Price does matter. So does public perception of likely future prices. As it becomes increasingly clear that high gasoline prices are not a fluke, Americans are adjusting their driving habits.
March 2008 saw “the sharpest yearly drop for any month in FHWA history” of total vehicle miles traveled (aka VMT) according to the Federal Highway Administration’s monthly report on “Traffic Volume Trends” [PDF].
In March 2008, Americans drove 246 billion milles, compared to 257 billion in March 2007. Indeed, the March 2008 figure is lower than the March 2004 figure. To see just how remarkable that is, look at the annual vehicle-distance traveled data (in billions of miles) since 1983 (this is a moving 12-month total):
I wonder what will happen when gasoline hits $5 a gallon, and then $6, and then $7 in the coming years. Some of that will probably depend on whether we ever see a dip below $3 a gallon again. The longer prices stay high, the more people will start to make permanent adjustments in their driving — and then, ultimately, in where they live, and so on. The more they fluctuate, the more people can hold onto the slim hope that they will go down and stay down for a long time, as in the 1990s.
I think we could see one more dip down to $3, especially if there’s a global recession. But it seems hard to see how we can escape much higher prices over the next decade, given how we have refused for so long to adopt an intelligent energy policy. It will probably all come down to how quickly plug-in hybrids can scale up. Recent conversations have convinced me that could happen faster than I thought, but that is the subject of another blog post.