Hurricanes increase driving, gas prices decrease it
Posted by Stuart Staniford on December 23, 2005 - 5:22am
Topic: Economics/Finance
Tags: hubbert peak, oil prices, peak oil, vmt [list all tags]

Percentage change between monthly VMT in 2005 and the same month in 2004, by state, for five hardest hit and five most favored states. Click to enlarge. Source October FHWA Traffic Volume Trends

US Vehicle Miles Traveled (VMT) for the last three years through October. Click to enlarge. Graph is not zero-scaled. Source October FHWA Traffic Volume Trends
The FHWA breaks out statistics by class of roads. Rural traffic has been suffering at least since the beginning of 2004. Presumably this reflects that rural economies are less wealthy and more gasoline dependent, and long haul travel is more sensitive to diesel costs.

US VMT on rural highways only for the last three years through October. Click to enlarge. Graph is not zero-scaled. Source October FHWA Traffic Volume Trends
By contrast, there is little pain visible on urban highways till this year. However, the effect was pretty substantial by October.

US VMT on urban highways only for the last three years through October. Click to enlarge. Graph is not zero-scaled. Source October FHWA Traffic Volume Trends
Finally, the most interesting question. Did the hurricanes mainly reduce VMT by direct effects on travel in the affected region, or by price? Turns out to be price: absolutely no doubt about it. Louisiana and Mississippi saw a huge increase in VMT, but the rest of the country reduced VMT. The North East was hit hardest, and the West was affected the least.

Percentage change between monthly VMT in 2005 and the same month in 2004, by state. Click to enlarge. Source October FHWA Traffic Volume Trends
Here's a map from the Bureau of Economic Affairs of average annual GDP growth from 2002-2004 by state.

What you can see is that the states that had to reduce VMT were pretty much the states that had slower growth economies. This may be a general truth: the slower your growth now, the more you'll have to reduce as peak oil bites. New England seems to be seeing a little extra drop in October - nobody going up to see the fall colors, maybe, with gas prices so high?




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