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Analyst sees 10 million fewer cars by 2012
Associated Press — 6/28/2008 8:42 am
NEW YORK -- Growing global demand and supply constraints will push oil prices to $200 a barrel and gas prices to $7 a gallon within four years, forcing 10 million U.S. cars off the road, according to Jeff Rubin, chief economist at CIBC World Markets.
"Many of those in the exit lane will be low income Americans from households earning less than $25,000 per year," Rubin said in a statement. "At their current driving habits, filling up the tank will have risen from about seven percent of their income to 20 percent, an increase that will see many start taking the bus."
The rise of gas prices to an average of about $4.07 a gallon from $1.80 in 2004 is already forcing changes in Americans' car-buying habits. Car sales have dropped to about 14 million a year from 17 million in the first half of the decade, and will fall further to about 11 million a year by 2012, Rubin said.
Gasoline demand is also falling sharply in the face of record prices. Demand dropped 2.1 percent over the past four weeks on average compared to the same period a year ago, the Energy Department said earlier this week. Demand is headed for the first year-over-year decline in 17 years, and will continue falling as long as gas prices remain high, Rubin said.
By 2012, "average miles driven will likely fall by as much as 15 percent, while the market share of light trucks, SUVs and vans will be literally halved," Rubin said.
Gas prices were unchanged Thursday at a national average of $4.067, according to a survey of stations by AAA, the Oil Price Information Service and Wright Express. Gas prices have retreated slightly from a record of $4.08 set June 16, but are unlikely to fall much more as long as crude oil remains in its recent range between roughly $131 and $140.
Front-month crude futures surged above $140 a barrel for the first time Thursday, propelled by OPEC comments that oil could rise well above $150 a barrel, reports Libya is considering cutting oil production and a view that the dollar will continue falling against the euro.
(this paragraph sums it up nicely)
Rubin thinks that as gas prices continue rising Americans will, of necessity, begin imitating the driving habits of Europeans, who have long faced much higher fuel prices. He notes that while over 90 percent of American households currently use a car to get to work, only 60 percent of British households do so. Also, more than 60 percent of U.S. households own two or more cars; only 25 percent of British households own more than one vehicle.
BYE BYE SUV!
I'm thinking about getting a horse actually and forgoing carbon fuel-burning transportation altogether.
HAHA!
I hear that horses make good pets, --- although I bet they'd take up too much space in my tiny apartment for myself to allow them indoors (lol).... especially considering that my 4 cats and 5 fish already compete too much for my attention!!
I'm trying to come up with some new devise to harness at least some of my 4 cats' energy into serving my transportation needs.... Right now, all I do is feed, clothe ("clothing optional", in their case), and clean up after them. The pay-off, of course, is that they will take care of me in my old age (lol); but, since I still pay all of the rent (they don't help out even one bit), I feel it's only fair that I should be able to get more out of my investment... "Cat & Buggy", instead of the old-fashioned, "horse & buggy?" I'll keep you posted, once I figure out how to invent this multi-million $$ idea of mine!
- Ken
Maybe you could come up with some device to have the cats run on a treadmill or gerbil-wheel type device to generate electricity or devise a scratching post whereby each scratch somehow generates power. Or, they say that tying a piece of buttered bread to a cat's back creates an anti-gravity device. A cat always lands on it's feet; a piece of buttered bread dropped always lands buttered side down. Therefore, the cat with a piece of buttered bread tied to its back can do nothing else but float in the air, per the laws of physics.
Well Matt, guess I'm all set with my new Trike from Goo-Goo's Toy Store. Equipt with the finast REAL Plastic horn and a metal ringer on the handle bars. I can even drive it in my sandbox! (Has 3 wheel drive.) An amazing mode of transport as long as I don't wear my legs out. Oh yes, almost forgot. This is the DELUX Model J, (Not the usual boring model T) and also comes with a Crystal-Set Radio which fits inside the front luggage basket.
Hi John,
It wasn't all that long ago that, for 11 years out of my adult life, I lived here in San Francisco totally without owning a car, --- relying completely on public transportation for my regualr daily needs (except if I decided to rent a car to go on a vacation, or similar reasons for temporarily needing a set of wheels, --- like renting a truck to help myself move to another apartment, for example). BUT, San Francisco is one of the better cities in America to live in, if you make that decision to to let go of the gas-guzzlers (even if it only guzzles a small amout of that stuff - lol)!!
I probably will soon let go of my current vehicle as well; but, fully knowing from previous experience the life-style change I'll be in for, that will mean it will take me AT LEAST twice as long to get anywhere by bus, --- as well as I'll be doing a hell of a lot more walking! (But, hey, I could use the excersize; plus, while riding those buses, I'll doing more reading of all the books I've been wanting to get around to, too - LOL!!)...
Yes, an interesting off-topic there, John, --- and thanks for bringing it up!
- Ken
I've dreamed about giving up my car for awhile now. Being a single guy who doesn't own a house, it'd much easier for me to do than for a family. I could simply find an apartment very near where I work.
This may seem like a stupid question, but what I've been wondering is how do you go grocery shopping, or especially buy bulky essentials (like toilet paper, for example) without a car? I guess I am considering walking or riding a bike everywhere, as mass transportation is really available to me, so that would make it a bit harder.
Taxis tend to hang out around places like large grocery stores. If you drive to the store all the time, you probably have not noticed that.
Also, one can rent a car for the few days a year you just have to have one. The pile of cash you save from not making car payments, not paying for car repairs and maintenance, not buying car insurance, and not paying for car registration can cover a lot of rental days, and the cash left in the pile after car rentals will probably cover your monthly transit pass, too.
We figured that having one car and a monthly transit pass instead of having two cars saved us $100,000 over a twenty year period. That's some serious change!
Bill
problem is were I live there is no public transportation
and taxies are not available eather
so you do have to have a car and drive
and I am sure there are lots of places like that.
but I agree gas prices are nuts!
TP? You just walk it home...
OK, I live where the Safeway and Trader Joe's are both less than a dozen blocks away...Safeway is on the bus line home from work, so I just get off early and pick up what is needed. TJ's ditto. So I don't do giant shopping trips, instead doing more frequent smaller stops. I have hordes of smaller (mostly Asian) stores within a few blocks of home.
High!
As I never have been to the US, I don't know how big the usual package of toilet paper is over there - here in Germany, it's mostly eight rolls in one package, so they can be easily strapped upon a bicycle's back carrier... and not so few people here also own two-wheel bicycle trailers, some of them large and robust enough to carry a fridge, a washing machine or even a Hammond organ (my preferred application for bicycle trailers, although I had not yet the change get such a massive trailer...)!
See you in Khyberspace!
Yadgar
Now playing: Never Stopped In My Home Town (Les McCan)
I remember gas being less than one dollar when I was young. Now, it is already more than four dollars a gallon, and I still see tons of cars on the road. Higher gas prices means fewer cars on the road, and I am getting very tired of getting into traffic congestion when I am getting home or to sports practice from work on the bus. Being in traffic congestion on the freeway is one of the biggest dislikes in my life. When I am on the freeway, I want to move like the wind. I do not drive a car. I take public transportation and it is quite good in Seattle. I was suprised that the prices could increase further to seven dollars a gallon in a few years. How high do you think gas prices will eventually become?
Regardless
The land mass in the US is much greater. What this will do is drive most of the poorest people into the cities where they can be better controlled. It will be expensive to live in the country and commute to work. Where I am there is no public transportation and no grocery stores. It will also devalue the property in areas like these cuz nobody's gonna want to live here due to gas prices.It's all one big chunk of crap anyhow. They shoulda been going to alternative energy sources in the 70's.
Or, alternatively, people in the country begin to revert back to sustainable lifestyles, growing some of their own food, relying less on corporately-controlled food sources sealed in plastic. It could be that more costly transportation is beneficial in the long run. In the days before automobiles, necessary establishments, post offices, schools, small stores, etc. were more evenly distributed throughout the countryside. Even county seats were supposedly located (at least here in GA) no more than a day's buggy ride (there and back) away. If more are driven into cities, the cost of shipping in resources from the hinterlands still remains. Regional and subregional sulf-sufficiency in terms of basic resources, food production, etc. seems a better scenario to hope for than overcrowded cities with more people seeking less jobs and no means to feed themselves.
LoL I'm working on that very thing. Most Americans though would have no clue how to live the rustic life. Like can their own food. Grow herbs for medicine. Using soil to purify chemicals out of water. There will be some. They will be the lucky ones IMO. so in short I have to agree with your premise.
Over here, a lot of the political outrage and media published blame has been directed towards those who speculate on oil/gas prices (the futures market) for the price of gas. It has been claimed that if the futures market were regulated, the price of gas would drop 50% in a month.
While I hate everything that is dirty and ugly about the oil industry, the obscene profits, the war for oil, a.k.a. the Iraq war, and the history of exploitation of people in the middle east to name three things, there is plenty of pleasant fall-out from the high price of gas in the U.S., for people like me to enjoy:
Firstly, the obvious--people are driving less, combining errands, driving more efficient vehicles, and the major automotive companies are finally beginning to seriously develop electric cars, although they seem to be dragging their feet for reasons good and bad. In fact, crummy 15 to 20 year old small high mileage cars such as the GEO Metro, are being sold for prices unthinkable a year ago. These cars are death traps since they have no modern safety features, but due to their light weight, tiny 3 cylinder engines, they get over 40 mpg.
Mass transportation is packed. In fact, railroads in America can't run enough passenger trains to handle the demand because they can't find and buy new rolling stock. Local commuter trains are SRO on weekdays, and Amtrak reports being sold out for the July 4th holiday weekend.
People are beginning to move closer to their jobs and the oil barrel price/mortgage finance crisis economy has effectively ended the insanity of gigantic supersized homes on sprawling lots out in the middle of nowhere facing wide meandering boulevards and the whole American life of driving the locomotive SUV to the refrigerator, for another can of beer, swathed in air conditioning and leather.
The practice of making ridiculous and wasteful purchases such as all new kitchen appliances because "I'm tired of the way the old stuff looks" has ended. Landfills everywhere can breath a sigh of relief.
So, while I hate the idea of Exxon/Mobile raking in billions, I must say that I wouldn't be thrilled with the prospect of cheap gas were oil prices to drop. $4.20 gas is probably the best thing that's happened for the environment and the climate in 30 years, better even than signing the Kyoto agreement.
I drive a '93 Geo Storm Hatchback. Gets over 35 mpg on average. The Kelly Blue Book Value actually went UP on my car. A mint Storm that would have sold for $1200 a few years ago, can fetch as much as $2700! My well-worn Storm, complete with dings and peeling clear-coat on the roof, and 65,0000 original miles, in fair condition, fetches the $1200 a mint car used to fetch. I find THAT to be both amusing and insane. There was a story on Yahoo! about some guy anticipating this, and buying up junk used Geo's to fix-up for resale. He has made great money eBaying these 15 to 20 yo Metro's and Storms.
My Storm is a little bigger, and a little safer, than the Metro's. Insurance is cheap (about $360 for a pleasure driver), I have spent less that $400 in maintenance/repairs in the 9 years I have owned it. I consolidate trips as much as possible, so it only leaves my apartment one or two days a week. A tank of gas (currently about $25, it's a teeny tank) lasts 4 months on average. Anything within walking distance, I get to with a mobility scooter, since being mobility impaired limits my being able to actually walk.
I laugh at the crazy SUV drivers. This current gas crises is a wake-up call. It should spur the car manufacturer's to create fuel-efficient but safe alternatives; plus break America's love affair with gas-guzzling SUV's that they drive to the corner 7-11 or Wawa's, because they can. Unfortunately, living in a rural area necessitates a car. I will be moving to Newark, Delaware in the future, and not only is much of what I need within walking distance (So my mobility scooter will get me to the local co-ops, etc.), they have a vastly underutilized public transportation system there. My sister and her Bf go to a shopping center monthly to a superstore to stock up, the only car trip for shopping. Most of their food is from the local Asian, Indian and Hispanic co-op's just down the street.
My sister walks to nearly everything she needs. The bus service connects with Christiana Mall, Hospital and Health center. Buses are wheelchair accessable, so I can take my mobility scooter on the bus and go to the mall. I'm looking forward to moving, I may eventually ditch the car alltogether. Newark is a small city, and I'll actually be in the suburbs just outside the city. City dwellers should look into public transit more. Rural residents need to buy economical cars. Europe has done it for years. North Americans can adapt.
Right in the first paragraph they're already lying (or omitting most of the truth). *Sigh*
I gave up on this sort of news a long time ago.
But yeh, I'd love to get a horse (if I could afford the maintenance).
My sister in law has a horse. They eat like a horse, of course, and because of that they also crap like a horse. They also need a lot of space - you can't keep a horse in the house. Her having five acres of land on the outskirts of a small New Mexico town makes the horse a more doable proposition, of course.
A bicycle will go just as fast and it takes up a lot less space and impacts the environment a lot less. A bicycle won't get all excited and be glad to see you though. [grin]
High!
What about biking? Less aristocratic, but surely affordable!
See you in Khyberspace - www.khyberspace.de!
Now playing: Amerika (Herbert Grönemeyer)
I will be VERY surprised if gas prices actually hit $7 per gallon within in the next 25 years, at least in this country. As one person posted earlier, one of the largest problems is the futures speculation driving the price up. In reality, our current supply of oil would have a going market price of about $55 per barrel. Speculation that we will have less and less supply down the road will continue to contribute to higher prices IF THE CURRENT PATTERN CONTINUES.
However, if domestic onshore and offshore drilling and exploration is approved (which I do greatly support), and the futures market is still allowed to manipulate prices, you'll see the price of gas fall through the floor in this country, even if we don't see a single drop of oil from it for another decade.
Just my 2 cents (which is about half of the US dollar's real value!)... =)
-James
This gas thing is really getting ridiculous--
Here in the Fresno CA area, it is far over the national average, today it was $4.55 today! Is this about the same to my Bay Area counterparts?
lately I have been using public transportation for it is cheaper, and better for the environment too, and we don't have to be pushing even further into our wallets.
Regardless is so right when it comes to freeway traffic. lately I have been commuting between here and Fresno with my brother the last few weekends, about 30 mi from here, and it is ridiculous! mornings come and go with bumper-to-bumper traffic, used to you would sometimes run into a few bad areas, but mostly in the inner and downtown portions of the city, not the country or outer parts!
and it seems to get me to wonder what the use is to carpool lanes in the city if the traffic density is the same as the rest of the roadway?
My brother commutes 6 days a week to work...30 miles or so...500 dollars out of the wallet! its horrible---
I have opinions on drilling, i oppose and agree, usually agree to land-drilling, but that's just me---
I can definately see global warming take its toll!
The more hair one has, the cooler one can keep his house, and the less fuel he will need to burn. Fight global warming! Ban all hair trimming! Show you care for the environment by growing all hair to TERMINAL!
Bill
YEAH!
LOL
I live in a remote area....the nearest gas station is 30 miles (which is also a Brothel..so you can "get it" twice in one stop !). Nearest limited shopping is 50 miles; nearest real shopping is 100 miles. We are just under $5/gal for regular. Death Valley is over $6/gal in some places. I am currently working on a drilling program which requires 4 X 4 access and am spending upwards of $200/week for gas (1995 Isuzu Rodeo). The drill rigs are using up to $18,000/week of diesel.
The current prices are intermediate gouging based on futures. Americans have always been adaptable and eventually will find a way off dependency on foreign oil. In this country, there are massive oil fields that have been drilled and capped, waiting, there are areas yet to be explored. Science and Technology is in place for alternative energy, but politics and economics will not permit implementation, yet.
While the suburban Mom does not need a 9 ton Hummer to take baby to daycare, most workers in heavy industry require more than a Honda. Meanwhile this is all very scary for folks who are living on the financial edge.
Some folks in small countries do not comprehend how expansive America is and that our working culture requires extensive travel. Public transportation is not practical outside of urban areas.
NO, not amusing...
Walter
Almost $5? That's weird because here in Vegas its like around $4.19 average, and this city is far from small anymore.
Sadly we didn't learn our lesson in the early 70's. we bought small cars for a while then starting in the late 80's the suv craze began, bigger and bigger they got until finally the hummer came along. We've been so used to cheap gas we just carried on as usual and now the day is near we will have to make permanent changes to how we live and do business.
It's almost as if we're getting our comeuppance after all these years. I sympathize with those who have to drive and live in rural areas but this was inevitable if you think about it.
In the late 90's a barrel of oil hit a low of about $13 or $14 and OPEC was all in a tizzy, funny how things change in 10 years.
Kevin
The reference to European driving habits in the article is just ignorant.
American cities and suburbs are set up much differently than in Europe. My wife and I both drive 17 miles each way to and from work. There is no public transportation for us to take.
And where each of us works is not a place where I want to raise my kids (nor do I wish to live). So I'm not moving closer to work. Even if I wanted to, who's going to buy my house in this market?
The U.S. has different transportation needs than in Europe.
That's not entirely true. What's happened in America is that decades of cheap gas and the selling of cars as a personality extension by U.S. car makers have resulted in this world of personal motor transportation in which everyone has become used to this freedom to go anywhere they please at any time. It's nice and I must say I enjoy it too but we've been spoiled and Americans are going to have to make some concessions in the future.
In his recent New York Times column, Paul Krugman wrote that Europeans have been dealing with expensive gasoline for decades with sucess because they: Drive small cars, mostly reside in clusters of dwellings near market places and transportation hubs and avail themselves of public transportation.
The problem America faces is that a huge infrastructure has been built, especially following WW II with the automobile in mind, i.e. lots of paved roads; hardly any public transportation. While European countries were building railroads, America was laying out streets and highways. It will take decades to reverse this, and our population distribution.
Even worse, American automobile manufacturers managed to elimiinate light rail urban lines in such cities as Los Angeles in order to sell their desiel buses. So whatever transportation needs the U.S. has are only due to the social engineering that has taken place during the past 60 years. These needs can change once Americans are ready to adopt a European order to their lives.
I wouldn't lump all of europe into one pile. Brussel's public transportation system is falling apart and really terrible. The trams are half a century old (or have never had maintenance) and travel slower than my bicycle. Switzerland on the other hand (at least Geneva) had relatively fantastic public transport. Funny thing is the Swiss have much lower taxes...hmm.
Actually if you want a good public transport model, look at some places in South America, where privately funded "public" transport (same ticket systems) is both cheaper, and of a higher quality. The wonders of competition :)
There was one city in particular but I can't remember the name now :/
So where did you live then?
In time America will have to evolve to meet the new reality of high fuel costs. As I said in an earlier post we'll have to change the way we live and do business.
We'll have to start building transportation both commuter and city to city. As middle income and even higher income people begin moving back to cities not so good neighborhoods will slowly be gentrified. There are all kinds of possibilities and it will take decades for any kind of shift to take place.
Kevin