Friday, May 23, 2008
US motorists are driving less; will history repeat itself as in the 1970s?
Remember how it was in late 1973, after the October Yom Kippur war? I found out about it at a social gathering in New York City (at the Ninth Street Center, the weekly potluck in the East Village then) after a Friday night camping trip at High Point State Park. Funny how details stick in your mind with history. In northern New Jersey, where I lived then, gas prices rose daily, and by the end of the year most gas stations were closed on weekend with “no gas” signs. Dictator Richard Nixon “ordered” gasoline stations to close on Sunday and told the nation on a November evening, “we may have to ration gasoline” in the same breath that he said “I’m not going to resign from the job I was elected to do.” I remember listening to that speech in a Tysons Corner VA Holiday Inn, as I traveled for Univac.
Then in many places they had even-odd rationing as for gasoline purchases. The government printed up ration tickets but didn’t use them, as it had during World War II, to save tire rubber. Several European countries started formal gasoline rationing Jan. 1, 1974. I remember driving to a New Years Eve party in North Jersey for GAANJ (some visitors remember all of this) and hearing the say on the radio, that for this New Year we looked into a glass, darkly, as Paul does in I Corinthians.
I traveled to Minnesota for Univac in early 1974, and rented a car, and had very little trouble with gas, unlike the East Coast. It all mysteriously cleared up in April, as soon as “the price was up.” We were no longer grounded.
At the beginning of 1979 I moved to Dallas, where the oil was, and yet there would be another oil crisis, because of Iran. There was a self-service station on Cedar Springs near my apartment (near the Tollway) that never closed, until the crisis intensified in the spring, and then it blew over, with the price up, of course. It seemed both times that the "blackmailed" economy would eventually adjust to higher oil prices, but only after recession and stagflation.
Chris Baltimore has a story today on Reuters (also published on Yahoo!) “March driving down for first time since 1979: government,” link here. That means that March 2008 is the first month that Americans drove less in a particular month than they had the same month one year before. It’s likely to continue in April and May.
This time, there is no talk of rationing, but the price is already way up. We've seen this cycle at least twice before in the 1970s, but this time the fundamentals may really be different. IEA is likely to come out with a report that we are tapping out on oil production. Oil companies will simply say government has to get off their backs and let them drill in exotic locations.
Yet, today, traffic in northern Virginia was heavy, with the usual bottlenecks on the Internstates and Beltway. Beach communities like Ocean City and Rehoboth expect brisk business, because many people will drive 150 miles for a long weekend even with high prices, and refills on the Eastern shore will be cheaper way from the major cities. But they won’t make the 400 mile trips. Florida resorts should do well if the beaches get enough local business. The same for northeastern beaches and some mountains, that are relatively close to major cities. P-town is farther from Boston than it looks.
Update: June 2, 2008
Evan Snyder, a technology person from the Seattle area with whom I corresponded on some Internet v. policy matters, has an interesting take on oil prices. He says he welcomes $10 a gallon gasoline, and gives this explanation. "Why I welcome higher gas prices" on his blog, here.