Taking the foot off the gas

Cutting back on fuel consumption could be the key to combating rising prices, but will Americans do it?

April 30, 2006|By PAUL ADAMS | PAUL ADAMS,SUN REPORTER

They've grumbled, cursed and called for price-gouging investigations. But there's one thing that Americans have scarcely ever done when rising gas prices make front-page news. Use less gas.

"I like to call my generation the most hypocritical generation ever," said Robert Kaufmann, a professor in the Center for Energy and Environmental Studies at Boston University.

"We came of age when oil was getting very expensive, and we swore we'd never drive the big, ugly cars like our parents, and we've just become a lot worse than our parents ever could have imagined."

Gasoline consumption has climbed from about 6 million barrels a day in the early 1970s to an average of 9.1 million barrels a day last year -- an upward march that has had little correlation to price.

The only break in the pattern came in the late 1970s and early 1980s, when the Arab oil embargo, long gas lines and a recession prompted a decade of conservation.

But with gas prices approaching their historical high in inflation-adjusted terms, many are pondering whether Americans have the power, and the will, to cut back on a scale not seen since the Carter and Reagan administrations.

Even a small decline in consumption could be the catalyst needed to send prices into more comfortable territory, experts say.

History suggests it can be done, but not overnight.

In the face of shortages and high prices, Americans responded in the 1970s by driving 55 mph, car-pooling, buying smaller cars and driving less.

The government took action by imposing fuel-efficiency standards on automakers -- regulations that have since been relaxed. The result was a more than 11 percent decline in gasoline consumption from 1978 to 1981, according to Energy Department data.

By contrast, speed and size rule today's highways. The average car fuel efficiency is 24 miles per gallon, compared with a peak of 27 mpg in 1987.

And we can go zero to 60 mph in an average of 9.9 seconds today, compared with 14.1 seconds in 1975, an acceleration that also burns more fuel.

"Back then, there was also some nationalism," said Steve Nadel, executive director of the American Council for an Energy Efficient Economy in Washington, referring to the late 1970s. "We were over a barrel by OPEC [the Organization of Petroleum Exporting Countries].

"We don't have the same rallying cry today."

There are signs of a nascent movement toward conservation, though it's less pronounced than what some experts would have expected given the rapid rise in gas prices.

For starters, consumers did use slightly less gas after last fall's hurricanes sent prices soaring, but some economists think that might have simply been the result of so many cars being under water -- and out of commission -- along the Gulf Coast.

Consumption went back up after prices fell back to near $2 a gallon in many parts of the country.

Also, sales of popular sport utility vehicles fell after the hurricanes; they rebounded some after carmakers began offering thousands of dollars in incentives to spur sales.

But in the first quarter of this year, sales of full-size SUVs are down 15.5 percent compared with the previous year, said George Magliano, director of automotive industry research for Global Insight. Mid-sized SUVs fell 5.5 percent. At the same time, however, sales of subcompact cars -- the smallest and most fuel-efficient -- were off 10.7 percent, he said.

"We like to be out on the open road, we like to drive, and we like a car that has lots of power behind it," Magliano said.

Compact cars, a step up in size from subcompact vehicles, are gaining market share, based on March data, said Jesse Toprak, a senior industry analyst for Edmunds.com, a Web site that tracks car prices and sales trends.

That segment commanded 15.5 percent of the market, compared with 15 percent in March 2005. But that was still less than the 16.2 percent share compact cars enjoyed in 2003.

And luxury SUVs, which often have powerful engines and cost $40,000 or more, also gained share, going from 2.1 percent of the market in March 2002 to 3.6 percent this year.

Carmakers continue to offer huge incentives in order to spur sales of large SUVs -- a sign that consumer interest is waning, Toprak said.

Meanwhile, incentives for more fuel-efficient compact cars are down compared with this time last year, which suggests consumer interest is gaining. Still, the change in buying behavior is not huge.

"Surprisingly, it's not a big shift," Toprak said. "There is some shift in the marketplace, but that tends to be in the extremes of the product line."

Doug MacIntyre, a senior oil market analyst with the Energy Department in Washington, said it usually takes sustained high prices before consumers cut back on consumption.

In other words, consumers need to believe that high prices are here to stay, and it's unclear whether that reality is sinking in.

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