Will the high price of gas in the U.S. put traffic engineers out of business? Is there a cost per gallon at which our national vehicle-miles traveled (VMT) will drop dramatically? If the cost of a gallon of regular were $10, would we get Level of Service A on the Cross Bronx Expressway, Santa Monica Freeway and Capital Beltway? No, but history shows that gas prices do affect traffic volumes. Today we might have 5% less volume than 2007, which correlates to an almost negligible reduction in congestion. The cost of travel delays due to congestion has almost tripled in less than two years due to gas prices.
The Federal Highway Administration tracks national VMT. The Department of Energy tracks fuel costs. Stantec recently made a 35-year comparison of the two data sets. There are several economic variables in addition to the cost of fuel that influence VMT, but fuel cost is the most significant single factor. Since 1973 VMT has been on a steady rise in the U.S., in spite of occasional minor fluctuations in fuel costs.
Major and dramatic spikes in gas cost do decrease the growth of VMT. VMT dipped as a result of the 1973 oil crisis, the 1980-82 recession, the 1990-92 recession and our present-day condition. The data shows that VMT drops at the beginning of a recession, before economists publicly call the event. In the past, VMT dropped sharply as gas prices crossed the threshold of a previous high, coincident with crossing each “dollar mark.”
The 2007 and ’08 VMT numbers show something new: a parabolic flattening of the VMT curve rather than a dip, resulting in a gentle return of VMT to 2007 levels. The difference is that in 2008 the average American consumer is using personal credit to buy gas, whereas in 1973 gas was largely a cash transaction. Our economy is absorbing the fuel cost crisis into a personal credit load, a perfect storm of public reaction that could lead to an extended recession with high bankruptcy rates.
Americans are predictable. The first kind of travel to get cut in the face of high fuel prices is leisure travel. After years of above-average increases in VMT on I-70 in the Rocky Mountain resort corridor, the trend dramatically reversed in 2008. After hitting an all-time high in 2007, I-70 Memorial Day traffic dropped 10% in 2008, in spite of increases in commercial truck traffic.
It has been said that transportation is not just sensitive to the economy, but “transportation is the economy.” Is it possible that fat-cat oil companies are anticipating a Democratic win in 2008, pumping up the windfall while they still can and causing long-term damage to the economy? If Dems take the White House, they may go after big oil much like the Carter administration did after the 1973 glut.
A VMT decrease may temporarily quell the insidious growth of traffic congestion we have been fighting, but the economic consequences of the congestion we already have has hit a record high because of fuel costs. Any traffic engineer will tell you that the measured benefit-to-cost ratio of ITS and signal timing-type projects has exploded into the stratosphere when you factor in the current cost of a gallon of gas. A new quick-clearance incident management program on I-70 near Denver during the winter months of 2008 estimated a benefit-to-cost ratio of 20 to 1, largely because of the $3-plus cost of fuel used in the calculations.
It is easy to take shots at the oil industry, but our own failure to successfully fund widespread ITS deployment has left us vulnerable to a catapulted cost of congestion. Our nation is running out of gas, figuratively and literally. On a recent drive on a congested urban interstate, I kept noticing the shoulder was peppered with abandoned passenger vehicles. My first thought was that there must be a shortage of police and recovery attention, but on closer inspection I noticed half the vehicles were already tagged. Service patrol drivers are telling us that “run-out-of-gas” incidents are at an all-time high.
All over the country transit ridership is up, but fuel costs for buses are actually pulling the supply side down when we need the service the most. Multi-million-dollar shortfalls for fuel for transit fleets are not at all uncommon, and as a result, transit services are being cut in many cities because of fuel shortfalls. The picture is bleak.
Since 2001, Americans have feared and protected themselves from terrorists. The popular TV series “24” has provided us with frightening visions of imported suitcase nukes in Los Angeles. 2008 may bring a more real and terrifying import even Jack Bauer couldn’t defend us against—a $175 barrel of oil.
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