Wednesday, August 09, 2006

Gasoline Prices Approaching "Minimally Acceptable"

I've long said that the price of gasoline is too low until it results in consumers changing their consumption habits. Since gasoline started its most recent climb, I've seen precious little except yammering and handwringing about "skyrocketing" prices. Today's New York Times online and the Pew research it cites is the first time I've seen a discussion that rising prices are actually beginning to curb consumption. In my mind, that means we are just barely nosing in to where gasoline prices should be:

Gas Prices Alter Habits of Many, but Far From All - New York Times

DENVER, Aug. 8 — Car owners across the country braced themselves on Tuesday for another smack in the face at the gasoline pump, as the shutdown of the giant Prudhoe Bay oil field in Alaska rippled through energy markets and consumer psyches.

But Justin Ogle, a newly minted light-rail commuter, was calm. Mr. Ogle and his wife, Lauren, bought a new home two months ago, partly to be near the train tracks.

“Rising gas prices are going to force us to be more efficient,” Mr. Ogle, 29, said, looking up from the newspaper as his train rattled toward downtown Denver, where he works as an architect.

Americans are deeply divided in their responses to high gasoline prices, as they are on so many other things, including politics, class and culture. Many say they are using less gasoline, but for every Mr. Ogle, there may well be a Glennis Claxton. Ms. Claxton, a 26-year-old student at Rice University, does not own a car, but she said she had gotten so fried by riding the sweltering buses in Houston that she was thinking of buying one, even with the price of gas what it is.

Researchers, pollsters and ordinary Americans in interviews on Tuesday said they saw no broad national experience or commonality of sacrifice when it came to gasoline, even when the nation endured a jolt like the one from Alaska.

. . .

In the Pew Research survey of 1,182 Americans — 1,048 of them drivers — 55 percent said they were driving less because of the recent increases in gasoline prices. The poll, taken from June 20 to July 16, had a margin of sampling error of plus or minus three percentage points.

Yet Americans’ overall gasoline appetite has barely budged. Total use this year is up about one-half percent to 1 percent compared with 2005, according to federal figures — a slower rate of growth than in the past, but hardly the mark of a nation with its foot fully on the brake.

There are anecdotal glimpses of a drop in driving. The number of passengers taking rail service in Los Angeles County in June was up 11 percent from last year. And the number of cars passing through the Eisenhower Tunnel on Interstate 70 in the Colorado Rockies, which has been rising slightly since 2002, fell slightly in July compared with the same time last year. The decrease is the first since 2001, according to the State Department of Transportation.

. . .

Researchers at Pew say the pattern of consumers using less when high prices linger has been seen before, in the gasoline price spikes of the 1970’s and early 1980’s. Per capita consumption of gasoline has fairly consistently mirrored the average price per gallon since at least 1977, falling when prices increased, rising when prices fell, according to the Pew study, which is scheduled to be released Wednesday.

Other experts say the nation’s shifting economic, demographic and urban terrain in recent years — greater disparity of rich and poor than in the 1970’s, and more transportation options than a generation ago, including mass transit rail lines in more cities and hybrid cars — is making this spike different.

. . .
Still, as the article points out, the evidence is mostly anecdotal at this point. So I'm not yet ready to say I like where the prices are. But it's getting closer.

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