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Click to enlarge.
The next chart shows fuel efficiency standards.
Click to enlarge.
Like generals fighting the last war, the government is finally adapting to higher oil prices. It only took them 10 years or so to spot the trend.
August 10, 2013
The Illusion of an Auto Industry "Recovery"
The next chart shows the total vehicle miles traveled per capita.
Click to enlarge.
The typical American is adapting much faster than the government. Big shocker. Here is the question of the day. Now that they are both on the same page, what will their combined efforts do going forward?
August 10, 2013
Calculated Risk: Forecasts: Oil and Gasoline Prices expected to decline
I'm not going to lose any sleep thinking about peak oil tonight. I shall dream of perma-ZIRP instead. It's the gift that keeps on giving!
Source Data:
EIA: Motor Gasoline
St. Louis Fed: Vehicle Miles Traveled
Wikipedia: Corporate Average Fuel Economy (CAFE)
12 comments:
I stayed active on a couple of Society of Automotive Engineers committees for a while after I retired almost 5 years ago. I wasn't specifically involved with fuel efficiency standards, but from my experience with NHTSA, I'm pretty sure that regulations were never in reaction to fuel prices.
NHTSA is deeply concerned with driver/passenger/pedestrian safety, and emissions/air quality considerations. They aren't totally indifferent to cost, but it is at best a secondary consideration the great majority of the time.
Actual people, as your vehicle miles driven chart illustrates are very sensitive to cost, per se, and the condition of their finances.
The big drop during the GR is no surprise. The continued drop during the ersatz recovery is. Unless you stop to consider that the recovery hasn't existed for a pretty damned large chunk of the population.
i had a series of posts on related topics in early 2012. the last on is linked here, and you can back-track through the included links if interested.
http://angrybearblog.com/2012/03/has-america-lost-its-drive-pt-4.html
Cheers!
JzB
Pardon me if you've heard this before, but...
The price of oil is unlikely to fall very far simply because costs have caught up. Even a complete collapse in demand would only result in shortages, and then we really are talking Mad Max.
Shale? Fuggetaboutit.
p.s.: That was in regards to a comment on a prior thread.
Mark,
BTW, what I've been wanting to do chart-wise was plot the change in national median house prices against the (inverted) change in cost of financing those houses adjusted by the change in median income for all years since 2000.
Jazzbumpa,
CAFE Overview - Frequently Asked Questions
The Act was passed in response to the 1973-74 Arab oil embargo. The near-term goal was to double new car fuel economy by model year 1985.
TJandTheBear,
All I can say for sure is that oil was being produced at $11 per barrel in the late 90s. I wouldn't claim to know if the costs have gone up 9-fold since then or not.
1. One of the costs of producing oil is actually the price of oil itself. Oil is needed to move oil.
2. As the price of oil rose due to growing global demand, it became profitable to extract "expensive" oil.
I think we'd need to see shrinking global demand for that to unwind. In the U.S.A., I'd say shrinking is probable at these prices. We might just put a serious dent in China's too for that matter (as seen in the stagnant imports from them during this "recovery").
And when I say stagnant imports from China, keep in mind that much of it is plastic crap. Plastic is made of oil.
Perhaps our long-term plan is to fill our landfills with so much plastic that it will become our oil reserves, ll. Sigh.
Gallows humor.
As for your chart idea, I'm concered that the "median" already has a house. I think we can realistically doom and gloom it up a bit more than that. ;)
Perhaps it should factor in these new "highly compensated" workers of the "recovery". Sigh.
As usual, the quotes imply sarcasm as seen here.
I keep intending to post a chart linking that to housing. Perhaps I'll make that my next post.
"Perhaps our long-term plan is to fill our landfills with so much plastic that it will become our oil reserves": it'll contribute handily to the natural gas you can collect from landfill.
dearieme,
Fantastic! It's a plan then, lol. Sigh.
Mark -
The Act was passed in response to the 1973-74 Arab oil embargo. The near-term goal was to double new car fuel economy by model year 1985.
I still think the price of gasoline was a minor consideration, relative to availability and emission/air quality.
Note the 4 factors from you NHTSA link
(1) Technological feasibility;
(2) Economic practicability;
(3) Effect of other standards on fuel economy; and
(4) Need of the nation to conserve energy
Auto industry has always argued against increasing fuel efficiency requirements on the basis of the first 3
1) We don't know how
2) It drives vehicle cost up
3) Safety requirements drive increased vehicle weight, and that gets in the way.
Cheers!
JzB
Jazzbumpa,
We'll just have to agree to disagree on that. From where I sit, the Act was in direct response to the oil crisis.
Do you think presidents enjoyed having to give dire speeches to the American public?
Gas Lines Evoke Memories Of Oil Crises In The 1970s
Back in the '70s, some gas stations took to posting flags — green if they had gas, yellow if rationing was in effect and red if they were out of gas.
To conserve gas, the maximum speed limit was cut to 55 miles per hour. To cut energy consumption in the broader economy, daylight saving time was introduced year-round at the beginning of 1974, facing criticism from parents whose kids had to go to school before sunrise in the winter months.
When the second crisis hit in 1979-80, President Carter described combating it as the "moral equivalent of war," and many Americans feared that oil shocks would be a recurring nightmare.
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