Compared with 2007, miles driven fell by 4.4% during the month, and cumulative travel for 2008 dropped by 3.5%. On the basis of a moving 12-month average, travel is now about the same as it was in 2003.
The big difference is the cost of gasoline. September gasoline priceswere still very high, right around $3.50/gallon. Prices didn’t startfalling dramatically until October.
We’ll have to wait until the October report to see if falling gasolineprices have encouraged drivers to get back behind the wheel. But, tohazard a guess, I suspect that drivers are still driving less and willcontinue to do so until the overall economy picks back up. By the timethat happens, people could be used to driving less and enjoying it more.
Less consumption is the single best way to reduce US dependence onforeign oil. While not painless, high prices for gasoline and lowconsumer confidence in the overall economy may contribute topermanently reducing US oil consumption.
Paul Ausick
November 20, 2008
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