U.S. drivers won't cut back on gas

[jpak]

http://money.cnn.com/2005/09/01/Autos/bc.energy.gasoline.demand/index.htm

NEW YORK (Reuters) - U.S. drivers may take baby steps to reduce the amount of gasoline they burn, but long commutes and inefficient vehicles mean consumers could be locked into high fuel demand despite rocketing prices, experts said.

Gasoline prices hit a record $2.68 a gallon on Thursday, according to travel club AAA. But experts said prices would have to go far higher to substantially cut demand.

"It takes just enormous price increases of gasoline to launch demand destruction," said Phil Verleger, an independent oil consultant.

Even though prices have spiked as high as $5 a gallon in some locations, Verleger said, costs over the entire United States would probably have to average between $5 to $10 a gallon to trim gasoline demand by even 5 percent.

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[phantom power]

1. "demand destruction" == "hoovervilles"

These people don't get it, or are afraid to admit it.

[firefox]

2. What a useless piece of work

They ask one guy his opinion like he is it on the subject of gasoline consumption. Current gas prices have a big effect on driving and spending of disposable income. Besides just being superficial, I do not even believe some of the statements this expert makes. A falling standard of living and $3 gas is the only real conservation program the fascists have.

[Boomer]

3. Is that "won't" or "can't" ?

Just like New Orleans residents "won't" evacuate, U.S. car drivers "won't" cut back on driving.

As if you have any alternatives when you live 30, 60, or 90 miles from an urban center that provides employment, but the salary isn't enough to afford the inflated housing prices in that area.

And there is no public-transporation.

And you can't afford a spiffy new hybrid car.

Not everyone drives expensive SUVs. In fact, some of us can't afford to buy anything that costs over a few thousand dollars, which means an ancient car that does not get good gas mileage.

[phantom power]

4. You know the drill...

those people just need to pull themselves up by their own bootstraps and become rich oil barrons.

[dcfirefighter]

5. the solution to so many problems

Urban centers are where the jobs are. It's human nature - density brings business, size brings variety. Suburbs are filled with cookie cutter shopping centers centered around the big-box store of your choice. Cities, where the friction of humanity sparks the trades that create wealth, are "where it's at".

City residents use 1/2 the energy suburban residents do.

No one can afford to live in the city, they have to pay the last guy for the right to use "his" spot on the earth. He paid the guy before him, and him the guy before him. Go back far enough, and it was a guy who stole it from the guy before him at the point of a musket.

In Washington DC, to buy an empty lot, 15' wide, in a marginal neighborhood with the barest of amenities, so your children can go to an extremely poor performing and dangerous public school system, you have to pay $250,000 to the last guy to own it. He didn't do anything to make it worth $250K, and he certainly didn't create the lot out of thin air and hard work, but he has the ability to ask $250,000 for it - because that's what people who want his lot can afford.

To get $250,000 to give this man, most people take out a mortgage, and pay $1500 a month to the bank. Due to low interest rates, and favorable tax laws, our government ensures that land values appreciate, so one day that lot can be sold to the next guy for $300,000.

If, instead of asking roughly $300 a month in property taxes against that lot, the local government asked for $1500 a month, the asking price would have to be reduced accordingly. Those people who could afford his $250,000 asking price (or $1500/mo mortgage + $300/mo tax), couldn't afford it anymore, and he wouldn't find a buyer for $250,000. More likely, he'd find someone who could afford a $300/mo mortgage and $1500/mo tax, and he'd have to set an ask price of $50,000.

Except, and this is important, a portion of the $250,000 'value' is in the theory that one day the buyer will be able to sell it for $300,000. This speculative value is gone, or largely gone. More likely our seller would only get $40,000 for his lot.

Note, taxes at this rate ($1500 * 12 / $40,000 = 45%) can only be charged against the unimproved value of land without disastrous results. Even a 2% property tax on buildings increases the cost of ownership by ~20%.

Now, for the ripple effect.
1st, our buyer is spending his money on local government, and not on some guy's vacation home.
2nd, our buyer is spending money on local government, and not on interest
3rd, our urban land owners no longer have much of a reason to build parking lots (or leave run-down buildings) on valuable property, there's no profit. If the vacant and abandoned building appreciates - it's because of the community, not the owner, and under taxes like this, the community will get the financial benefit, not the absentee owner.
4th, because of the incentive to build, our cities gain more residential, commercial, and industrial building space.
5th, because of the gain tax revenue, taxes against buildings, wages, and sales can be reduced or eliminated.
6th, because of the reduced cost of employment, and the reduced transaction cost of sales, and the reduced cost of buildings, and the reduced cost of accessing land, and the increased availability of work space, employment increases significantly
7th, because of increased density, potential transit ridership increases
8th, capital investments in public infrastructure, such as transit, parks, schools, public safety, etc.; increase the value of properties within the taxing jurisdiction. This increase in property values leads to increased tax revenues, more than paying for the capital expenses.
9th, increased building in urban areas reduces demand pressure in rural areas - leaving farms relatively close to urban centers, allowing for reduced shipping energy for fresh vegetables, meats, etc., and allowing for increased forested & wetland space as pollutant sponges and carbon sinks.
10th, increased resource independence decreases need for expensive military. increased employment, wages and individual independence decreases need for expensive social services.

[dcfirefighter]

6. The politically feasible first step

is a revenue neutral property tax shift such that at least 50% of revenue comes from taxes against land values.

Properties are generally assessed as land value + improvement value = property values.

A tax shifted from a 1.5% annual property tax would probably look something like 0.75% improvement tax and a 4% land tax.

Such a shift, in the places that it has been done, generally reduces the bill for 70% of homeowners. It has also encouraged building.

[Boomer]

7. Shoot me now

Urban centers may be where it's "at", but that's exactly where I DO NOT want to live.

I live in a small town in a largely rural area. I moved here to get away from urban living and to avoid suburbia. But the one significant drawback is that there is NO public transportation and the nearest job is 30 miles away.

If I wanted to earn two to three times what I do now, I could commute 60 or 90 miles away, but that's too high a price to pay. I'd rather settle for a working class lifestyle than spend three hours (or more) of my life parked on a freeway.

Moving everyone into urban centers isn't the only solution to dealing with the oil crisis. Providing more public transportation systems would support rural areas, just as the old railway system did before oil interests dismantled it. It may not be as "cost effective" as living in large cities, but it would provide some quality of life, some variety to the American Dream which some of us consider to be a nightmare instead.

[dcfirefighter]

8. It doesn't have to be a large urban area

it could be a town of 25,000 or less. It does have to be dense, though, and preferably surrounded by forests, parks, and farmland. Density allows for foot travel and public transit.

Urban areas can be 'green' and allow for commerce, specialization, and variety.

Rural areas can be 'green', with largely self-sufficient farmsteads and the like. Rural areas shouldn't be the homes of people who gave up on society but need to commute 90 miles every day to work.

I've found little use for suburban areas, though I have no problem with the pre-1940 'suburbs' - small well appointed homes on compact lots, usually with streetcars or other transit such that a familiy could get by with one car or less.

America needs to end her love affair with the car.

There's no way to make a 4,000 s.f. house 'green', nor is there a way to make a 1/2 lawn 'green'.

I would like people to pay for the natural resources they take and keep from others, be it oil, air, water, or land.

[Boomer]

9. Thanks for the clarification on size

Your description of density actually describes my town pretty well. I live on the edge of the historic district, within walking distance of hte old downtown. And if it came to it, even the shopping mall is in walking distance (although I'm not in shape enough to tackle that trek often).

My neighborhood is old, which means it has lovely wide avenues and sidewalks everywhere. So walking is an option, even if fewer people take advantage of it now as compared to a hundred years ago.

The problem is that the density of business is not equal to the density of population. That may change as oil supplies force a decentralization of industry. As a last resort, I can probably telecommute to my particular line of work.

Meanwhile, I've been trying to persuade my SUV driving co-workers who live in this area to car pool but so far have only gotten luke-warm responses. Very frustrating.

[PaulaFarrell]

10. Well, with some caveats

Not trying to make any statements about you or where you live, but I grew up in a suburb of Dallas. Dallas had 'white flight' in the seventies and the flight has just gotten farther and farther away. I know lots of people living 50-60 miles from Dallas and commuting there who grew up in the city and the suburbs but have chosen to move out to the sticks to get away fro the 'city' (read minorities). NOw they're hurting, I have no sympathy. THey want the jobs the metropolitan area provides, but want to skip paying the taxes and other urban problems. I know this doesn't apply to people who grew up in rural areas, but many of the people driving those 60-90 miles chose to do because they preferred the lifestyle. Just another perspective.

[Delphinus]

12. Good points, Boomer.

I've cut back as much as I can, riding my bike to work and trying to ensure that my trips are for more than one thing. I'm thinking of changing hair dressers because mine is 15 minutes away.

My car is pretty fuel efficient - 22 city, 32 highway. It's not in my budget to purchase a hybrid or anything else for that matter.

I think the guy who wrote the story didn't look far enough.

[happyslug]

11. Time to refer to my paper on the rise of Suburbs.

If you read it you will see various types of suburbs that have different and distinct Characteristics. Now the various types of Suburbs tend to change slowly but you see the evolution from the trolley suburbs of 1900 to todays exurbs. For more see my paper on suburbs:

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=266&topic_id=203