tag:blogger.com,1999:blog-5235419263414453422.post2525340793065979590..comments2024-02-23T01:30:06.101-08:00Comments on Early Warning: US Competitiveness in a Tight Oil EraStuart Stanifordhttp://www.blogger.com/profile/07182839827506265860noreply@blogger.comBlogger24125tag:blogger.com,1999:blog-5235419263414453422.post-89991028914950545672009-12-04T09:44:03.537-08:002009-12-04T09:44:03.537-08:00Yes! Here's something else of interest....the ...Yes! Here's something else of interest....the growth of debt service payments. And when you consider that indebtedness is probably more common among those whose demand is not saturated, it makes the effect greater. This <a href="http://research.stlouisfed.org/fred2/series/TDSP?cid=97" rel="nofollow"> graph from the fed </a> might overlay nicely on your GDP/VMT.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-32955376751342179732009-12-04T07:38:14.046-08:002009-12-04T07:38:14.046-08:00Post 2001 is the era of massive growth in financia...Post 2001 is the era of massive growth in financial services. One issue with the CB household income data is that while it spends lots of space picking over the details of poor people it doesn't give much on the rich (or I'm missing it). I'll see if can find some data else where on financial services.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-79739701996894987112009-12-04T07:26:58.213-08:002009-12-04T07:26:58.213-08:00Dunno very much about equality measures but I thin...Dunno very much about equality measures but I think you might be right.<br /><br />What I can say is that under Clinton the proportion of households making over 100K in 2008$ was expanding mightily. (which I think is what really matters for this issue. eg. how many may be maxed out in their driving).<br /><br />Post 2001 your GDP/VMT graph jogs up again. And I can't make a link e with the household income data.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-52612367282680214282009-12-03T21:05:29.262-08:002009-12-03T21:05:29.262-08:00Datamunger - ok I can see there's a colorable ...Datamunger - ok I can see there's a colorable story that if the income growth starts all going to the top percentiles, VMT growth slows down. But I'd have to really see the graphs - does this story actually align with the trend we are looking at? My memory was the late nineties was exactly when the inequality was not increasing (increased under Reagan and Bush I and II, but not as much under Clinton). I could be misremembering though.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-64908903193345653532009-12-03T17:28:45.247-08:002009-12-03T17:28:45.247-08:00I should clarify by saying that hands down Ponzin&...I should clarify by saying that hands down Ponzin's demand saturation is a factor in the uptrend in real GDP/VMT since the nineties. But, agreeing with Stuart, it doesn't account for any absolute decline in VMT.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-33454983290249499282009-12-03T13:13:08.483-08:002009-12-03T13:13:08.483-08:00Kjm - I don't see how relative income could ma...Kjm - I don't see how relative income could matter here. If my neighbor gets richer, how does that mean I drive less? And although income inequality has indeed increased since 1992, absolute income has increased in almost all percentiles since then - it's just increased more for the wealthy than the poor.<br /><br />I agree the Internet thing is only an unproven hypothesis (which I think I was careful to say from the outset).Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-37492446822113527072009-12-03T13:12:18.392-08:002009-12-03T13:12:18.392-08:00kmj said:
My argument was that rising income ineq...kmj said:<br /><br /><i>My argument was that rising income inequality was putting more of the population in the lower income groups that drive less</i><br /><br />For other reasons, I've spent the afternoon poking around in <a href="http://www.census.gov/hhes/www/income/reports.html" rel="nofollow">real median household income data</a> from the Census Bureau. Comparing 2008 with a dozen years ago, it's actually pretty hard to make the case either that lower income households are a greater chunk of the total, or that they are a worse off. <br /><br />But they definitely missed out on their share of the GDP growth.<br /><br />The high group that grew proportionately and did eat a lot more pie aren't interested in more driving as has been mentioned. Ponzin's "demand saturation". Hands down it's a factor. But how large? It probably could be estimated.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-68828417541911024812009-12-03T10:47:37.060-08:002009-12-03T10:47:37.060-08:00Stuart, my biggest concern was that it sounded lik...Stuart, my biggest concern was that it sounded like you were giving the internet most of the credit, when there are other more mundane possibilities. I think those of us who use the internet a lot tend to exaggerate its importance.<br /><br />I wouldn't argue that income trends mean that more people have risen into the portion of the curve where VMT declines. My argument was that rising income inequality was putting more of the population in the lower income groups that drive less. Looking into that more, the effect should be there (gini has been rising since the 70s), but it wouldn't begin to cause the amount of change in your chart. That may become a bigger effect now and in the future due to this recession.<br /><br />Whatever the reason, I agree it's a helpful trend.kjmclarkhttps://www.blogger.com/profile/00490417628052004621noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-11219848648898889232009-12-02T10:57:51.127-08:002009-12-02T10:57:51.127-08:00Stuart said:
But people won't [reduce vmt] of...Stuart said:<br /><br /><i>But people won't [reduce vmt] of their own free will - at least there is no historical evidence for that idea.</i><br /><br />There is, as mentioned yesterday, the substantial decline in VMT in the period beginning from mid 1979 to the start of the recession in early 1980. Over 2.5% decline <b>not per capita</b> :-) in only 8 months! What would have been achieved in 4 years if the recessions had not intervened? <br /><br />But consider this: driving is just one form of mobility albeit dominant. Are there data on miles flown?<br /><br />We know that consumption of jet fuel peaked in 2005 a couple of years before the current recession. Doubtless miles flown fell also.<br /><br />The trouble, I suspect, is not that consumers don't respond to oil prices by cutting driving but that their response helps bring on the ensuing recession.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-37465865270431493032009-12-02T07:25:12.690-08:002009-12-02T07:25:12.690-08:00(I should have said that median household income e...(I should have said that median household income estimate was for 1995 - it was just shy of $40k in 2003 dollars according to wiki, so must have been somewhere in the a bit north of $35k region in 1995 adjusting for inflation, which I can't be bothered to do properly right now).Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-91660517037955251972009-12-02T07:23:11.413-08:002009-12-02T07:23:11.413-08:00Kjm - I looked quickly at your links, and also ski...Kjm - I looked quickly at your links, and also skimmed the <a href="http://www.cutr.usf.edu/pdf/The%20Case%20for%20Moderate%20Growth%20in%20VMT-%202006%20Final.pdf" rel="nofollow">Ponzin paper</a> cited in your second link, which is well worth reading.<br /><br />I guess I'm not persuaded by the idea that VMT growth is declining because people are into the part the curve where it levels off with income - based on the graphs in the first paper, and a median household income in the US of about $35k, it doesn't seem to me that this effect should be too strong.<br /><br />However, a second hypothesis that definitely has some appeal is the idea that congestion is increasingly growing and imposing enough travel time burden on people that it's inhibiting trips. There's definitely evidence for increased congestion, and clearly that could explain the trend.<br /><br />I'm not attached to my Internet hypothesis at present - the timing looks about right, but I see it as an idea for future exploration, not something I'm certain of. In particular, a reason I hadn't considered it in the past was that telecommuting mode share is quite low (a few percent) and online retail is only 4% of overall retail. So those things alone could not explain as large an effect in the GDP/mile as we see. So, for it to be Internet related, I think it would have to be more of a time displacement thing - I'm less likely to to go drive somewhere because I'm glued to the computer at home. We will have to explore further in the future.<br /><br />Whatever the cause, it's an important trend, and helpful as far as responding to oil tightness goes.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-6359400288370419412009-12-01T19:11:12.085-08:002009-12-01T19:11:12.085-08:00Nick - we did get to see the results of the 70s oi...Nick - we did get to see the results of the 70s oil shocks, which involved a series of reductions in supply of 7.8% in 1973, 8.9% in 1978, and 7.2% in 1980 (<a href="http://www.econbrowser.com/archives/2005/06/economic_conseq.html" rel="nofollow">see here</a>). In each case, there was a serious recession and yet the GDP/mile ratio barely budged. So, faced with the actual situation, people did not behave in the way that you think they ought to behave.<br /><br />I do not dispute that it's theoretically possible to keep the economy working with far less VMT - we know from the example of WWII that this definitely can happen. But people won't do it of their own free will - at least there is no historical evidence for that idea. So absent a major change in how we organize our economy, what you describe is very unlikely.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-12287087360175522982009-12-01T15:56:15.026-08:002009-12-01T15:56:15.026-08:00Stuart, I think you're choosing the wrong thou...Stuart, I think you're choosing the wrong thought experiment. Instead ask: how the US could cope with a 25% reduction in supply?<br /><br />The answer: reduction of personal transportation consumption (in the form, perhaps, of aggressive carpooling,) could supply all of that reduction. That would allow everyone to get to work and do errands (albeit at the cost of a lot of inconvenience and aggravation, not counted in GDP).<br /><br />So, the fact that the US has very large and inefficient personal transportation fuel consumption is very important to the comparison.Nick Ghttps://www.blogger.com/profile/12721405349726668110noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-44578062424357146772009-12-01T11:37:23.071-08:002009-12-01T11:37:23.071-08:00kjmclark - I'll read your links later and get ...kjmclark - I'll read your links later and get back to you.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-45143017567951611942009-12-01T11:36:46.395-08:002009-12-01T11:36:46.395-08:00Mike - agreed that ongoing improvements in vehicle...Mike - agreed that ongoing improvements in vehicle technology were/are an enabler of better fuel efficiency. But consumers, and the product managers who study them, have a choice as to whether to take that improved efficiency in better fuel economy or more powerful vehicles. In the eighties, fuel economy motivated consumers, and it improved. After about 1992, with oil prices back down again, it stopped improving and cars just got more powerful.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-5094267751704649652009-12-01T10:09:50.996-08:002009-12-01T10:09:50.996-08:00More on GDP vs. VMT. This paper http://www.ce.ute...More on GDP vs. VMT. This paper http://www.ce.utexas.edu/prof/kockelman/public_html/TRB04VMT.pdf, points out that VMT doesn't increase linearly with increasing income. Their data shows that it levels out and can even drop at higher incomes. Again, VMT doesn't count air travel.<br /><br />There's also discussion of this topic at the BTS here: http://www.bts.gov/publications/bts_special_report/2007_10_03/html/entire.html<br />"For years, increasing income has been a principal factor contributing to the rapid growth of highway passenger travel. As incomes increased, the demand for additional transportation services manifested itself in a variety of ways: ... As a result, passenger highway travel, as reflected in vehicle miles of travel (VMT), increased rapidly."<br />and<br />"But there have been discussions since at least the early 1990s about whether the effects of rising incomes on travel demand would start to diminish.1 That speculation now appears to be a reality as recent data suggest the relationship has weakened—vehicle travel growth has started to slow in comparison to growth in real personal income."<br /><br />The studies that essay looked at attribute the change primarily to saturation in the number of vehicles per household. There's a stronger relationship between increased vehicles and VMT than increased income and VMT. <br /><br />I can't find much that says it's due to the internet. Am I looking in the wrong places?<br /><br />WRT oil consumption vs. production of goods and services, I completely agree that we use lots of oil getting to places where we do productive work. If no oil use is allowed this week, that would indeed shut down everything, since agriculture runs on diesel. However, if we have to cut back 5% next year, it's not really clear to me that that would <i>have</i> to affect much more than personal transportation. If we wanted to, we could pretty easily ration the consumption so that agriculture, industry, etc. - things that use oil to produce something, aren't directly affected. A lot of people would be forced into some kind of car-pooling arrangement, but it wouldn't have to bring the economy crashing down. The rapid change probably would put us into a crash, but most of Europe manages to do pretty well without as much oil burning.kjmclarkhttps://www.blogger.com/profile/00490417628052004621noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-39736696624320467092009-12-01T07:16:47.042-08:002009-12-01T07:16:47.042-08:00The big jump in motor vehicle efficiency that coin...The big jump in motor vehicle efficiency that coincides with the second oil shock (late 70s) is very likely mostly due to the big increases in engine efficiency made possible by computerized engine controls, especially fuel injection. It wasn't that the motoring public finally "got it" that fuel efficiency was important, but rather that technology came along that made it possible. Since then, auto makers have (mostly) used computerized controls to make cars accelerate faster. More gains in efficiency are possible, but without some new technological breakthrough, we can probably best reduce fuel use by significantly downsizing cars and sacrificing speed and acceleration - and by figuring out how to conduct business without driving so much. (Why do I have to drive to my job to work at a computer all day?!)Mike Aucotthttps://www.blogger.com/profile/05692592170835103639noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-79163872073665116762009-12-01T07:16:14.621-08:002009-12-01T07:16:14.621-08:00The big jump in motor vehicle efficiency that coin...The big jump in motor vehicle efficiency that coincides with the second oil shock (late 70s) is very likely mostly due to the big increases in engine efficiency made possible by computerized engine controls, especially fuel injection. It wasn't that the motoring public finally "got it" that fuel efficiency was important, but rather that technology came along that made it possible. Since then, auto makers have (mostly) used computerized controls to make cars accelerate faster. More gains in efficiency are possible, but without some new technological breakthrough, we can probably best reduce fuel use by significantly downsizing cars and sacrificing speed and acceleration - and by figuring out how to conduct business without driving so much. (Why do I have to drive to my job to work at a computer all day?!)Mike Aucotthttps://www.blogger.com/profile/05692592170835103639noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-90532082734734514542009-12-01T06:32:21.230-08:002009-12-01T06:32:21.230-08:00Hmm. GDP - the chocolate teapot of comparative mea...Hmm. GDP - the chocolate teapot of comparative measures. Nevertheless, I suppose it's the best we've got.<br /><br />In 1965, the UK was powered almost entirely by coal and oil. By 1995, coal use had dropped by more than half, oil use was the same, and gas and nuclear made up the difference. Total energy consumption within the UK hasn't increased since 1995, although that is partly because we've offshored a lot of fossil fuel use to the Far East. We use it, but it doesn't show up on the domestic gauges. <br /><br />High oil prices and falling consumption, antionally or globally, must affect the UK economy. For a start, a big chunk of UK ecnomic activity, jobs and exports are tied to car manufacture and ancillary activities. Leisure, travel and tourism will decline, taking out hundreds of thousands of jobs. <br /><br />Having spent many decades building that late-industrial-civilisation idiocy known as a 'consumer economy', we can't simply say these are non-essential activities. Without them, we won't generate the wealth to build a 'real' economy. Nor can we borrow the money we need , because - guess what? - everyone else has the same problem.<br /><br />Everything comes back to the point made in the Hirsch report, which is that we could have preserved a renewable-powered simulacrum of today's society <i>if</i> we'd started work on it 20 or 30 years before peak oil. <br /><br />We didn't. And now we can't.Half Emptyhttps://www.blogger.com/profile/04589816424420932962noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-31224131627762052162009-11-30T14:10:37.313-08:002009-11-30T14:10:37.313-08:00KLR - thanks, I fixed that PDF link to point to th...KLR - thanks, I fixed that PDF link to point to the HTML version.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-15359263403200944102009-11-30T14:04:40.214-08:002009-11-30T14:04:40.214-08:00Kjmclark - I'll defend my position at greater ...Kjmclark - I'll defend my position at greater length in a follow-up, but for now, of course I agree that we use oil inefficiently, but nonetheless, in the short term, it is essential to the production and delivery of goods and services. If you do the thought experiment of "No oil usage this week under any circumstances", it should be clear that only 1% of the US or so could get to work, ditto the mall, and very little work would get done, and very few goods and services would be delivered.Stuart Stanifordhttps://www.blogger.com/profile/07182839827506265860noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-57126888615947238562009-11-30T13:40:03.726-08:002009-11-30T13:40:03.726-08:00"However, oil is pretty essential to the prod..."However, oil is pretty essential to the production of most goods and services, and just about all of them in the United States which is completely dependent on oil for mobility."<br /><br />Really? We say that a lot in the peak oil blogosphere, mostly by folks who think declining oil extraction will inevitably bring down civilization, but I've never seen anyone make a good case for it. It seems as though much of the oil consumption in the world is for non-productive activity (I don't count long trips to work in SUVs as productive, when a short trip on a bike or bus would serve the same purpose if someone hadn't decided to live so far from work). How much oil is really <i>needed</i>, or even used, to produce a house, a computer, a wireless phone, an insurance policy, etc.? <br /><br />It's a different argument to say that we produce $X in goods and consume Y barrels of oil. We certainly consume the oil, but it doesn't seem like much of it is consumed in the production of other goods and services. It looks like many of the other countries are more efficient in this measure because they don't have so much single-occupant commuting in large personal vehicles.<br /><br />OTOH, how much oil we can buy given our poor gdp/consumption ratio is a terrific point. Unless the Asians continue to let us borrow to pay for oil, the US is going to be in a terrible position to bid for it.<br /><br />On the GDP/VMT ratio, I wonder how much of that can be explained by concentration of wealth. Certainly people tend to travel more as they become wealthier, but that's mostly an increase in flying, which doesn't show up in VMT, which only counts motor vehicles on the roads. (BTW, I found a new study on VMT and the economy while looking for an analysis: http://cascadepolicy.org/pdf/VMT%20102109.pdf. Supposedly the author isn't as political as the organization hosting the pdf.) However, the concentration of wealth in the US has become pretty extreme over the past 15 years or so. People like Bill Gates and Warren Buffet have so much of GDP locked up that they couldn't possibly travel by road enough to cover their share. That might partially explain that 2000 setback, since the wealthy were hit much harder than other Americans by the decline in stock values.<br /><br />Also, I'm sure you're right that the internet is playing a role, but I think that's only a part of the greater use of IT more generally.kjmclarkhttps://www.blogger.com/profile/00490417628052004621noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-70876452781220154432009-11-30T11:43:02.452-08:002009-11-30T11:43:02.452-08:00Minor editorial heads up: you linked to the PDF v...Minor editorial heads up: you linked to the PDF version of your <a href="http://www.theoildrum.com/story/2006/6/11/234833/965" rel="nofollow">Recent VMT and Fuel Economy Trends</a> TOD article. When I attempt to copy the text of the title in the PDF I'm rewarded with "" Sounds like Collosus of the Forbin Project is telling me to eff off!<br /><br />I love this stuff. This morning was mulling over how to diagnose the impact of hybrid sales over the last decade, minor as they may be. People definitely are placing their bets on them, to our detriment; I think post peak it will be time for a major rethink of priorities - perhaps a period of rationing and carpooling while what's left of Detroit gets its act together? Or Smart etc. will change the game for all time with minimal vehicles that are little more than all weather golf carts, crash safety be damned. <br /><br /><a href="http://en.wikipedia.org/wiki/Online_shopping#Trends" rel="nofollow">Wikipedia</a> says 10% of US retail clothing purchases are on the web, and 6% of the total. Conversely to your theory, perhaps consumers backed off from discretionary travel while the economy continued to perk along due to excesses of credit, shoring up sectors of the economy that would ordinarily be impacted due to the public traveling less. <br /><br />Combien de valises avez-vous? Regarding France and wine, agriculture is 2% of French GDP; "beverages" constitute some smallish fraction of <a href="http://www.indexmundi.com/trade/exports/?country=fr" rel="nofollow">French exports.</a> Something similar likely obtains with, oh, Nashville and country music.KLRhttps://www.blogger.com/profile/00691172491186270514noreply@blogger.comtag:blogger.com,1999:blog-5235419263414453422.post-85869841053653678152009-11-30T11:42:29.193-08:002009-11-30T11:42:29.193-08:00The latest EIA STEO projects a 4% decline in oil c...The latest EIA STEO projects a 4% decline in oil consumption in 2009 and the IMF projects (as of Oct) that US GDP (PPP) will be 1.2% lower.<br />(Deflated I guess that would be more like 2.3% or so lower).<br /><br />Working the numbers quickly I get approx 1.8% improved efficiency. Below par for the last 10 years.Datamungerhttps://www.blogger.com/profile/10697373189192242333noreply@blogger.com