Secular Forces Driving the Two-Decade Decline of Per Capita Gasoline Consumption

As the Reston Task Force continues to contemplate what Reston ought to look like and the the so-called "stakeholders" in the Silver Line debate irrelevant political prejudices that jeopardize its future, Doug Short, a highly respected economist and chartist (with a really amazing background) who posts commentaries everyday for all to see reports on the two-decade decline in personal gasoline consumption and what they say about the US economy. 

At the core of his discussion is this chart which he explains this way:

The next chart adjusts the 12-month MA of sales volume for population growth based on the monthly data for Civilian Non-Institutional Population over age 16 from the Bureau of Labor Statistics, via the St. Louis FRED repository. What we see here is that gasoline sales on a per-capita basis is 4.2% lower than it was at the end of the Great Recession. The gallons-per-capita series includes the complete EIA data, but since I'm using the 12-month MA, the red line starts in 1984. We see the double peak in March 1989 (the all-time high) and August 1990. The latest per-capita daily average is 17.8% below the 1989 high.

 

What does this analysis suggest about the state of the economy? From an official standpoint, the Great Recession ended 30 months before the most recent gasoline sales monthly data point. But if we want a simple confirmation that the economy is in recovery, gasoline sales continues to be the wrong place to look.

In addition to improvements in fuel efficiency, the decline in gasoline consumption is probably attributable in large part to some powerful secular changes in the US (emphasis added):

• The demographics of an aging population leaving the workforce, which we also see in the sustained contraction in the employment-population ratio
  
• A growing trend toward a portable workplace and the ability to work from home (I'm a typical example)
  
• The rise of social media (Internet apps, games, the ubiquitous cell phone for talk and texting) as alternatives to face-to-face interaction requiring transportation.

We are indeed living in interesting times.

Although the role of the aging population as a driver of reduced gasoline purchases may fade in the multi-decade horizons of community and Metrorail planning, the explosion of the portable workplace and use of social media is only beginning to undermine the importance of the daily commute and even household tasks. 

The continuation of those trends suggests that the demand for office space will not grow as it has in the passed, if for no other reason than "office cramming" reducing employee space requirements from the 300 GSF the task force is forecasting to the the 110-180 GSF the office market is currently experiencing. And that doesn't count the employees who, while working full time, actually go their company office only occasionally.

I know the Reston Task Force has not made the adjustment in its thinking about office space needed in the future, meaning it is likely to allow far more office space than is needed.  At the same time, it remains unclear that MWAA and CDM Smith have made any allowance for a future in which workers travel less frequently to work and, indeed, families do more of their shopping from home.   The risk is that the currently forecast skyrocketing tolls on the Dulles Toll Road will actually need to climb much higher as demand underwhelms--not just because people can't or won't pay the toll, but because people just don't travel as much.

As Doug Short says, "We are indeed living in interesting times."