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American Energy Consumption
July 9, 2008 •
The Cost of Energy blog points us toward a terrific article in the LA Times titled Suburbia’s Not Dead Yet. The piece, written by Joel Kotkin, argues that contrary to conventional wisdom, high gas prices won’t send suburbanites running for the cities. Kotkin takes on the “urban boosters” (a.k.a. suburbia haters) and compares their doom-and-gloom predictions to the 1970s population hawks:
The “out of the suburbs, back to the city” narrative rests more on anecdote than demographic or economic fact. Yes, high gas prices and rising sub-prime mortgage defaults are hurting some suburban communities, particularly newly built ones on the periphery. But the suburbs remain home to a majority of Americans and a larger proportion of U.S. families — and people aren’t leaving those communities in droves to live in cities. Even with economic growth slowing, many suburbs, exurbs and smaller towns, especially those whose economies are tied to energy, are continuing to do better than most cities in terms of job creation and population growth.
The ominous predictions that the end of suburbia is at hand echo those in the 1970s, when there was also a run-up in gasoline prices. Then it was neo-Malthusians such as biologist Paul Ehrlich, the author of “The Population Bomb,” who argued that the idea of suburbia was unsustainable because it eats up so much land and energy. But suburban growth continued as people bought more fuel-efficient cars and companies moved jobs to the periphery, which cut commuting times. Contrary to pundits’ forecasts, during this decade of high energy prices, the country’s urban populations, for only the first time in recent history, actually fell, according to a census analysis by economist Jordan Rappaport at the Federal Reserve Bank of Kansas City.
But today’s gas prices, at more than $4 a gallon, are the highest ever, and the prospects of them significantly dropping any time soon are slight. The conditions for an exodus from suburbia to the cities would seem ideal once again.
Nevertheless, since 2003, when gas prices began their climb, suburban population growth has continued to outstrip that of the central cities, with about 90% of all metropolitan growth occurring in suburban communities, according to the 2000 to 2006 census. And the most recent statistics from the annual American Community Survey, which is conducted by the U.S. Census Bureau, show no sign of a significant shift of the population to urban counties, at least through 2007.
The entire article can be read here.
Kotkin is a presidential fellow in urban futures at Chapman University and executive editor of the website http://www.newgeography.com/. Mark Schill, managing editor of the site, also has a recent post critiquing a Kansas City Star article that made the very argument Kotkin takes apart.
July 8, 2008 •
The New York Times has a story in the Sunday edition about the dreaded $100 fill-up, calling it a “new financial milestone” for some car owners. Clearly prices at the pump are digging into family budgets and energy prices are certainly newsworthy. But this story leads with a profile of Bryan Carisone (a heating and air-conditioning contractor in Raritan, N.J.) who “absolutely loves” the GMC Denali XL vehicle that he bought in June. Still, Mr. Carisone said “it just about killed me” when his first fill-up totaled $109. Surely it shouldn’t have surprised him. Mr. Carisone bought the car in June — the same month the national average for gasoline finally hit $4 a gallon after months of upward hikes. On June 8, CNN Money reported that “The national average for regular unleaded rose 1.7 cents to $4.005, according the daily measure on the AAA’s website.” Though the Times does not tell readers which Denali package Mr. Carisone purchased, it is worth noting that the fuel economy figures given by General Motors indicate that models get between 12 and 14 miles per gallon in the city and between 18 and 20 on the highway. Mr. Carisone clearly wasn’t shopping for a fuel-efficient vehicle — nor should he have to. But he probably shouldn’t be surprised that it now costs him more than $100 to fill up and reporting his shock at this turn of events hardly seems newsworthy.
The Times story also reports on the “acute pain” folks that drive the Chevy Avalanche model and Hummers are feeling:
Members of the Chevy Avalanche Fan Club of North America prize the Avalanche, a large sport utility vehicle, for its versatility, including a rear cab wall that slides forward for a larger pickup bed or backward for more passenger room.
But the Avalanche also has a 31-gallon tank, which would cost $127 to fill at Saturday’s national average price. Even the truck’s most dedicated fans find that galling. David H. Obelcz, who founded the club in 2002 and is still a member of the board, sold his Avalanche because he could not afford gasoline for it.
June 3, 2008 •
Hyundai Motor America announced that Americans have continued to buy its more fuel-efficient vehicles in record numbers. The Korean car maker said it had its “best May ever,” with sales up 6 percent over the May 2007.
“We are very pleased with our results for May and the fact we were able to break the record set in 2007 for the month during a period of record-setting oil prices and a sluggish economy,” said Dave Zuchowski, Hyundai Motor America’s vice president of national sales.
The company’s more fuel-efficient vehicles -- the Accent, Elantra, and Sonata models -- saw increases of 89 percent, 46 percent, and 12 percent, respectively, over last year, according to the company.
According to the Department of Energy, which tracks these things at http://www.fueleconomy.gov/feg/findacar.htm, the top fuel-economy stats for those three Hyundai models are:
- The 2009 model year 4 cylinder, 2.4 Liter, Automatic 5-speed Sonata gets 22 miles per gallon in the city and 32 on the highway.
- The 2008 model year 4 cylinder, 1.6 Liter, Manual 5-speed Accent gets 27 miles per gallon in the city and 32 on the highway. (The automatic model gets 24 miles per gallon in the city and 33 on the highway.)
- The 2008 model year 4 cylinder, 2 Liter, Automatic 4-speed Elantra gets 25 miles per gallon in the city and 33 on the highway.
Compare these figures to the Toyota Prius, which gets a combined 46 miles to the gallon in city and highway driving.
All of this has General Motors thinking. The company lost $3.25 billion in the first quarter of 2008 (including special charges) and is expected to lose more than $2 billion this year just from operations. Now CEO G. Richard Wagoner has announced that the auto maker will launch a new line of compact cars for North America and begin building the Chevrolet Volt plug-in electric car in 2010. GM will also consider selling its image-tarnished Hummer brand of gas-guzzlers (14 miles per gallon in the city and 18 on the highway) and shuttering four plants that produce midsize SUVs, large SUVs, pickup trucks, and medium-duty trucks.
According to Business Week: “GM plans to introduce a new compact car that will be better equipped than today’s compacts, with more amenities and also a 9-mpg boost over today’s 27-mpg Chevrolet Cobalt. An all-new version of GM’s Korean-made Chevy Aveo subcompact is coming, Wagoner said. GM will also build an all-new 1.4-liter turbo engine for its new compact cars.”
Overall, “18 of GM’s next 19 new products for the U.S. will be cars or crossovers, which are smaller SUVs,” according to the Wall Street Journal.
From AFP: “The company is adding third shifts for production of its Chevy Malibu, Chevy Cobalt and Pontiac G6 models at two plants in Michigan and Ohio to respond to growing demand for smaller vehicles.”
From the Detroit Free Press: GM will add third shifts at its assembly plants in Orion Township and Lordstown, Ohio. Orion manufactures the Chevrolet Malibu and the Pontiac G6, and Lordstown, Ohio, builds the Chevrolet Cobalt and the Pontiac G5.
The response from Washington. “It’s a sign that Detroit continues to adapt and evolve and address the change in consumer tastes and attitudes,” said White House spokeswoman Dana Perino, according to the Detroit News. “They’re adapting well and they’ll make these changes and hopefully be able to pull themselves up out of what has been a rough several years.”
May 28, 2008 •
The news media are constantly claiming that Americans are reducing their energy consumption -- and changing their behavior -- in light of rising gasoline prices. With plans to revisit as new articles come out, I thought it would be interesting to keep an eye on the types of evidence being reported and the apparent resulting shifts in behavior.
So to kick things off, a Reuters story on Tuesday (“Americans save energy, but no relief at pump seen”) offers some anecdotal examples from a consumer saying he and his wife now walk and use public transportation to go out to dinner, and a mom who “thinks” more before she hops in the car (a minivan) for drives.
The article also quotes Ford Motor Co. CEO Alan Mulally saying:
We saw a real change in the industry demand for pickup trucks and SUVs in the first two weeks of May.
The story cites predictions from the U.S. Energy Information Agency that U.S. gasoline demand this year will fall 0.6 percent, the first decline since 1991. “The decline is significant after years of increases. But the impact will be modest,” the story notes.
Of course the biggest recent sign of consumer impact was the government report that estimated vehicle miles traveled on all U.S. public roads for March 2008 fell 4.3 percent, compared with travel for the same period a year ago.