I happened to be reading some 2007 Congressional hearing on how to use social science techniques of persuasion to modify behavior with regards to energy usage. The introduction to the hearing outlines how much energy we use in homes and in cars.
In 2005, U.S. households consumed 21 quadrillion BTU (quad) of primary energy, accounting for 21 percent of total U.S. energy consumption. To put this in perspective, people in the United States consume 2.4 times as much energy at home as those in Western Europe, in large part because our homes are twice as large and not designed for energy efficiency, despite the availability of affordable technologies to make them so. Household vehicles account for an additional 14 quad or 14 percent of primary energy, resulting in an overall household total of more than one-third of annual U.S. energy consumption.
With homes and private cars using only about 35% of the energy used in the US I'm a little surprised that the total for those two uses isn't higher. In the US economy about 70% of GDP goes to consumption. So I expected a larger fraction of all energy usage would show up more clearly in the category of consumers. But the figures above tell us most of the energy we use is embodied in products and services we buy. We do not directly use most of the energy used to support us.
What I'd like to find: a breakdown of energy embodied in various categories of products we buy. How much energy goes into building a house in the first place? How much of the energy we use is to create and deliver the food we eat? If the price of oil or natural gas or electricity doubles which product costs will rise the most? Anyone have some good links that address these questions?
Among the many ways people are adjusting to higher fuel costs: more online shopping.
“With gas being such an issue, we know that mall traffic is down more than off-mall traffic,” said Mike Boylson, chief marketing officer for J. C. Penney, which had an 8.7 percent increase in Internet sales in the first quarter of this year.
That is in contrast to a 7.4 percent decrease in sales at stores open at least a year, known as same-store sales and a measure of retail health. “We see more people turning to online because it’s much more efficient in terms of time and money,” Mr. Boylson said.
Victoria’s Secret, too, has had an online sales increase. Its catalog and Internet sales were up 11 percent in the first quarter of this year while same-store sales declined 8 percent, according to Maggie Taylor, vice president, senior credit officer at Moody’s Investors Service.
Gap had an 11 percent decline in same-store sales in the first quarter, but a 21 percent increase in online sales.
People go on some errands to places that require their physical presence such as a dentist's office. Those sorts of trips are harder to avoid. But grocery store trips are especially interesting when it comes to energy savings because those trips are just to retrieve bags of goods and everyone needs to retrieve those bags of goods from a fairly small number of grocery stores. Each person drives to the store to buy food and then drives back. Well, I see my nearby neighbors at the local grocery store. We are all going to the same place and starting at nearby places. I happen to walk. But inside of the local store I have met multiple neighbors who all drove. That's a lot of duplication. Add in the labor of a delivery person and one vehicle trip could carry pre-ordered groceries to many homes. But the labor costs and the loss of ability to choose exactly what you want by sight still make that a rarely used option.
Even if the price of gasoline quadruples people will have many ways to keep going to grocery stores. They can just shift to smaller cars, make fewer trips to buy more at once, and maybe share rides with neighbors. But in theory neighborhood delivery could make a come-back. After all, only a few decades ago milk delivery trucks were commonplace. Why not grocery delivery trucks?
Even as high oil prices crimp airline orders for big passenger planes, business-jet sales are booming. Deliveries are expected to top 1,200 this year, the third consecutive record year for the industry, and most analysts predict the numbers will keep rising at least until 2010.
Who is buying all those planes, which start at around $3 million and can run well over $40 million? Many customers come from the growing ranks of the ultra-rich in Asia, the Middle East, and Russia.
This trend won't continue even 10 years. In the early years of the post-peak oil period revenues from oil sales will rise even as production and exports decline. Rising prices will cancel out the effects of fewer barrels sold. But once the decline gets further along revenues from oil sales will plummet and so will the money available for oil sheikhs to cruise around in private jets. Still, the private jet market will boom for longer than the commercial jet market before following the commercial jet market downward.
People with longer commutes from outer suburbs get more heavily hit when gasoline prices rise. High oil prices impact housing prices of outer suburbs more than in towns near urban cores.
In Atlanta, Philadelphia, San Francisco and Minneapolis, homes beyond the urban core have been falling in value faster than those within, according to an analysis by Moody’s Economy.com.
In Denver, housing prices in the urban core rose steadily from 2003 until late last year compared with previous years, before dipping nearly 5 percent in the last three months of last year, according to Economy.com. But house prices in the suburbs began falling earlier, in the middle of 2006, and then accelerated, dropping by 7 percent during the last three months of the year from a year earlier.
Of course, if you have the ability to telecommute then wait a few more years for even better deals on big houses on the exurban fringe. Though if you live in an area with extremes in temperatures the telecommuting won't let you escape the cost of heating and cooling. Still, that too will drive down the prices of houses. Bone up on ground sink heat pumps, types of insulation, and other ways to cut heating and air conditioning costs and you might find aways to make that country mansion affordable.
People who do not have to commute by car have experienced less of a hit from higher oil prices. Suburbanites have less money to spend on everything else when gasoline prices rise. Everything else includes housing.
Basic household arithmetic appears to be furthering the trend: In 2003, the average suburban household spent $1,422 a year on gasoline, according to the Bureau of Labor Statistics. By April of this year — when gas prices were about $3.60 a gallon— the same household was spending $3,196 a year, more than doubling consumption in dollar terms in less than five years.
I know people whose gasoline costs have gone up by four to five thousand dollars per year in the last decade. That they can manage to drive 60 or 70 or more miles each way in their commutes just amazes me. Their options for cutting their gasoline bills in half are pretty limited. For someone who is already getting 20 mpg only a couple of hybrids (the Toyota Prius and Honda Civic Hybrid) will at least double the mpg and cut their bills in half. Curiously, the Honda Civic CNG will cut costs more than the hybrids since natural gas is so cheap compared to gasoline. But a shorter range means very frequent fill-ups for high mileage drivers.
A lot fewer can move closer to work than want to do so. The high oil prices that spur people to move also reduce the value of their dwellings and so make it harder for them to buy something closer to work.
But moving isn't necessarily the right answer, especially now. The outlying communities where commuting costs are hitting hardest are also experiencing a larger decline in real estate values. Closer-in communities have fared better in the slump. For those looking to relocate, that would mean less money for the home they're selling and more money for the one they would buy.
Close-in communities also often have higher property taxes, and the act of moving is an enormous and expensive undertaking.
As a result, the adjustments in residence addresses will come slowly. Still, people do move. In the United States about 40 million people move per year according to the US Census Bureau. That's over 13% of the population.
Other options for reducing energy usage in order to cut costs can be done much more rapidly. People are cutting way back on discretionary travel and the tourist industry is going to take big hits as a result.
The chairman of the Caribbean Tourism Association says the airlines' moves are putting thousands of regional jobs and billions of dollars of investment at risk. Caribbean markets are especially susceptible to the cuts, he says, because struggling American Airlines handles a majority of traffic into the region. American recently announced that it's cutting its daily flights at its San Juan hub from 93 to 51 and will no longer serve Santo Domingo, Antigua, St Maarten, Aruba, or Samana from San Juan.
We can change how much we use cars faster than we can change the fuel efficiency of the cars in existence. We can drive less in many ways. We can move closer to work or choose a job closer to home. We can try go get permission to work from home at least part of the time or work longer hours fewer days of the week as a way to reduce distance driven to and from work. We can also car pool, ride in commuter vans, take mass transit such as buses or trains, or walk or bicycle or buy a scooter. We can also reduce optional driving and try to stop at more places on each errand run to reduce the number of errand trips we take.
What I wonder: Will employers do some of the adjusting for higher commuting costs by moving offices closer to the exurbs? Does it really make sense to move everyone closer to urban cores? Do all those jobs need to get concentrated in dense places? Or can businesses move at least some of their operations to office buildings closer to where people live?
What I also wonder: How fast will car fuel efficiency rise? If a Prius can get 45 mpg highway then why can't a subcompact hybrid get 55 or 60 mpg? Or why can't a 3 cylinder subcompact with direct injection on each cylinder get 45 to 50 mpg? Do safety standards preclude this in the United States due to weight needed to meet the safety standards? We used to have subcompact cars that fuel efficient back in the 80s and early 90s.
My advice: Get ahead of the changes driven by high fuel costs. Make decisions and make adjustments before you have to. Reduce your risks from high oil costs.
The analysis found that the steepest declines in home sale prices, between April 2007 and April 2008, occurred in the outer suburban ring, defined as Loudoun, Prince William and Frederick counties. The average price there dropped by $110,900, or 25 percent. The inner ring, Fairfax, Montgomery and Prince George's, had a decline of 3.2 percent. The core, defined as the District, Arlington County and Alexandria, experienced an increase of 3.4 percent.