Whats the amount of oil saved when rail tonnage drops by 10% ?

Show me the source for your numbers.

Lets take and example a train has 100 cars tonnage drops by 10% the train now has 90 cars.
Does oil usage drop by 10% ?

Lets say tonnage drops by 50% the train now has 50 cars.
Does oil usage drop by 50% ?

I thinks its fairly obvious that making assumptions based on dropping sales and even tonnage and how they relate to oil usage is difficult.

Lets take another example UPS has shipments drop by 50% every day twice a day it sends out its delivery trucks only now they are half full how much oil has been saved.

What you and a lot of people are missing is the false efficiency gains when the velocity of money increases.
When the transaction rate is high then most transport moves fully loaded when it drops partial loading is common.
For many industries the ability to cut deliveries is limited i.e the trucks have to run full load or not.

Or the other example I use you go to the grocery store and by cheap foodstuffs for half the price you normally spend
the revenue for the grocery store drops by 50% but whats the change in oil usage ?

Given that the velocity of money has increased dramatically in the last few decades we can expect minimal fuel savings as the velocity falls back to historical norms.

Now I do have a rule of thumb I've worked out since I've actually taken the time to ask these questions.
For each 10% decrease in economic level i.e GDP you get about a 1-2% reduction in oil usage.

One special exception exists which is the housing construction industry which is very oil intensive its decline is closer to 1:1 and the overall decline depends on how much of the economy this represents. Note this is in general only the final construction not the secondary manufacturing efforts which are much less oil intensive. For the US this could result in as high as a 2-4% contraction with additional contraction included and weighted your looking at a
baseline contraction of about 3-5% in oil usage. Potentially as low as 2% since in general people don't stay unemployed they take other jobs potentially at lower pay. With this a 10% drop in economic activity could result in as little as a 0.5% change in demand over the longer term i.e 6 months as people take less desirable jobs.

If you look at historical VMT during recessions and at areas that have had long term depressed economies you will find that oil usage tends to go flat in line with the population and independent of the economic level. I.e a poor town in the Mississippi delta with a average income of 15k has almost the same oil usage level as say a Colorado town of the same size with a average income of 30k.

Its very easy to slow the velocity of money down to a crawl its difficult to reduce the intrinsic transportation needs of a given population without building extensive public transport.

Demand with the exception of ceasing building unneeded houses is very inelastic. Cuts in other industries do not result in anything close to the same fuel savings level as you get from housing. The intrinsic reason is of course the need for scheduled deliveries. Given that the world has moved to a JIT just in time inventory model the ability to reduce transport costs are dramatically lower now then they where in the past.

Obviously one way around this is to increase inventory levels where possible however this is difficult to do in a declining economy. Another solution and one I think we will see is a dramatic cut in the number of stores in a given area this is far more likely. However outside of pulling back from over expansion further reductions in the number of retail outlets will probably only come as prices increase. And worse its not clear that this will reduce overall fuel usage since as the number of store fronts decline customers will have to drive further to purchase items. In fact I'd suggest that as stores close the overall fuel usage actually increases not decreases.

But again your the demand expert so I defer to your incredible knowledge of the subject.
I must be a bit dumb because I find calculating demand changes to be a difficult subject. It really depends on what the velocity of money was which is directly related to the "loading" factor or precent utilization of the transport network was before the decline. If utilization was high then oil usage will not decline that much with declining sales. We have plenty of evidence that our transportation system was maxed out over the last several years.
This means we will need to see effectively depression level pullbacks in the economy to get much past the initial housing related decline.

http://money.cnn.com/2008/12/09/news/economy/gas_demand_up/?postversion=...

Well that's the million dollar (700Billion Dollar?) question...

When 'times are easy' / we have cheaper energy all these renewable sources don't stack up from a business case angle. When oil is expensive commodities (really a proxy for energy IMO) go through the roof and everything gets more expensive including renewables. I think this is called the "Law Of Receeding Horizons..."

[note to TOD Editor: is it possible to have a PermaLink / page setup that defines all these nice Laws so we are all talking off the same page?]

Now Gas is cheap isn't it about time America considered a higher Gas tax than 10%? -You can invest the money within the US, repair your bridges / roads and create thousands of new jobs...

Nick.