[extropy-chat] Debate on Peak Oil

[Hal Finney]

The Los Angeles Times has an article this morning claiming that increased
gasoline prices are reducing traffic on Southern California freeways:
<http://www.latimes.com/classified/automotive/highway1/la-hy-wheels4may04,0,1146703.story?coll=la-home-highway1>.

Gas prices in California are $2.63/gallon, higher than the national
average of $2.24/gallon.  The reporter writes:

"Anecdotally, a lot of people I talk to say they are seeing the effect
every day, which has cut their commute times dramatically. Normally
jammed freeways are mysteriously wide open.

"If people are indeed cutting back on driving, avoiding discretionary
trips, car pooling and using public transportation, it should mean that
gasoline sales volumes are dropping.

"John Felmy, chief economist at the American Petroleum Institute, the
Washington, D.C., trade group that represents the oil industry, says
that wholesale deliveries of gasoline across the nation are down slightly."

It would be interesting to see figures on gas consumption for California
alone, since it seems to be taking the brunt of the price increase.

The article also notes,

"Meanwhile, Southland public transportation agencies are reporting that
ridership has jumped in the first months of 2005 - up between 3% and 12%,
depending on the system."

All this points to a short-term response to the rapid increase in prices.
The article claims a 10% demand elasticity for gasoline, so that a 50%
increase in prices will produce a 5% drop in consumption.  Over the longer
run, people switch to higher efficiency vehicles and their consumption
levels stay flat.  This is related to "Jevon's paradox", which is
that increased efficiency can actually promote increased consumption,
because the greater efficiency lowers the relative cost of the resource
being consumed.  See
<http://www.ncseonline.org/nle/crsreports/energy/eng-80.cfm?&CFID=11262148&CFTOKEN=7028302>.

Hal