The fuel consumption equation, and the long-term saturation of VMT, clearly shows the relevance of these new fuels and drivetrains, because it identifies the mechanism through which they could have a major impact upon reducing foreign petroleum dependence in the transportation sector.
In the quest to reduce petroleum dependence in the transportation sector, there are two key variables to consider: vehicle miles traveled (VMT) and fuel efficiency. Since the mid-2000s, many long-term growth factors of VMT—such as driver licensing rates, growth in female drivers, driver-licensing by age, and VMT per driver—have saturated. As a result, national VMT has, for the most part, stabilized since 2004, picking up slightly in 2013 and 2014 and receiving a bump recently from lower pump prices. VMT growth is likely to be much slower in the rest of the 2010s, 2020s, and 2030s, than during the 1950s through the 1990s when it grew very steeply. Other than general population growth, most VMT growth factors are saturated and will likely remain so.
Against this backdrop, there is an implicit shift to focusing on fuel efficiency as a key factor for understanding how petroleum dependence can be reduced in the future. To understand why this is so, it helps to look at the basic equation of fuel consumption:
Fuel Consumption = Vehicle-Miles Traveled (VMT)/Fuel-Efficiency (miles per gallon)
If the numerator is held constant, then by definition the denominator becomes the variable with the most leverage. If VMT will be relatively steady, then only changes in fuel efficiency can now have a dramatic effect upon fuel consumption. Any small increase in fleetwide fuel efficiency can have a relatively large impact on fuel consumption, and therefore a large increase in fuel efficiency can cause an extremely large reduction in fuel consumption. If fuel efficiency doubles, consumption is cut in half; if fuel-efficiency quadruples, consumption is reduced to one-quarter, and so forth.
Recent years have seen a maturation, in parallel, of many new drivetrains and fuels, many of which hold the promise of dramatically higher fuel efficiency. For instance, battery-powered and plugin electric vehicles, hybrid gasoline/EVs, hydrogen/electric vehicles, and other types of vehicles are now gaining readiness for mass marketing. Vehicles already available include affordable hybrids such as the Toyota Prius or Ford Focus, whose fuel economy can reach over 40 or 50 miles per gallon, more than a doubling of the current fleet-wide average for all motor vehicles. Even more encouraging, some vehicles that may gain large market share over the coming decades, such as pure electric vehicles, promise over 100 mpg fuel-efficiency on a gasoline-equivalent basis, as do hydrogen electric vehicles, while other types of innovative drivetrains also have the potential for high fuel-efficiency ratings.
The fuel consumption equation, and the long-term saturation of VMT, clearly shows the relevance of these new fuels and drivetrains, because it identifies the mechanism through which they could have a major impact upon reducing foreign petroleum dependence in the transportation sector. Any one of these new technologies, if they became widespread throughout the vehicle fleet, would substantially increase fuel-efficiency per mile driven, and thus reduce consumption of liquid gasoline and dependence upon foreign oil imports. VMT saturation transforms the advent of new vehicles, new drivetrains, new fuels—many of which are either here or right around the corner, and all of which promise significantly higher fuel efficiency—into potent factors that may prove highly effective at achieving reduced fossil fuel consumption.
Changes in fuel economy will be long term in that it takes about 20 years on average to turn over the entire vehicle fleet, and thus the increases in fuel efficiency are likely to happen only very gradually.
Change will be long term, however, in that it takes about 20 years on average to turn over the entire vehicle fleet, and thus the increases in fuel efficiency are likely to happen only very gradually. Nevertheless, improvement in fuel efficiency is an important variable to watch, given that it is a long-term secular trend that can significantly cut gasoline and diesel consumption.
How do we know that long-term VMT will be stable?
The arguments in favor of stricter fuel economy rest partly on the assumption that long-term VMT will grow at a very slow rate, or will remain relatively stable.
The arguments in favor of stricter fuel economy rest partly on the assumption that long-term VMT will grow at a very slow rate, or will remain relatively stable. This is likely to occur, as noted in research originally published in a Fuels Institute report from December 2014, Driver Demographics: The American Population’s Effect on Vehicle Travel and Fuel Demand, and available here. This report analyzed six decades of demographic data on America’s drivers, mostly sourced from the National Household Travel Survey, Federal Highway Administration, U.S. Census Bureau, and Bureau of Labor Statistics, and concluded that other than general population growth, all the major causes of the steep growth in VMT from 1950 through 2004 have now been exhausted. These factors have stabilized by reaching logical or “natural” limits beyond which they cannot grow much further. Three of the stabilized growth factors, identified in the Driver Demographics report, include:
- Drivers per adult population
- Female drivers
- VMT per driver
First, it is important to look at the long-term VMT growth curve, to graphically portray its stabilization. This can be seen in Figure 1. Data are available only through 2014, from the Federal Highway Administration’s annual “Highway Statistics Series,” which is published with a two-year lag after data collection. Provisional data shows VMT rising to record levels in 2016, but it’s likely that is a short-term bump rather than the start of another round of sharp growth.
Figure 1 shows that from 1949, there was a long, nearly uninterrupted growth in VMT, only slowed down slightly during the Middle East oil crises of 1973 (Yom Kippur War) and 1979 (Iranian Revolution), when oil prices spiked as a result of OPEC supply manipulation. Other than these two blips, growth in VMT was steep and continuous, until it stabilized in 2004 at approximately three trillion annual national VMT. While the graph does show a very slight increase in VMT in 2013 and 2014, this increase has been very small, and has not fundamentally moved very much from the plateau of 3.0 trillion.
In framing a structured way to determine what might stabilize a complex variable like VMT, which has many inputs, it can be helpful to look at a very simple equation:
VMT = (Number of Drivers) (VMT per driver)
Both key variables—drivers and VMT per driver—have stabilized since 2004 or even earlier, thus leading to overall VMT stabilization.
Number of drivers reached a stable plateau per capita
For drivers, the number of licensed drivers per adult population has reached a consistent plateau since the early 1980s. This can be seen in Figure 2.
Just as with the overall VMT curve, there was a steep increase for several decades in the percentage of licensed drivers in the U.S. population, followed by an evening out.
Driver Licensing and Gender: Female Drivers as Nonrepeatable Growth Trend
Why has the total amount of licensed drivers stabilized? One of the most basic demographic variables is gender, and it goes a long way toward explaining this stabilization. Figure 3 shows driver licensing rates of males and females between 1964 and 2014.
Figure 3 shows that the rate of driver licensing for female drivers has increased from 59% in 1964, to a plateau of approximately 85% since the mid-1990s. At the same time, the proportion of male driver licensing has dropped from the near-universal 97% rate of 1964, to the still-high, but much lower rate of 88% in 2014.
Female driving appears to have settled at a multi-decade plateau, strongly suggesting that every female who wants a driver’s license already has one. The falling rate of male driver licensing strongly suggests that a driver’s license is no longer the universal male requirement that it once was. Nevertheless, the data show that there is high and constant demand for driver licensing at roughly 88% of the male adult population.
The number of female drivers, however, merits special mention. The increase from 59% to 84%, in parallel with population growth, reflects an increase in real numbers of tens of millions of female drivers. This heavy addition to the driving population cannot be replicated, from a gender perspective, during the next several decades in the manner of the previous decades, because the proportion of female drivers cannot logically exceed 100%. Moreover, it appears from past data to unlikely exceed 90. Thus the long-run plateau in the rate of female driver licensing represents a major nonrepeatable growth factor for VMT.
Driver licensing and age: long-Run plateau in most cohorts
The number of drivers can be further broken out according to driver licensing by age. In the Fuels Institute’s Driver Demographics report, the research shows that driver licensing by age has steadied at constant levels for nearly every age group since the mid-1980s, in the 80% to low-90% range. As a result, these populations are very close to their full capacity, and long-term stabilization at these rates strongly suggest that age-based percentages of driver licensing have reached their “natural level.”
VMT per driver: long-run plateau after doubling between 1950 – 2004
Finally, the other component of VMT, besides the number of drivers, is VMT per driver. Increases in VMT per driver have been a major cause of the shape of the long-run VMT curve. Figure 4 shows VMT per driver since 1949.
VMT per driver enjoyed a spectacular rate of increase over a half-century time span, more than doubling from 7,155 per driver, per year, in 1949, to a peak of 14,907 per driver, per year in 2004, before settling to 14,132 in 2014. The fact that VMT per driver had already doubled before peaking close to 15,000 and then settling for a decade strongly suggests that it has hit a long-run “natural level.” One of the major growth factors during this period was a national transition from an urban geography of density and compactness to a metropolitan geography of low-density sprawl, but this geographic shift has mostly been completed.
It seems extremely unlikely, barring some unforeseen new paradigm, that VMT per driver could double again during the next half-century.
It seems extremely unlikely, barring some unforeseen new paradigm, that VMT per driver could double again during the next half-century, nor that it could even increase another, say, 7,000 per driver per year in that timespan. While not impossible, it seems that VMT per driver is a non-infinite growth factor which must at some point reach a natural plateau where it remains for many years. If this hypothesis is true, then it would constitute a major drag on the long-run future growth of the national U.S. VMT curve.
Only one remaining VMT growth factor: general population growth
In all, the national annual VMT will remain relatively stable for the foreseeable future. On nearly every axis examined in the Fuels Institute age, gender, income, wealth, employment, vehicle ownership—long-run natural stabilization levels appear to have occurred.
This means, that for future population growth, which is expected by the U.S. Census Bureau to continue at roughly 2 million persons per year through 2060, VMT will grow at a relatively fixed rate, instead of the increasing rate per population at which it grew from 1949 through 2004. Against this backdrop, population growth itself becomes the one remaining growth factor of VMT. This can lead to significant continued aggregate VMT growth. But population growth with a fixed rate of VMT growth per capita will lead, arithmetically, to a lower rate of VMT growth than population growth with an increasing rate of VMT growth per capita.
VMT stability means fuel efficiency rises in importance
Stable VMT means that any factor which can increase fuel efficiency—be it new drive-trains, new fuels, car-sharing, or some other development—can have a major impact upon total fuel consumption.
Consequently, in this environment of relatively stable or slow-growth VMT, fuel efficiency attains new importance in terms of estimating future national fuel consumption. A stable VMT means that any factor which can increase fuel efficiency—be it new drive-trains, new fuels, car-sharing, or some other development—can have a major impact upon total fuel consumption. The higher fuel efficiency could act as a “lever” to transform the relatively stable level of VMT into a shrinking level of fuel consumption. As time moves forward, this should be kept in mind by policymakers, business executives, environmental groups, and any other interested party.