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People should listen to Robert Reich:

Problem is, the nation doesn’t have nearly enough public transportation to handle the new demand. Even more absurdly, right now when it’s needed the most, public transportation across the land is being cut back. This is because transit costs are soaring by the same skyrocketing fuel prices that are forcing people out of their cars, at the same time transit revenues are shrinking because most transit systems depend largely on sales taxes, now dwindling as consumer purchases decline in this recession. A survey of the nation’s public transit agencies released last Friday showed 21 percent of rail operators now cutting back and 19 percent of bus operators.

Obviously, though, we "can't afford" massive new federal investments in transit infrastructure. An indefinite expenditure of $200 billion a year in Iraq, however, is easy as pie. And anyone who suggests spending less on war and more on productive domestic investment is an isolationist. Just keep repeating that.

Comments

Just keep repeating, we need to invest more in our country's infrastructure, including transit.

Posted by Ben | June 4, 2008 4:49 PM

Has Obama said anything about increasing federal funds for public transportation?

Posted by Jayhawk Max | June 4, 2008 5:01 PM

It's not just expenditures there's the lack of state initiative leaving local attempts, such as that of Orlando, twisting in the wind from such as absurdities such as this:
http://www.heraldtribune.com/article/20080511/NEWS/805110326/1661

Posted by Peter Vince | June 4, 2008 5:04 PM

Keep it simple. Lots and lots of buses.

Posted by Drew | June 4, 2008 5:05 PM

Matt

I think your first action should be to get your NIMBY liberal compatriots on board first. Good luck with that.

Posted by JBJB | June 4, 2008 5:08 PM

Actually, anyone who suggests spending less on war and more on productive domestic investment is a Socialist. Remember?

Posted by Angry Sam | June 4, 2008 5:13 PM

MY:
Stop making McMegan's head explode!!!

;-)

Posted by Joe Klein's conscience | June 4, 2008 5:15 PM

we "can't afford" massive new federal investments in transit infrastructure. An indefinite expenditure of $200 billion a year in Iraq, however, is easy as pie.

We're spending $200 billion a year in Iraq precisely so that money will not be available to invest in things like mass transit. Or health care. Or education. Or infrastructure generally.

That's the mission that was accomplished.

Posted by Roddy McCorley | June 4, 2008 5:29 PM

It would be foolish to invest large sums of money in mass transit expansion without clear evidence of a significant and permanent increase in demand. A short-term spike in the use of mass transit in response to the recent rapid increase in gas prices is not evidence of a permanent increase in demand. Demand may obviously fall again in the near future for any number of reasons: a fall in gas prices, an increase in mass transit fares to cover the rise in oil prices, a return to cars as commuters currently experimenting with mass transit realize just how much more comfortable and convenient they are, replacement of current vehicles with more fuel-efficient models, increased adoption of telecommuting, compressed work weeks and other mechanisms to reduce the number of physical commutes, and so on.

Providing extra buses on routes that have seen a recent surge in demand might be a good idea. It's inexpensive and it can easily be undone if demand falls again. But spending lots of money on irreversible transit expansions (e.g., new rail lines) without clear evidence of a sustained need would be a terrible waste of money.

Posted by Mixner | June 4, 2008 5:42 PM

Here in Seattle, they're cutting back on bus service due to fuel costs just as people are driving less due to fuel costs. I am authentically concerned; my life is heavily dependent on public transit. Yesterday, I was seriously discussing with my GF the utility of having a car, which is the first time in my life I've really thought about it. I do not actually want to own a car.

Posted by NBarnes | June 4, 2008 5:46 PM

For all the talk of expanding mass transit, there has been little mention on whether population density and zoning can support it. Urban planning has to be an issue.

Posted by DustPuppyOI | June 4, 2008 5:54 PM

What Roddy McCorley said, a thousand times. He is so spot on.

What baffles me is that 25% hardcore of conservatives out there who have no problem with the cognitive dissonance of their beliefs: on the one hand, they think that liberals hate America; on the other hand they have no problem with $200b being spent on foreigners rather than Americans. (Killing them, bribing them, makes no never mind. ) The Dems want American dollars spent on American needs, the GOP want endless wars, but it's the Dems they believe don't believe in America. Now that I think about it, that goes beyond c.g., which is at least within the parameters of "normal". Those people are just plain delusional.

That's where Roddy McCorley is so insightful: the Bushies knew that they inherited a booming economy and a flourishing surplus, and so they needed a way of ensuring that ordinary Americans (especially "hardworking white Americans" who vote GOP!) wouldn't ask for their fair share of that. Functioning transit systems, decent health care and affordable education might show that government actually works, and free market theocrats hate that possibility and will do anything to kill it.

Posted by seeker6079 | June 4, 2008 6:04 PM

Mixner, the flaw in that argument is that the product has to be available for the demand to manifest itself. No alternative doesn't mean that people don't want the alternative it simply means they aren't picking something that isn't there.

DustpuppyOI is correct in noting that you can't build it just anywhere, that the right conditions for it to work have to be in place. But that limitation is a part of the calculation: `will service mode A and frequency B in urban density C produce a sustainable demand of D based on available comparables and models?'. If the answer is yes then you must consider investing in the system.

My home town is Toronto and I have worked in its Dallas-like sprawling suburbs. The experience of that GTA does show that if the rapid transit service is there people will use it. The subways are packed and the GO (commuter) trains are jammed with riders, even given the inadequate levels of service. It also shows that many politicians and transit bureaucrats are adept at saying "there is no demand" when they have in fact prevented the supply that would validate the demand.

One other point: mass transit design succeeds best when it is integrated and bi-directional. By that I mean don't just build commuter trains that only go In in the morning and Out at night; rail service must be like subway service: back and forth and linked into other transit modes.

Posted by seeker6079 | June 4, 2008 6:17 PM

Mixner, the flaw in that argument is that the product has to be available for the demand to manifest itself.

If the buses and trains running a particular route go from being half empty to standing-room-only over an extended period of time, that's pretty good evidence of a sustained increase in demand.

Posted by Mixner | June 4, 2008 6:24 PM

Ah, the silly glibertarian boy is here, trying to tell us that his gut is the sole arbiter of the nation's transit policies.

Of course, because he's such a silly glibertarian, he'll keep throwing up bullshit deal-breakers, all because the mere thought of someone, somewhere choosing to take a bus over a car gives him abdominal distress.

He's so much better suited to 'yes Megan, no Megan, three bags full Megan'.

Posted by pseudonymous in nc | June 4, 2008 6:44 PM

There's nothing wrong with buses, Mixner. Indeed there is considerable scope to expand their use and the types used. (Massive honking GM buses aren't necessarily the best investment to service suburbs, for example; microbuses would be better.)

Where you err is that your second point doesn't even address rapid transit. Buses go at car speeds over car roads and stop at all car traffic lights and stop signs. They are, by definition, not "rapid". Most of the European urban areas would descend into chaos if they shifted their rail network into a bus-based system. Rail is (in most cases) a key part of an integrated transit system. Why do you think that the El and the NY subway are there, over a hundred years on? Because they work and because they are necessary.

Posted by seeker6079 | June 4, 2008 7:09 PM

It would be foolish to invest large sums of money in mass transit expansion without clear evidence of a significant and permanent increase in demand.

We're seeing significant increases in demand for public transportation now. Doncha ever read a newspaper? And determining whether or not these increases are permanent is obviously impossible. You're really becoming a parody of yourself, Mixner.

Posted by Jasper | June 4, 2008 7:11 PM

There's nothing wrong with buses, Mixner. Indeed there is considerable scope to expand their use and the types used. (Massive honking GM buses aren't necessarily the best investment to service suburbs, for example; microbuses would be better.)

Where you err is that your second point doesn't even address rapid transit. Buses go at car speeds over car roads and stop at all car traffic lights and stop signs. They are, by definition, not "rapid". Most of the European urban areas would descend into chaos if they shifted their rail network into a bus-based system. Rail is (in most cases) a key part of an integrated transit system. Why do you think that the El and the NY subway are there, over a hundred years on? Because they work and because they are necessary.

Posted by seeker6079 | June 4, 2008 7:14 PM

There's nothing wrong with buses, Mixner. Indeed there is considerable scope to expand their use and the types used. (Massive honking GM buses aren't necessarily the best investment to service suburbs, for example; microbuses would be better.)

Where you err is that your second point doesn't even address rapid transit. Buses go at car speeds over car roads and stop at all car traffic lights and stop signs. They are, by definition, not "rapid". Most of the European urban areas would descend into chaos if they shifted their rail network into a bus-based system. Rail is (in most cases) a key part of an integrated transit system. Why do you think that the El and the NY subway are there, over a hundred years on? Because they work and because they are necessary.

Posted by seeker6079 | June 4, 2008 7:17 PM

Out here in Portland (Ore), we don't have a sales tax to pin the transit to. Ridership has been steadily increasing and guess what...so is the fare! So far I haven't heard that much grousing about the 25¢ extra. Still cheaper than a dollar at the pump.

Obviously this is more due to the bus fleet than the light rail (MAX):
http://trimet.org/news/releases/may28_fareincrease.htm

So glad I got outta LA when I did! At least our transit system gets me where I need to go. Like everyone else, I still have a car but I've been considering a scooter or motorcycle as an alternative.

BfD

Posted by bedtime for democracy | June 4, 2008 7:20 PM

Sorry for the multiple posts. I kept getting error messages that my post hadn't gone through.

Posted by seeker6079 | June 4, 2008 7:27 PM

Jasper,

We're seeing significant increases in demand for public transportation now. Doncha ever read a newspaper? And determining whether or not these increases are permanent is obviously impossible.

"Permanent," in this context, obviously doesn't mean "forever and ever," but rather something like "sufficiently entrenched and long-lasting as to justify large new investments." A short-term spike in ridership in response to a recent rapid escalation in gas prices is not evidence of a permanent increase in demand.

Posted by Mixner | June 4, 2008 8:02 PM

Enough already. People, the software, like all software, is screwed.

When you get the error message, your post has posted. If you're worried about it, open another window, go to the comments section, and you will find your post is here.

It would help if Matt would put a notice at the top about the problem and why they can't fix it.

Posted by serial catowner | June 4, 2008 8:07 PM

As for Mixner, what planet does he live on? Somebody, buy that man a newspaper.

Posted by serial catowner | June 4, 2008 8:12 PM

seeker,

There's nothing wrong with buses, Mixner.

I wouldn't say that, but buses generally make much more sense than trains, as I have pointed out many times before on this blog to proponents of large-scale expansion of rail services.

Where you err is that your second point doesn't even address rapid transit. Buses go at car speeds over car roads and stop at all car traffic lights and stop signs. They are, by definition, not "rapid".

Apparently, you've never heard of Bus Rapid Transit. Is that an "err?"

Most of the European urban areas would descend into chaos if they shifted their rail network into a bus-based system.

I doubt that, but I'm not sure what you think it has to do with proposals to expand mass transit in the United States, anyway.

Why do you think that the El and the NY subway are there, over a hundred years on?

Because they serve very densely populated areas that would be difficult to serve with buses and private motor vehicles alone, and because their construction is a sunk cost that does not impose a burden on today's taxpayers or riders. The fact that a transportation system makes sense in New York or Chicago doesn't mean it would make sense in other cities. Why do you think Houston, Phoenix, Las Vegas, Miami, Atlanta, Seattle, Albuqerque, Dallas etc. don't have subways and aren't likely to get them?

Posted by Mixner | June 4, 2008 8:19 PM

Why do you think Houston, Phoenix, Las Vegas, Miami, Atlanta, Seattle, Albuqerque, Dallas etc. don't have subways and aren't likely to get them?

Ummm...because while these cities have been growing exponentially during the ascendancy of the automobile there has been no planning for an entirely predictable era of expensive oil because the costs of doing such planning were politically expedient to foist into the future (which, by the way, is now)?

In the case of Miami, the elevated train does not go to the airport or to Miami Beach because of past opposition of the taxi lobby to plans extend it to these extremely popular destinations.

For some reason, a service that does not take people where they want to go has not proven to be wildly popular, though the smaller metro mover that serves the immediate downtown area has proven to be a success and has been expanded several times.

I'd be willing to bet that a metrorail line between Ft. Lauderdale and downtown Miami would run at capacity as soon as it opened, though it would be much more expensive to build it now than it would have been 25 years ago when the original line was first built.

Posted by DMonteith | June 4, 2008 9:13 PM

Ummm...because while these cities have been growing exponentially during the ascendancy of the automobile there has been no planning for an entirely predictable era of expensive oil because the costs of doing such planning were politically expedient to foist into the future (which, by the way, is now)?

No, it's because their population densities, like the population densities of all other new developments of the past half-century or more, are far too low to make subways remotely feasible practically or economically.

I'd be willing to bet that a metrorail line between Ft. Lauderdale and downtown Miami would run at capacity as soon as it opened

Why? And why would a metrorail line make more sense on that route than bus service?

Posted by Mixner | June 4, 2008 10:03 PM

A short-term spike in ridership in response to a recent rapid escalation in gas prices is not evidence of a permanent increase in demand.

Shorter Mixner: In order to satisfy my personal hatred of public transit, I demand that any investment be postponed until I say so, in the hope that those considering a change in their routine are dissuaded by the lack of investment.

And that really is the mentality: he's the kind of stick-up-the-ass ideologue who'd stop watering seedlings out of principle because he didn't think them capable of flowering, then display the shrivelled stalks two weeks later as proof of his wisdom.

What a silly glibertarian boy he is.

Posted by pseudonymous in nc | June 4, 2008 10:21 PM

No, it's because their population densities, like the population densities of all other new developments of the past half-century or more, are far too low...

So which came first? The low densities or the assumption of indefinitely cheap oil? The long term feasibility planning underlying these development patterns is predicated on erstwhile politically and economically convenient and obviously faulty assumptions that are no longer ignorable. The interest on the money saved then is due now in the form of more expensive mass transit development than would otherwise have been the case. Putting off investment in mass transit infrastructure just compounds this cost.

Now, I'm sympathetic to arguments that investing in transportation infrastructure is just throwing good money after bad in places like Las Vegas that have numerous other long term viability issues (i.e. millions of people living in the middle of a vast desert), but I get the impression that you're coming from more of the "this will all blow over when oil goes back down below $60/barrel" school of skepticism. All I can say in response is good luck with that, but I'm not particularly interested in going down with a ship captained by fools of this stripe.

Why? And why would a metrorail line make more sense on that route than bus service?

Have you ever been to South Florida? It's considerably more densely developed than the other cities on your list due to the exigencies of draining a gigantic swamp before new land can be developed. A Bogota style express bus service would be cool with me but given the high cost of real estate in So. FL I think that the increase in speed, capacity, reliability and efficiency that a rail line provides over buses would probably pay off in this case. I am only guessing about this, of course, so data pointing to other conclusions could easily convince me to change my mind.

Posted by DMonteith | June 4, 2008 11:05 PM

Also, the bus vs. rail issue is a false choice. There should be simultaneous development of each where appropriate. Given the longer lead times and higher costs of rail, mass transit solutions will probably be front loaded with busing options.

Posted by DMonteith | June 4, 2008 11:15 PM

DMonteith,

So which came first? The low densities or the assumption of indefinitely cheap oil?

I don't think the population density of any American city is based on assumptions about future prices of oil. It's not like the builders of Manhattan said to themselves, "Gee, we'd better build lots of high-rise, high-density housing because oil's going to get really expensive in the future." The fundamental reason why population densities are low in almost all newer American cities and suburbs is that land is cheap and plentiful, people like big homes, and motor vehicles provide a convenient, comfortable and flexible way of getting around.

Now, I'm sympathetic to arguments that investing in transportation infrastructure is just throwing good money after bad in places like Las Vegas that have numerous other long term viability issues (i.e. millions of people living in the middle of a vast desert), but I get the impression that you're coming from more of the "this will all blow over when oil goes back down below $60/barrel" school of skepticism.

No, I'm coming at it from the "investing large sums of money in inflexible mass transit infrastructure in low-density cities like Las Vegas makes no economic or practical sense" school of skepticism. To the extent that mass transit is needed in such cities, bus services--which can share infrastructure with private motor vehicles (roads and highways), have low startup costs, and are scalable and flexible to meet variations in demand--make far more sense than rail services (although I do think the monorail running along the LV strip is probably a good idea).

Apparently, you think $4/gallon gasoline constitutes some kind of unassailable argument for high population densities and mass transit. I think you're going to be disappointed. Assuming gas prices stay at that level or rise further, the most likely response of the market will be an increased and accelerated demand for more fuel-efficient vehicles. Hybrid vehicles already offer significant fuel savings over vehicles with conventional gasoline engines, and plug-in hybrids (PHEV) and, eventually, all-electric vehicles will save even more. Within a decade, American car buyers will probably be able to buy a PHEV sedan that gets 100mpg, and a PHEV full-size SUV that gets 50 mpg.

Posted by Mixner | June 4, 2008 11:56 PM

Within a decade, American car buyers will probably be able to buy a PHEV sedan that gets 100mpg, and a PHEV full-size SUV that gets 50 mpg.

And 18-wheelers will run on the distilled farts of silly glibertarian boys with car fetishes?

Posted by pseudonymous in nc | June 5, 2008 12:32 AM

The quote is sound, but of course this is something that many others have said. On the broader topic of listening to Reich... didn't he spend most of the '80s and '90s advocating the sort of Franco-Japanese dirigisme (a la MITI) that proved to be such a colossal failure (I seem to remember that from somewhere)? I'm not sure what to make of Reich- he seems to vacillate between astute observation and truly wretched policy recommendations. I suppose I'll have to withhold final judgment until after I've read Supercapitalism...

Posted by K. Larson | June 5, 2008 12:37 AM

It's not like the builders of Manhattan said to themselves, "Gee, we'd better build lots of high-rise, high-density housing because oil's going to get really expensive in the future."

Since oil wasn't used for transportation at the time that Manhattan became densely developed, I'd be highly surprised if evidence surfaced that considerations of future oil prices were factored into its development, so on this at least, we agree. It is, however, interesting to note the differences in land use between cities that grew before the rise of the internal combustion engine and those that came after. I am puzzled as to why you resist gleaning lessons from the past that might shed light on viable land use patterns given drastically reduced reliance on automobiles. Oh, that's right, technology is going to preserve our non-negotiable American lifestyle!

Hybrid vehicles already offer significant fuel savings over vehicles with conventional gasoline engines, and plug-in hybrids (PHEV) and, eventually, all-electric vehicles will save even more. Within a decade, American car buyers will probably be able to buy a PHEV sedan that gets 100mpg, and a PHEV full-size SUV that gets 50 mpg.

First of all, you should look up Jevon's Paradox. Higher efficiencies actually stimulate demand, so efficiency gains are likely to have little impact on oil depletion rates. Secondly, we could be looking at anywhere from 4 to 10 percent annual declines in oil production within the next 10 years. That's a whole lot of efficiency gain, year in and year out, required just to maintain the status quo. Also, the efficiency gains you posit are relatively low hanging fruit. Further improvements from there will become commensurately harder. Oh, and the current automotive fleet turnover rate for the US is slow enough that there will be a considerable lag between the introduction of these new efficiencies and any appreciable impact on consumption.

So I think that $4/gallon gasoline is just the beginning of an argument for high population densities and mass transit. This argument becomes "unassailable" as we pass $10, $15 and $20/gallon gasoline.

My final point comes down to a calculation of expected value. If the chance of a worst case oil depletion scenario is non-zero and you multiply it by the costs of doing some infrastructure investments that will ameliorate its impact then you could be looking at potentially very valuable investment. But if everything turns out hunky-dory on the energy supply front, then you still have this kick-ass diversity of infrastructure, not to mention the option of reading the paper while you commute rather than staring at the Bush/Cheney bumper stickers on the Hummer in front of you. Where's the downside here?

Posted by DMonteith | June 5, 2008 1:18 AM

DMonteith,

First of all, you should look up Jevon's Paradox. Higher efficiencies actually stimulate demand, so efficiency gains are likely to have little impact on oil depletion rates.

I didn't say anything about the impact of efficiency gains on oil depletion rates. I said the likely response to sustained high gasoline prices would be a faster and broader switch to more fuel-efficient vehicles. Switching from a car that gets 30 mpg to a car that gets 100 mpg effectively cuts the price of gas by two-thirds. $4/gallon gas effectively becomes $1.30/gallon gas. In real terms, that would be the cheapest gas ever. Even a much more modest increase in vehicle fuel efficiency would reduce the effective real price of gas substantially.

But we don't even need to consider increases in fuel efficiency from new technology to demonstrate the implausibility of your prediction. We only need to look at what happened in the past. In the 1970s, gas prices increased dramatically. The real cost of gas around 1980 was about the same as it is now. What did Americans do in response to this massive increase in the cost of running a car? Did they drive less? No. Did they switch to mass transit? No. Did they trade their big homes for smaller ones? No. Did they petition governments and developers to make massive investments in mass transit and high-density housing and "walkable communities?" No. What they did, mainly, was to switch to smaller, more fuel-efficient cars. And that was without the benefit of new technologies like PHEVs. And as the real price of gas declined again, cars got bigger again.

And yes, turning over the entire U.S. private motor vehicle fleet to new-tech fuel-efficient models will take a long time. So initially, if gas prices remain high, people will probably simply trade down to smaller conventional cars, just like they did in the 70s. In fact, we see this happening already. SUV sales are down substantially, and sales of smaller, more fuel-efficient models are up substantially. People love the comfort, convenience and flexibility of getting around by car. People love their big, comfortable homes. People don't like using mass transit.

So I think that $4/gallon gasoline is just the beginning of an argument for high population densities and mass transit. This argument becomes "unassailable" as we pass $10, $15 and $20/gallon gasoline.

Do let me know when gas gets to $20/gallon (measured in current, 2008 dollars). I won't be holding my breath. Your whole argument rests on wildly implausible, chicken little predictions that have no basis in fact or historical experience.

Posted by Mixner | June 5, 2008 1:57 AM

My final point comes down to a calculation of expected value. If the chance of a worst case oil depletion scenario is non-zero and you multiply it by the costs of doing some infrastructure investments that will ameliorate its impact then you could be looking at potentially very valuable investment. But if everything turns out hunky-dory on the energy supply front, then you still have this kick-ass diversity of infrastructure, not to mention the option of reading the paper while you commute rather than staring at the Bush/Cheney bumper stickers on the Hummer in front of you. Where's the downside here?

The downside, obviously, is wasting large sums of money on hugely expensive mass transit projects that few people use and that are wildly cost-INeffective. The downside is taking limited resources away from public services for which there is a genuine need to fund boondoggle rail systems that produce only a small benefit for a small number of people.

Posted by Mixner | June 5, 2008 2:09 AM

"Permanent," in this context, obviously doesn't mean "forever and ever," but rather something like "sufficiently entrenched and long-lasting as to justify large new investments." A short-term spike in ridership in response to a recent rapid escalation in gas prices is not evidence of a permanent increase in demand.

Posted by Mixner | June 4, 2008 8:02 PM"

How do you measure demand for a system that doesn't exist yet?

In Baltimore, city leaders have long been afraid of asking residents to suffer the pains of building a subway/rail system now to reap the gains later, so what subway lines there are are located in small, random areas of the city that don't actually suit people's needs. People would likely take a rail system from Charles Village, Mount Vernon, Penn Station, etc. into the Inner Harbor (and would likely lead to a decrease in drunk driving), but such a system does not exist. What bus system there is is poorly run and unreliable (the buses often don't run on time because of traffic).

Posted by Reality Man | June 5, 2008 3:12 AM

"But we don't even need to consider increases in fuel efficiency from new technology to demonstrate the implausibility of your prediction. We only need to look at what happened in the past. In the 1970s, gas prices increased dramatically. The real cost of gas around 1980 was about the same as it is now. What did Americans do in response to this massive increase in the cost of running a car? Did they drive less? No. Did they switch to mass transit? No. Did they trade their big homes for smaller ones? No. Did they petition governments and developers to make massive investments in mass transit and high-density housing and "walkable communities?" No. What they did, mainly, was to switch to smaller, more fuel-efficient cars. And that was without the benefit of new technologies like PHEVs. And as the real price of gas declined again, cars got bigger again."

Apples and oranges. India, China, etc. are demanding more and more oil. In 1980, the "Kaifang" era was only starting in China. Today, China's industrialization is a lot more robust and consumes much oil. Unless large Asian economies decide they don't want more growth, any decreases in gas prices due to American policy changes or consumption changes will likely be minimal.

Cities and their residents react to relative incentives. When gas was cheap and land use laws made low-density urban sprawl easier, you get cities like Dallas, Tallahassee, etc. You change the incentives, you thus change consumption patterns. If a new subway stop is built near your house and goes places you need to go, you are going to use the subway. If it goes nowhere, then you won't use it. If it doesn't exist, you'll drive or take a bus. Add in the fact that taking light rail / subways is often cheaper than driving anyway and you can see people will use such a system as long as it is well-designed. The fact that some roads or bridges to nowhere don't get used doesn't mean we should stop building roads or bridges. Just because some subway lines haven't made sense doesn't mean we shouldn't build more subway lines.

Posted by Reality Man | June 5, 2008 3:21 AM

Do let me know when gas gets to $20/gallon...

Fortunately for me you've already answered your own question:

We only need to look at what happened in the past.

Well, Mr. History Man, gas prices were $1/gallon in 1998 and there's no reason to think that they couldn't be $16 in 2018 (4x increase every 10 years). Just think, then I'll finally be able to buy a PHEV that is three to four times more efficient than 20 year old models to ease the pain of gas prices that are 16 (maybe an inflation adjusted 8x) times higher! Hurrah!

Long story short: past performance is no guarantee of future returns, and I can cherry pick my historical references just as well as you.

Your whole argument rests on wildly implausible, chicken little predictions that have no basis in fact...

Rather than list for you the facts that I have at my disposal regarding oil production, why don't you tell me what you think I need to know about it and we can move forward from there. I'm not really interested in your version of remedial Econ 101; tell me something I don't know about tar sands, non-opec decline rates, energy return on energy invested, Fischer-Tropsch, or what have you.

Bring it on.

Posted by DMonteith | June 5, 2008 3:48 AM

And anyone who suggests spending less on war and more on productive domestic investment is an isolationist. Just keep repeating that.

S/b:

And anyone who suggests spending less on war and more on productive domestic investment is a Nazi. Just keep repeating that.

Posted by Alex | June 5, 2008 6:26 AM

Mixner poo-poos the idea that gas prices will continue to rise while also envisioning a scenario where sprawl, traffic, and current development patterns with simply continue to expand indefinitely.

Posted by Tyro | June 5, 2008 8:44 AM

In fairness to Mixner's point, rail public transit and even BRT are investments for the very long term. If you go to the New York City Transit Museum, there's a section on how the original system was built and the number of workers who died putting the tunnel underneath the East River. That's not how we build anymore, and for good reason; but it means expanding a fixed transit system is considerably more costly than it was back when the NYC subway was originally built -- just look at all the trouble they've had getting the 2nd Ave. Subway project going, and it's not like there isn't demonstrated demand on the Lexington Avenue line.

One potential case study may be Copenhagen, whose Metro is new and gorgeous. I personally cannot tell you how that got funded, let alone built in six years.

But back in the US, a light-rail project started today might well not be operational until 2015 or 2020 or even 2030, depending on the technology involved, any changes of support, the environmental impact statements, right-of-way issues, and so on. Which is not to say it shouldn't be done, but that we would need either significant changes in land-use patterns or significant changes in technology for mass transit to remain attractive if oil prices fall again (at which point it could conceivably be cheaper to drive than it was five years ago, given advances in hybrid technology and rising CAFE standards).

In the meantime, however, increasing bus schedules is cheaper, and at least takes a shot at serving the first-ring suburbs, where new demand for transit is probably rising most rapidly.

Posted by Jessica | June 5, 2008 10:50 AM

We're near the point where the US can go one of two ways, and the choices have never been plainer.

Public investment can support a boom in renewable energy, transportation, housing, healthcare, and education, that would dwarf any previous expansion in our history.

Or, we could choose Mixner's route of continued descent towards third-world status, with declining lifespans, collapsing financial 'institutions', increased foreign ownership of our natural monopolies like the provision of electric power to our homes, and the final looting of the American people by the combination of high fuel prices and no alternate means of transportation.

Tough choice, huh?

In spite of all the crap you've read about how America invented this or led the way in that, we didn't do that in the past and we don't need to do that now. The entire world is putting solutions into action and for most of what we want to do we can just choose solutions off the shelf.

That said, I can guarantee you will be 10% happier if you learn to ride a bike, learn to use public transit, and choose to live where you have both choices when you go to work. Stuff you can do without waiting for everyone else to make up their minds.

Posted by serial catowner | June 5, 2008 12:09 PM

Demanding absolute certainty about the return before making an investment in a project is often foolish, because such certainty is often difficult or impossible to achieve in a sufficiently timely fashion. And precisely because it can take quite a while to get a new public transit system or route operational, waiting for absolute certainty about the return can lead to large opportunity costs associated with that delay.

Fortunately, a lot of studying and planning has already been done for various transit projects that were calculated to be good ideas even at the lower energy prices of the recent past. Although many of these projects have been shelved or at least delayed due to a lack of necessary public funding, that is fundamentally a political issue. So, if higher energy prices change the political landscape, many of these projects could quickly be started/accelerated.

As a final thought, I agree bus rapid transit should (and likely will) be an important component in rapid transit planning as we go forward. And so will new light rail systems and the expansion of existing light rail systems. As many have noted, these are complementary, not competitive, technologies, so there is no reason to become an advocate of one versus the other.

Posted by DTM | June 5, 2008 1:27 PM

DMonteith says:
So I think that $4/gallon gasoline is just the beginning of an argument for high population densities and mass transit. This argument becomes "unassailable" as we pass $10, $15 and $20/gallon gasoline.

That assumes that we need to stay with gasoline. Let's say that over the next 15 years, gasoline increases in price from $4/gallon to $20/gallon. At what point do vehicles based on electric batteries or hydrogen become feasible on cost? And what kind of technological advancements will we see for non-oil automobile engines?

Gas prices rising to $20/gallon are only significant to mass-transit/population density decisions if our transportation costs are based on gas. But if we are in electric cars whose electricity costs are equivalent to $6/gallon, then is $6/gallon high enough for people to be willing to use mass transit and give up suburban sprawl?

I'm not saying the answer is no, but I don't think it's as obvious as: "Gas is being depleted, therefore gas prices go up, therefore we inevitably will switch to mass transit."

Posted by Joe Hill | June 5, 2008 1:33 PM

DMonteith says:
So I think that $4/gallon gasoline is just the beginning of an argument for high population densities and mass transit. This argument becomes "unassailable" as we pass $10, $15 and $20/gallon gasoline.

That assumes that we need to stay with gasoline. Let's say that over the next 15 years, gasoline increases in price from $4/gallon to $20/gallon. At what point do vehicles based on electric batteries or hydrogen become feasible on cost? And what kind of technological advancements will we see for non-oil automobile engines?

Gas prices rising to $20/gallon are only significant to mass-transit/population density decisions if our transportation costs are based on gas. But if we are in electric cars whose electricity costs are equivalent to $6/gallon, then is $6/gallon high enough for people to be willing to use mass transit and give up suburban sprawl?

I'm not saying the answer is no, but I don't think it's as obvious as: "Gas is being depleted, therefore gas prices go up, therefore we inevitably will switch to mass transit."

Posted by Joe Hill | June 5, 2008 1:35 PM

DMonteith,

You are just inventing numbers out of thin air. Do show me these oil industry analysts who are predicting $16/gallon gas in 2018 (adjusted for inflation, of course). The fact is, even if gas prices remain high, or rise even further, the claim that this would cause Americans to abandon their cars for mass transit or abandon their big homes and sprawling suburbs for dense housing and "walkable communities" has no basis in fact or historical experience. We've been through rapid increases in gas prices before, and the response, as I have explained, was a shift to more fuel-efficient vehicles, not a shift to mass transit and denser development. In fact, during the decade of the 1970s, when gas prices doubled, the average size of new homes increased, and sprawling new low-density suburbs boomed.

And by the way, the price of crude oil has already fallen by 10% from its peak last month, which already contradicts your prediction that the price of oil is destined to rise indefinitely into the future.

Posted by Mixner | June 5, 2008 1:45 PM

That assumes that we need to stay with gasoline. Let's say that over the next 15 years, gasoline increases in price from $4/gallon to $20/gallon. At what point do vehicles based on electric batteries or hydrogen become feasible on cost?

Competitive mass-market fully-electric vehicles are still many years away. But hybrids are already feasible based on cost. Even at $3/gallon for gasoline, the additional cost of a Toyota Prius compared with a conventional gasoline car of comparable size will typically be recovered in fuel savings within a few years, and beyond that it becomes cheaper than a conventional vehicle. At $4 gallon, the payback is even faster. And plug-in hybrids will likely double or triple these savings. It is already possible to buy a plug-in Prius that gets more than 100 miles per gallon, double the fuel efficiency of the ordinary Prius, and about 4 times as fuel-efficient as a comparable vehicle with a conventional gasoline engine. Ford, GM, Toyota, and other carmakers are all planning to offer production model plug-in hybrids within the next few years.

Posted by Mixner | June 5, 2008 2:04 PM

DTM,

Demanding absolute certainty about the return before making an investment in a project is often foolish,

It's a good thing no one is demanding "absolute certainty," then, isn't it? The problem with most new rail project proposals is that they don't even meet a standard of "likely to be cost-effective." Mostly, they would be a huge waste of money. Actual costs of such projects almost always exceed projected costs, and actual ridership is almost always lower than projected ridership. Light-rail systems can substitute for only a tiny fraction of car or bus trips, at much higher cost per passenger-mile.

Posted by Mixner | June 5, 2008 2:16 PM

Joe Hill,

The problem is that the prices for other forms of energy to supply cars besides gasoline are not going to be unaffected by rising prices for petroleum-based fuels. Indeed, large numbers of people switching the energy supply for their cars to these other sources would itself likely have an affect on the prices for these alternatives.

And there will likely be some side-constraints as well. For example, I believe about 60% of the electricity for U.S. utilities comes from coal. The good news is that there is a lot of coal in the United States. The bad news is that burning coal can be pretty bad for the environment. Now, you can compensate with various technologies, and people are working hard on the technology to make coal cleaner and cleaner. But all that makes using coal more expensive. And of course the reason coal has such a large market share is that it is cheap. So we may also add new electricity capacity in other forms in order to accomodate things like plugin cars, but that will also mean more expensive electricity.

So, in the end, undoubtedly the amount of cars switching to alternatives to petroleum-based fuels will be a function in part of gasoline prices. But the resulting energy costs for those cars may still end up well higher than they were before the runup in gasoline prices. And that may be true even assuming efficiency increases (although obviously MPG becomes a misleading efficiency measure once you start talking about plugins, hydrogen-fueled cars, and so on--again, at that point you have to start measuring efficiency in terms of the use and cost of these alternative sources).

By the way, here is a chart of real gasoline prices:

http://inflationdata.com/inflation/images/charts/Oil/Gasoline_inflation_chart.htm

This is already outdated, because average gasoline prices are now higher than at the end of that chart. But a few obvious points can be made in relation to the prior spike in the late-70s/early-80s. First, our current spike has now gone past that prior spike in real terms. Second, that also represents a larger percentage increase in real terms from the most recent lows, because gasoline prices where higher in real terms back in the early 1970s than they were in the late 1990s. Finally, we now know that the prior spike was transient. We don't know that to be the case about the current spike, and indeed we don't know if it has reached its peak.

So, it could be the case that the current spike will merely be analogous to the earlier spike (although already it is a bit worse), but it may well follow a different, and much more serious, track. And if the latter happens, it will be unlikely anything we have seen before in the entire history of mass-market automobiles in the United States.

Which is not to say cars will disappear. But I think it is reasonable to assume that sustained real gasoline prices at this level or higher (or indeed even a bit lower), will continue cause considerable switching of passenger-miles to alternatives.

Posted by DTM | June 5, 2008 2:36 PM

Mixner,

Well, I have asked you before for verifiable facts and studies to support your claims, and you have never provided them. So, until you do, I am going to assume you are just making stuff up.

Posted by DTM | June 5, 2008 2:50 PM

DTM,

Well, I have asked you before for verifiable facts and studies to support your claims

Which claims do you dispute? Identify them clearly.

Posted by Mixner | June 5, 2008 3:09 PM

DTM,

So, in the end, undoubtedly the amount of cars switching to alternatives to petroleum-based fuels will be a function in part of gasoline prices. But the resulting energy costs for those cars may still end up well higher than they were before the runup in gasoline prices.

Extremely unlikely. Even near-term alternatives to conventional gasoline vehicles (early-generation hybrids and plug-in hybrids) provide huge savings in energy costs. As I said, a 100 mpg plug-in Prius is about 4 times as fuel-efficient as a conventional vehicle of comparable size and power. As many analysts have noted, the all-electric range of even first-generation production PHEVs will be greater than the length of the average daily commute. This means that such vehicles could be used for commuting without ever requiring a drop of gasoline. Their energy could come entirely from the electrical grid. Under no remotely realistic scenario will residential electricity cost more than the energy equivalent from retail gasoline. The prototype PHEV Ford Escape, for example, can travel as far on $1.04 of residential electricity as on a gallon of gas. $1.04 is significantly less than the cheapest ever price of a gallon of gasoline in the United states.

In fact, the mass use of PHEV vehicles could even have the effect of lowering the average unit cost of residential electricity. By taking advantage of unused capacity at night, they would increase the return on capital for electricity infrastructure.

Posted by Mixner | June 5, 2008 3:36 PM

DTM,

But I think it is reasonable to assume that sustained real gasoline prices at this level or higher (or indeed even a bit lower), will continue cause considerable switching of passenger-miles to alternatives.

Gasoline prices increased almost continuously between the early 1970s and the early 1980s, ultimately doubling over that period. At the same time, the passenger-mile market share of mass transit fell significantly, from 3.63% in 1970 to 2.82% in 1980 (it has continued to decline since). Your assumption is contradicted by historical experience.

In fact, mass transit market share has been in decline for more than a century. This decline has continued throughout both increases and decreases in gas prices, indicating that other factors have a far greater influence on the use of transit vs. private motor vehicles than the price of gas.

Posted by Mixner | June 5, 2008 4:00 PM

Mixner,

Well, how about you back up all of the claims in the following passage:

"The problem with most new rail project proposals is that they don't even meet a standard of 'likely to be cost-effective.' Mostly, they would be a huge waste of money. Actual costs of such projects almost always exceed projected costs, and actual ridership is almost always lower than projected ridership. Light-rail systems can substitute for only a tiny fraction of car or bus trips, at much higher cost per passenger-mile."

And assuming from the context you meant the retail price of gasoline from before the recent runup (otherwise your point would be inapposite), then also this:

"Under no remotely realistic scenario will residential electricity cost more than the energy equivalent from retail gasoline [before the recent runup]."

By the way, for what it is worth, I think if real gasoline prices followed the same track as they did during the previous spike, there probably wouldn't be a lot of long-term switching behavior. So to that extent I agree that IF the current spike is analogous to the prior spike, then there is little reason to expect a lot of switching.

As I noted, though, real gasoline prices are already a bit off that track--specifically, they have continued to rise more than they rose before, both in absolute and relative terms. And as yet, they haven't turned around and headed back to a long term downward trend, which is what happened with the prior spike. So whether or not that prior occasion is actually analogous remains to be seen, and so far it has not been.

Posted by DTM | June 5, 2008 4:18 PM

DTM,

Well, how about you back up all of the claims in the following passage:

Data on cost overruns in U.S. rail projects may be found here: www.guetzloe.com/11_trend.pdf

Data showing that projected ridership exceeds actual ridership is presented in the U.S. Department of Transportation report Urban Rail Transit Projects: Forecast Versus Actual Ridership and Cost. The report is not available on the web.

Posted by Mixner | June 5, 2008 5:44 PM

DTM,

And assuming from the context you meant the retail price of gasoline from before the recent runup (otherwise your point would be inapposite), then also this:

I am not sure how you expect me to prove a negative. As the example I gave shows, the energy cost of retail gasoline is approximately four times the energy cost of residential electricity. The basic reasons for this are not hard to understand: huge municipal power stations have enormous efficiencies of scale compared to small private gasoline engines; the wholesale price of bulk oil supplies to power companies are far lower than the retail costs of refined gasoline to private individuals; and coal is cheaper than oil. If you think you can find even a single energy analyst who believes it is even remotely plausible that the price of energy from the electrical grid will ever exceed the price of energy generated from retail gasoline in a car engine, please do so.

Posted by Mixner | June 5, 2008 6:02 PM

DTM,

As I noted, though, real gasoline prices are already a bit off that track--specifically, they have continued to rise more than they rose before, both in absolute and relative terms. And as yet, they haven't turned around and headed back to a long term downward trend, which is what happened with the prior spike.

You're not listening. Mass transit continued to lose market share even while gas prices were rising. This happened not just during the 1970s, but also during the more recent rise in prices starting (according to your chart) around 2002. As I said, the fact that mass transit has lost market share through both rising and falling gas prices indicates that other factors play a more important role than gas prices in determining whether people use cars or mass transit to get around.

Posted by Mixner | June 5, 2008 6:43 PM

The tremendous amount of energy and materials required to replace the existing suburban housing with new denser urban housing is likely to swamp the energy saving shorter commutes would provide.

Not to mention one of the largest opponents of increased urban density are the politically connected current urban residents.

Mayor White's L.A. moment

Houston Mayor Bill White is capriciously manipulating local governmental power to sidetrack development of a condominium project (nicknamed the "Ashby high-rise") in a neighborhood where he raises a substantial political campaign funds.

Posted by TJIT | June 5, 2008 10:17 PM

You are just inventing numbers out of thin air.

So says the man who so recently said this:

Switching from a car that gets 30 mpg to a car that gets 100 mpg effectively cuts the price of gas by two-thirds. $4/gallon gas effectively becomes $1.30/gallon gas.

Of course I was making shit up! I was doing it as an ironic demonstration of the rhetorical gambit that you were employing. Ya know, argumentum ad absurdum. Is your masters degree in the bleeding obvious?

My $16 is a linear extrapolation of price trends over the past 10 years. Your $4 prediction presumes that supply will meet demand at roughly the current equilibrium price point over the next ten years. Neither assumption is a realistic approximation of how things are likely to play out.

However, here are some things that lead me to believe that I'm more likely to be right than you: oil discovery trends; rig capacity; the effects of enhanced recovery techniques (horizontal drilling, water and co2 injection, steam cracking, etc.) that increase production and push the shape of lifetime oil field production curves to the left but also steepen the slope of the decline side; (...stop me if I'm getting ahead of you...) lead time and scalability issues associated with alternatives (including tar sands), etc.

I do acknowledge that there is a great deal of room for disagreement stemming from ambiguities within each of the above listed considerations and the interactions between so many complex moving parts. I am absolutely confident, however, that anyone who claims that my position is "wildly implausible" is either a shill or just doesn't know much of anything about the issue. If you would like to learn enough to credibly argue with me I'd be happy to provide you with some links that would get you started.

And by the way, the price of crude oil has already fallen by 10% from its peak last month, which already contradicts your prediction that the price of oil is destined to rise indefinitely into the future.

Dude, what you don't know is kind of embarrassing. Hate to break it to you, but price volatility is a different animal from a price trend. That's just what a trend is--you look at prices over time and smooth out the volatility. Let's cast our minds back to the distant days of 2006, shall we? Crude prices dropped from near $80 to below $60. Over 20%!!!! Isn't it great how that massive drop, over twice(!) the size of the one you point to, proved that those who were predicting higher oil prices were so wrong (this is sarcasm, in case you missed it)?!!

And, speaking of cherry picking economic data, recent trends in the oil futures markets away from backwardation and towards contango directly countervail your assertion that recent fluctuations in the spot price highlight my ignorance, but whatever.

Thanks for ignoring my request that we stay away from remedial rudimentary economics, though!

Posted by DMonteith | June 6, 2008 1:43 AM

DMonteith,

So says the man who so recently said this

What about it?

My $16 is a linear extrapolation of price trends over the past 10 years.

Your $16 is made-up nonsense. A momentary glance at the oil price chart posted by DTM would show you that oil prices have never changed "linearly" in any decade over the past 100 years or more. No one has any basis for making confident predictions about the price of retail gasoline in the United States a decade from now. Your numbers are meaningless.

Your $4 prediction

I haven't "predicted" anything about the future price of gas. The calculation I gave is an illustration of the huge impact of new technology on automobile fuel-efficiency, and hence on the effective price of gasoline, assuming gas is even used as a fuel at all. A plug-in hybrid with a gasoline engine could be operated without requiring even a single drop of gasoline during its lifetime. Ditto for combustion-engine vehicles that run on biofuels. Ditto for all-electric cars powered by fuel-cells. Ditto for various other burgeoning technologies.

However, here are some things that lead me to believe that I'm more likely to be right than you: oil discovery trends; rig capacity; the effects of enhanced recovery techniques (horizontal drilling, water and co2 injection, steam cracking, etc.) that increase production and push the shape of lifetime oil field production curves to the left but also steepen the slope of the decline side;

Please cite the oil industry experts who are predicting $16/gallon gas in 2018, and studies supporting your claim that that price is plausible based on "oil discovery trends; rig capacity" and the other things you mention.

You can't, can you? Because there aren't any. You're fabricating numbers out of thin air.

Posted by Mixner | June 6, 2008 2:25 AM

DMonteith,

Dude, what you don't know is kind of embarrassing. Hate to break it to you, but price volatility is a different animal from a price trend.

Duuuuude, you're embarrassing yourself. You obviously don't know whether that recent decline is a temporary fluctuation or the start of a trend. The fact that the price of oil is so volatile and can change so dramatically over short periods of time illustrates the stupidity of trying to predict what it will be a decade from now.

Posted by Mixner | June 6, 2008 2:36 AM

Mixner,

I'm still waiting for sourcing on the following:

"The problem with most new rail project proposals is that they don't even meet a standard of 'likely to be cost-effective.' Mostly, they would be a huge waste of money."

"Light-rail systems can substitute for only a tiny fraction of car or bus trips, at much higher cost per passenger-mile."

As for projected costs, the link you provided showed that of the 16 projects completed after 1994, three came in under the projected cost, and another four had a total overrun of only 3 to 13%. I don't think that supports your claim that "[a]ctual costs of such projects almost always exceed projected costs."

As for ridership, I also couldn't find the study about ridership you cited. Further, I would note that it appears to be from 1989. I wouldn't be surprised about such a finding at that particular point, since my guess is a lot of ridership projections were based on late-70s/early-80s gas prices that proved transient (see below for more on gas prices).

As for electricty versus gasoline, first I didn't force you to overstate your point, so the fact that you can't support your point isn't my problem. Second, again, my claim was that it is possible using residential electricity for cars may in the future be more expensive that using gasoline in cars was before the recent runup. Specifically, gas back in the late 1990s hit a low of about $1/gallon nominal, or about $1.30/gallon today adjusted for inflation. So, electricity would not have to increase much in real terms from the $1.04 equivalency rate you quoted to make this scenario plausible, and again cleaner electricity sources are going to be more expensive than many of our current sources.

Finally, you are the one who apparently isn't listening. If gas prices don't start coming down radically, and soon, this will be an unprecedented event in the history of gas prices. And in fact some of your own claims explain why we shouldn't expect to see large-scale switching from cars to public transit in the short run (e.g., it takes time to create new transit routes). So, the fact that a large but transient gas price spike didn't result in a lot of switching doesn't prove that an already larger, potentially larger still, and potentially nontransient, increase in gas prices wouldn't result in switching in the long term. And again, there just isn't a precedent for such a development, so history is of limited use.

Posted by DTM | June 6, 2008 11:01 AM

DTM,

As for projected costs, the link you provided showed that of the 16 projects completed after 1994, three came in under the projected cost, and another four had a total overrun of only 3 to 13%. I don't think that supports your claim that "[a]ctual costs of such projects almost always exceed projected costs."

Er, you need to read more carefully. Only 3 of the 16 projects came in under their projected cost. The other 13 all cost more than their projection. The 3 that came in under their projection were all relatively small. The most expensive of the 16 projects by far was the San Juan Tren Urbano, which cost a whopping 113% more than it was projected to cost. The second most expensive, the San Francisco BART airport extension, exceeded its projected cost by 21%. And the third most expensive, the Hudson-Bergen light rail, exceeded its projection by 78%.

For projects before 1994, the record is even worse. Only 1 of the 10 projects came in under its projected cost. The other nine all cost more than their projections. The biggest project in the group by far--in fact, the biggest new rail project in the United States of the last 50 years--was the Washington Metrorail, and that exceeded its projected cost by a whopping 83%. The projected cost was $4.3 billion and the actual cost was almost $8 billion.

The record of cost projections for rail projects is appalling. Actual costs almost always greatly exceed projected costs, and the most expensive projects tend to have the biggest cost overruns in both absolute and percentage terms. This is one important reason why the claims of rail proponents such as yourself about the alleged cost-effectiveness of rail do not deserve to be taken seriously.

Posted by Mixner | June 6, 2008 1:13 PM

DTM,

my claim was that it is possible using residential electricity for cars may in the future be more expensive that using gasoline in cars was before the recent runup. Specifically, gas back in the late 1990s hit a low of about $1/gallon nominal, or about $1.30/gallon today adjusted for inflation. So, electricity would not have to increase much in real terms from the $1.04 equivalency rate you quoted to make this scenario plausible, and again cleaner electricity sources are going to be more expensive than many of our current sources.

You're cooking the books again. You cannot meaningfully compare 2008 electricity prices against 1990s gas prices. It's apples and oranges. The relevant comparison is between electricity and gas prices at the same point in time. Again, show me your evidence that it is even remotely plausible that the price of energy from residential electricity will ever exceed the price of energy from retail gasoline. Not "guesses." Not "assumptions." Evidence.

If gas prices don't start coming down radically, and soon, this will be an unprecedented event in the history of gas prices.

What will be an “unprecedented event?” In the 1970s, gas prices rose for almost a decade, ultimately doubling. The real cost of gas in the early 1980s was only slightly less than the real cost right now, after the recent increase to around $4/gallon in 2008 dollars. And yet the market share of mass transit fell during that period. Development of sprawling suburbs boomed. Consumers compensated for the rise in prices during the 70s not by abandoning cars for mass transit, or moving from big houses in sprawling suburbs to dense housing in “walkable communities,” but by switching to more fuel-efficient cars. And today’s consumers have an array of fuel-efficiency and conservation options that were not even available in the 1970s. Your “guesses” and “assumptions” about how Americans will respond to higher gas prices are contradicted by both historical experience of actual behavior and rational projections of the effects of new technologies and conservation options.

Posted by Mixner | June 6, 2008 1:49 PM

I am not predicting $16/gallon gas in 2018.

Is that clear enough? Shall I write it more slowly?

I. Used. It. In. An. Ironic. Sense. In. Order. To. Show. That. You. Were. Making. Implausible. Assumptions.

I apologize for using a rhetorical gambit so far above your head.

My actual claim is that oil production declines over the next several decades are likely to outstrip our capacity to improve efficiency. This claim is not based upon extrapolation from price trends but upon a careful consideration of the fundamentals of oil production. It would, for instance, not surprise me if there were a downward correction in prices over the near term because speculation seems to have been getting ahead of fundamentals recently. The long term trend, though, looks bullish because we just aren't going to see much in the way of production increases and are likely to see declines. It is not as outlandish as you seem to think it is to expect that prices will continue to rise as supplies dwindle faster than demand can easily adjust.

You have given me no good reason to think that efficiency gains are going to help that much. The threefold increase in efficiency that you state will start going into effect over the next ten years will not even cover the fourfold runup in prices we've already seen, and overall production has simply plateaued over past few years. As production begins to decline, even more pressure will be put on these as yet ephemeral efficiency gains.

Also, hand waving towards the seventies ignores the fact that there is currently no spare production capacity in the world whereas throughout the 70's 80'and 90's Saudi could essentially double their production by turning up a faucet. The price spike of the seventies was due to politics, not fundamentals.

The experts that you could read who back me up:

There's this guy. And this guy. And the proprietors of this blog. And the collection of people who post and comment on this blog.

Show me that you have any understanding of what these people are talking about and I might start to take you seriously.

Posted by DMonteith | June 6, 2008 8:03 PM

And, just to reduce the harshness level somewhat, I think that some of the points you make vis-a-vis transit are well taken. I think that your overall position discounts likely future energy issues too greatly and that if you factored these into your thinking you might reach different conclusions.

But I have to call foul on this:

Duuuuude, you're embarrassing yourself.

I introduced both the "dude" and "embarassment" motifs and it would be better form if you developed your own artful insults. Copycatism is an aesthetically challenged rhetorical form.

Cheers!

Posted by DMonteith | June 6, 2008 8:12 PM

I. Used. It. In. An. Ironic. Sense. In. Order. To. Show. That. You. Were. Making. Implausible. Assumptions.

There. Was. Nothing. Ironic. About. It. You seriously suggested an oil price of $16 in 2018. You have consistently ignored all my requests for citations of studies and expert opinion to back up this number. A laundry list of factors that influence the price of oil ("oil discovery trends," etc.) is not an analysis.

You have given me no good reason to think that efficiency gains are going to help that much. The threefold increase in efficiency that you state will start going into effect over the next ten years will not even cover the fourfold runup in prices we've already seen,

What "fourfold runup?" The chart DTM posted shows an absolute lowest real gasoline price since 1918 of about $1.40/gallon, in 1999. The average price for the past 40 years has been more like $2/gallon, and it has fluctuated wildly over that period. Even just a doubling of fuel efficiency would change $4 gas into $2 gas, and even cars already on the market provide for that. Trading in your full-size SUV for a compact SUV or midsize sedan will double your fuel efficiency. Trading in your full-size SUV for a Toyota Prius will quadruple your fuel efficiency. Plug-in hybrids will achieve much greater savings. As I pointed out in an earlier post, the PHEV Ford Escape, a compact SUV that is expected to be available within a few years, will travel 30 miles on one dollar's worth of residential electricity.

Another factor is the decline in the cost of gas as a share of the total cost of car ownership. In 1975, gas made up 33.4% of the total cost of owning and operating a car. By 2006, gasoline costs had declined to 17.1% to total costs. It's gone up since then, but it's still not anywhere close to the level of 30 years ago. Since gas is a much smaller share of total costs, driving behavior is much less sensitive to gas price increases.

And of course, there are all sorts of other strategies for gas conservation that Americans have long used to defray the costs of gas: carpooling, telecommuting, compressed work schedules, combining multiple trips into single trips, greater use of the more fuel-efficient vehicles in multi-car households, taking vacations closer to home, and so on.

But instead of switching to more fuel-efficient vehicles or taking relatively simple and unobtrusive steps to adjust to higher gas prices--just like they did when gas increased dramatically in the 70s--you think people are instead going to make major disruptions to their lives, move from their big suburban homes to small houses in "walkable communities" (which don't even exist), and give up driving for hugely expensive new mass transit. Sorry, but it's not remotely plausible.

Posted by Mixner | June 6, 2008 9:03 PM

Here's what I said:

Well, Mr. History Man, gas prices were $1/gallon in 1998 and there's no reason to think that they couldn't be $16 in 2018 (4x increase every 10 years).

Now that I reread it, I can see how that statement is exactly the same as saying "I predict that gas will be $16/gallon in 2018." You've totally convinced me that my prior understanding of the English language was just a mirage. My mind has just been freaking blown!

There. Was. Nothing. Ironic. About. It.

Again with the copycat thing. I'm dissappointed. But I am impressed by your ability to accurately sense my intentions through the intertubes. I'll never be lonely again, knowing that you're here with me in my head.

You have consistently ignored all my requests for citations of studies and expert opinion to back up this number.

I refuse on the grounds that I am not proposing any specific number on any specific date. I assume that you can sense my sincerity on this point with your ESP powers. Good luck, however, in finding someone who will make such claims, as I'm sure you will win your argument with them.

I would, however, like to note that I have provided links that with some effort on your part to actually read some stuff would provide you with the same information that has led me to the conclusions with which you disagree. I invite you to peruse these materials and explain to me how these experts are wrong.

And finally, you posit that PHEV's carpooling,telecommuting, less mundivagrant vacationing, etc. are reasonable responses to higher energy prices, but apparently you belong to an obscure religious sect with divine dictates that state "Thou shalt not ride trains" and "Thou shalt not change zoning laws for that might lead to walking to the grocery store, and that's right out". As an atheist, I'm of the opinion that all of the above options are both reasonable and necessary to pursue, but I'm also aware that there's no arguing over matters of faith. I therefore encourage you to never ride a train and to never walk somewhere ever again if it makes you feel better or guarantees you a really happening afterlife or whatever.

Posted by DMonteith | June 7, 2008 12:04 AM

DMonteith,

Again with the copycat thing.

I noticed this complaint the first time you made it. It's stupid, so I ignored it. It won't become any less stupid by repetition.

I would, however, like to note that I have provided links that with some effort on your part to actually read some stuff would provide you with the same information that has led me to the conclusions with which you disagree.

When I read that post I clicked on your first link, which took me to a webpage of "recent speeches and papers" by one "Matthew R. Simmons," whoever he is. I have no intention of wading through those documents looking for support for your assertion that $16-or-thereabouts oil by 2018 is plausible. It's not my job to track down evidence for your claims. That's your responsibility.

And finally, you posit that PHEV's carpooling,telecommuting, less mundivagrant vacationing, etc. are reasonable responses to higher energy prices,

Yes, I do. I also posit that they are far more plausible responses to higher gas prices for the vast majority of Americans than the kind of drastic lifestyle changes you're apparently predicting, involving the mass abandonment of cars for public transit and the mass abandonment of big homes in traditional suburbs for dense housing and compact developments.

but apparently you belong to an obscure religious sect with divine dictates that state "Thou shalt not ride trains" and "Thou shalt not change zoning laws for that might lead to walking to the grocery store, and that's right out".

I know you think writing like this is witty and clever, but it's just ignorant and stupid. You're either ignorant of the basic facts about transportation and housing, or you're just not thinking them through.

Even if it operated at full capacity, the nation's rail system is not remotely extensive enough to substitute for more than a tiny fraction of car journeys. Buses could substitute for a larger share, but they mostly run on gasoline just like cars. Mass transit of all kinds constitutes such a tiny share of total travel in America that even if that share were to double it would barely make a dent in oil consumption.

The planning, approval and construction process for new rail systems and expansions typically takes a decade or more. A significant new rail project started today probably wouldn't carry its first passenger before 2020. It would then need to operate for decades to produce benefits commensurate with its huge startup costs. By then, advances in motor vehicle fuel-efficiency and automation will likely have made rail even less attractive to drivers than it is now.

As for housing, there is no sign of any large-scale desire on the part of Americans to switch from big suburban houses to significantly smaller ones in compact developments. Even if you could wave a magic wand and change all future housing construction starting from tomorrow into smaller homes in "walkable communities," it would take decades to have a significant impact on transportation. We have been building big homes in sprawling suburbs for 50 years, and that's the kind of housing that will dominate the market for the foreseeable future.

In short, your predictions and prescriptions are laughable, ignoring fundamental realities about the nature of housing and transportation, and the fundamental preferences Americans have exhibited for decades.

Posted by Mixner | June 7, 2008 8:32 PM

Mass transit of all kinds constitutes such a tiny share of total travel in America that even if that share were to double it would barely make a dent in oil consumption.

Gotta start somewhere. After all if someone had proposed 100 years ago that we build a highway system for automobiles like what we have today then the Mixner of 1908 would have taken exactly the same position that you do now regarding mass transit investment. I take it that you would now disagree with the putative centenarian Mixner's take.

The planning, approval and construction process for new rail systems and expansions typically takes a decade or more. A significant new rail project started today probably wouldn't carry its first passenger before 2020. It would then need to operate for decades to produce benefits commensurate with its huge startup costs.

How is it that your concerns along these lines, which I think are valid points by the way, outweigh the equally true points that I've made about the dubious to non-existent benefits of efficiency on the larger market and the long fleet changeover times that will blunt these efficiency gains for a long time to come. Again, I feel that there is no reason to reject either course of action and my analogizing your bias to religious conviction, witty or no (I say yes), was an expression of my inability to fathom your animosity to rail/density development. You are suggesting that we put all your eggs in one "PHEVSs and carpooling will save us" basket and that's just not prudent.

I also posit that they are far more plausible...

They are far more plausible because they are the easiest things to do, the low hanging fruit. Once they are done, the less plausible, more difficult tasks must be tackled. This will be necessary over the long term energy crunch we're just starting to experience. Of course you don't believe that, which brings us to:

It's not my job to track down evidence for your claims. That's your responsibility.

Look, I can lead a horse to water, but I can't make him drink. Since you have no interest in trying to learn why I think what I do, I find it absurd that you dismiss it as wrong. If someone makes a claim about a topic that I know nothing about but that sounds counterintuitive to me, my reaction is to either shrug and say "well, maybe", or, if it piques my interest, to go read some stuff to find out whether there's anything to it. You, on the other hand, don't know and don't want to find out, but are willing to make sweeping claims on the basis of that ignorance.

The fact of the matter is that the geophysical, economic, and political factors that affect oil production are complex and it is not my responsibility to teach you everything I have learned from an informal but non-trivial amount of study of the subject, particularly if you refuse to learn. The nickel summary is that the preponderance of evidence and analysis points toward impending declines. If you have previously un-debunked information that contradicts it (this includes references to the 70's spike) then please present it and I will consider it with an open mind and accept it or present reasonable objections.

Here's a little summary of how our conversation has gone (please forgive the mildly strained analogy and the wittiness):

Me: I checked the weather report today and it's probably gonna rain.
Mixner: Well it was sunny yesterday so that's wildly implausible!
Me: Ummm...The weather guys probably know more about this than you and they said something about low pressure and--
Mixner: This "low pressure" has nothing to do with the fact that yesterday was sunny and that today will be the same!
Me: Okay...I'm gonna get a rain jacket and galoshes in any case.
Mixner: You fool! Galoshes are for your feet and rain comes from the sky! Besides, why waste the money?
Me: Well, it might rain enough that puddles will get my feet wet.
Mixner: That's wildly implausible! Galoshes are stupid!

Lather. Rinse. Repeat.

I noticed this complaint the first time you made it. It's stupid, so I ignored it. It won't become any less stupid by repetition.

Charming. You must be a real hit at cocktail parties with that sense of humor of yours.

Posted by DMonteith | June 7, 2008 11:25 PM

PS: I notice you've gotten real quiet about how the recent 10% drop in oil prices proves I'm wrong. I guess Thursday and Friday market moves kicked the crap out of that argument.

For what it's worth, I think speculation is getting a bit ahead of fundamentals, but reflexivity and positive feedback make it pretty damn frightening to make a short term bet on prices going either way these days. The long term smart money is still long, though.

Good times!

Posted by DMonteith | June 8, 2008 12:11 AM

DMonteith,

Gotta start somewhere.

No, you don't gotta start at all. The point is that by the time more mass transit and denser housing could possibly yield a significant benefit to the nation in terms of reduced oil consumption, motor vehicle technology will have advanced to the point at which that benefit is negligible or non-existent. In just a few years, we'll have SUVs that can go 30 miles on $1 of electricity, the equivalent of more than 100 miles per gallon of gasoline. By the time your shiny new mass transit systems are operational and a substantial fraction of the population has shifted to smaller homes in compact developments closer to their workplaces--assuming, of course, that you could actually make those things happen--they would no longer be needed.

How is it that your concerns along these lines, which I think are valid points by the way, outweigh the equally true points that I've made about the dubious to non-existent benefits of efficiency on the larger market and the long fleet changeover times that will blunt these efficiency gains for a long time to come.

I don't know what argument of yours "the dubious to non-existent benefits of efficiency on the larger market" is supposed to mean. As for "fleet changeover times," again, it would take decades to achieve significant oil consumption reductions through mass transit expansion and large-scale changes in housing. By that time, virtually all current motor vehicles will have been replaced. Even now, SUV sales are way down, small vehicle sales are way up, and analysts are expecting hybrid sales to go through the roof. People are already adapting to higher oil prices by switching to more fuel efficient vehicles and through the other mechanisms I mentioned (telecommuting, carpooling, etc).

They are far more plausible because they are the easiest things to do, the low hanging fruit. Once they are done, the less plausible, more difficult tasks must be tackled.

Sorry, but you have made no serious case that the "more difficult tasks" (by which I assume you mean more mass transit and relocation to smaller housing) "must be tackled" at all, ever. Right now, people can use the kind of simple conservation measures I have described to significantly reduce their gasoline costs. Many people are probably simply swallowing the extra cost of gas and economizing in some other area of their budget. And if oil prices remain at current levels or go higher, more and more people over the coming years are likely to start switching to more fuel-efficient cars. If my car gets 100 mpg, even $10/gallon gas wouldn't be a burden, and I would have even less incentive to downsize my housing or put up with the hassles and inconvenience of mass transit than I do now.

Posted by Mixner | June 8, 2008 1:13 AM

You are suggesting that we put all your eggs in one "PHEVSs and carpooling will save us" basket and that's just not prudent.

No, what would be imprudent is huge investments in mass transit infrastructure and new housing developments for which there is no clear demand, and no clear evidence of future demand. Home builders are not going to start constructing "walkable communities" unless there's a clear demand for them, anyway, especially given the way they've been burned recently by the real estate bubble. And governments are not going to commit the hundreds of billions of dollars that would be required for large-scale expansion of the nation's mass transit infrastructure without clear and sustained public support. There may be some modest additional spending in response to recent increases in demand--more buses, more frequent trains, etc. But the huge increase in spending you apparently seek isn't remotely plausible (there's that phrase again).

Barack Obama isn't proposing huge new mass transit spending. But he does want to spend $15 billion a year "to advance the next generation of biofuels and fuel infrastructure, accelerate the commercialization of plug-in hybrids, promote development of commercial-scale renewable energy, invest in low-emissions coal plants, and begin the transition to a new digital electricity grid." Like me, he wants to focus on new automobile technologies and making energy and fuel cheaper and cleaner. Unlike you, he's not trying to push people to move into smaller houses or give up their cars for trains and buses.

Posted by Mixner | June 8, 2008 2:00 AM

I don't know what argument of yours "the dubious to non-existent benefits of efficiency on the larger market" is supposed to mean.

Please try to pay attention to what I say. Diminishing returns. Initial improvements will be much larger than later improvements. Jevon's Paradox. Efficiency gains stimulate demand. Both factors will mean that efficiency improvements will likely not keep pace with continual oil production declines of over 4%/year. That's a halving rate of 25 years.

In just a few years, we'll have SUVs that can go 30 miles on $1 of electricity...

And if we start running our vehicle fleet on electricity, that $1 is going to turn into lots more than $1. Demand, supply, yada yada. And talk about infrastructure development that will take decades and cost a fortune. The electrical grid is no way prepared to carry the burden of our automotive commuting power needs.

And as for the power source behind the electricity:

Coal reserves in the US are calculated to last for 200 years at current rates of consumtion, but would obviously last far less time if we try to run our current transportation system on coal. Also "easy coal" in the US is a thing of the past and production per miner has been in decline for the past 8 years or so. Have you checked price trends for coal recently? So we're unlikely to be able to ramp up and stay up cheaply. Oh, and global warming.

North American natural gas production is in decline. No ramp up possible. LNG importation is expensive and requires some large infrastructure investments.

Nuclear. Talk about infrastructure lead times... Also, the EROEI for nukes is the lowest of all these options at about 5 to 1, so overhead is higher.

Given your ignorance of all of the above, how can you so certainly state that mass transit and density will no longer be needed? After we've done what you recommend we'll all heave a big sigh of relief...and then energy prices will continue to rise.

And governments are not going to commit the hundreds of billions of dollars that would be required for large-scale expansion of the nation's mass transit infrastructure without clear and sustained public support.

Pay now or pay more later, either for infrastructure or for far higher commute costs.

...put up with the hassles and inconvenience of mass transit..

Have you even driven in rush hour in America in the past 15 years?

Unlike you, he's not trying to push people to move into smaller houses or give up their cars for trains and buses.

I'm not trying to force people into trains. We all know that gas chambers are on the other end of the line in that scenario. I'm suggesting that we start trying to give people the option to use trains that they currently don't have. And you seem not to have noticed that people are in fact choosing to live in denser downtown areas these days already. No guns required.

Density is coming, and I'm still not sure why you hate that so much: you seem to be doing just fine with its presence between your ears. Besides, you'll still be free to live wherever you want if you can afford it.

Posted by DMonteith | June 8, 2008 12:34 PM

DMonteith,

Please try to pay attention to what I say. Diminishing returns. Initial improvements will be much larger than later improvements. Jevon's Paradox. Efficiency gains stimulate demand. Both factors will mean that efficiency improvements will likely not keep pace with continual oil production declines of over 4%/year.

This is just nonsense. First, Jevon's Paradox does not state that "initial improvements will be much larger than later improvements." Fuel-efficiency gains can come from both incremental improvements within a technology (e.g., better engineering of conventional gasoline engines) and game-changing new technologies (e.g., hybrid vehicles, PHEV vehicles and fuel-cell vehicles.) Switching from conventional engines to hybrid engines produces a big gain in fuel efficiency. Switching from hybrid to PHEV produces another big gain. These gains are larger, not smaller, than the incremental gains over the past 20 years from refinement of conventional gasoline engines. And second, the efficiency gains do not have to get bigger over time, or even remain constant, to outstrip increases in the cost of oil. You are again simply making numbers up out of thin air.

And if we start running our vehicle fleet on electricity, that $1 is going to turn into lots more than $1.

Again, you have no basis for this claim. Burning a barrel of oil in a huge municipal power plant is much more energy-efficient than burning it in a small gasoline engine. And taking advantage of the largely idle capacity of the national electrical system at night through the large-scale recharging of plug-in hybrids will likely reduce the unit cost of residential electricity by increasing the return on capital for electrical system infrastructure. And of course, $1 is a lot lower than $4, so there's plenty of room for electricity prices to rise and still be much cheaper than the energy equivalent from gasoline.

Coal reserves in the US are calculated to last for 200 years at current rates of consumtion, but would obviously last far less time if we try to run our current transportation system on coal.

But we're not going to run our transportation system on coal. Coal will likely be a part of it. So will oil, natural gas, biofuels, nuclear and renewables. The point is that the shift to new, much more fuel-efficient technologies, and the shift from oil to other fuels to power our motor vehicles, will make us much less sensitive to large increases in oil prices. Assuming such increases even continue much longer, which is highly dubious.

Posted by Mixner | June 8, 2008 6:02 PM

DMonteith,

how can you so certainly state that mass transit and density will no longer be needed?

There are no certainties. The point, as I have explained, is that the fundamental facts regarding transportation and housing all point to a future decline in mass transit and average density. Your claim that we will "need" much more transit and higher density in the future rests on a set of wildly implausible assumptions about resources, technology and markets for which you can offer no serious argument. The simple fact that even right now, today we have the technology to quadruple the fuel efficiency of our current motor vehicles is a clear illustration of the wildly implausible nature of your predictions.

Have you even driven in rush hour in America in the past 15 years?

Have you ever waited an hour for a bus in the wintertime in Chicago? Really, you're just flailing around now. Driving is clearly Americans' preferred mode of travel for the vast majority of trips. The average commute time by mass transit is almost double the average commute time by car. Mass transit has been losing market share to private motor vehicles for decades. For all but a very small share of commutes, most of them in just a single metropolitan area (New York), driving is simply much more convenient, comfortable and flexible than taking buses and trains.

I'm not trying to force people into trains.

Well, perhaps you could articulate more clearly and precisely exactly what policies you are advocating. The impression I get is that you want to spend a lot more on rail. That means higher taxes. That means less money in people's pockets to run their cars. So yes, I'd say you are trying to push people into trains.

And you seem not to have noticed that people are in fact choosing to live in denser downtown areas these days already.

"People?" How many people? What proportion of the population? As the numerical population of the country rises, there will probably be more people in all types of housing. That doesn't alter the fact that the overwhelming trend of the past half century or more has been towards bigger housing in lower-density population centers. As I have said before, this trend may slow or even stop, but I see absolutely no indication that it is likely to be reversed and that sprawling suburbs are going to be replaced with denser housing in "walkable communities."

Posted by Mixner | June 8, 2008 6:35 PM