Monday, July 7, 2008

This can't happen to us -- we're Americans!

Reality check, folks. It is happening to us Americans. Wel have to stand in line with the rest of the world for dwindling natural resources.

From a new report by CIBC World Markets, a Canadian investment bank:

With the basic laws of supply and demand no longer operative in crude oil markets, we are compelled to once again raise our target prices for oil. We are lifting our target for West Texas Intermediate by $20 per barrel to an average price of $150 next year and by $50 per barrel to an average price of $200 per barrel by 2010. Under prevailing refinery margins, that should translate into a near-$7 per gallon pump price within two years, a 70% increase from today’s already record levels....

As gasoline prices climb inexorably, American driving habits are going to have to undergo a massive change, mimicking the driving habits long adopted by Europeans who have faced much higher gas prices. Average miles driven will likely fall by as much as 15%, while the market share of light trucks, SUVs and vans will be literally halved, reversing the trend of the last fifteen years. But the most fundamental, and unprecedented change will be in the number of vehicles on the road.

Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America’s highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today—a decline that dwarfs all previous adjustments including those during the two OPEC oil shocks. Many of those in the exit lane will be low income Americans from households earning less than $25,000 per year. Incredibly, over 10 million of those American households own more than one car.

Soon they won’t own any....

Drum roll, please.

More fundamentally, the freeways are about to getless congested. (Emphasis added) Not only will the number of vehicle registrations in the United States not grow over the next four years, but by 2012 there should be roughly 10 million fewer vehicles on the road in America than there are today. For the past half century, America has spent the bulk of its infrastructure money on building highways—only to see that soon, $7 per gallon gasoline prices will lead to fewer and fewer people using them.

Will somebody wake up State Transportation Secretary Frank Busalacchi and tell him? He is snoozing gently in the past.

1 comment:

Joe Klein said...

Speaking of snoozing in the past. Scott Walker stands in front of a 48 star flag in his picture on the Milwaukee County web site.

Ironically, a flag that never flew over a Milwaukee without rail transit.