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Here's Why Low Gas Prices Might Not Be Bad for the Environment

Plummeting prices at the pump might not lead to more automobile traffic, according to a government study and the long-term prospects for the electric vehicle sector.

by Laura Dattaro
Dec 29 2014, 11:05pm

Image via Flickr

American drivers are beginning to feel some relief at the pump. As 2014 comes to a close, the average national price for a gallon of gas, according to the American Automobile Association, is less than $2.30 — over a dollar less than in December of last year.

It's a scenario that has worried environmentalists, who fear cheaper gas will bring about more automobile trips. When there's more vehicles on the road, they point out, there's more air pollution, whether smog that clogs our respiratory systems or carbon dioxide that heats the atmosphere and oceans.

But according to a new report from the US Energy Information Administration (EIA), cheaper gas won't necessarily mean drivers spending more time on the road. Other factors, like an aging population that's driving less and a tendency among American youth to hold off on obtaining a drivers license, offset lower gas prices.

"It's really an economy and demographic story of why people are driving less," Timothy Hess, an analyst for EIA's monthly Short-Term Energy Outlook, told VICE News.

The impact of gas prices on demand, known as price elasticity, has dropped since the mid-1990s, when it took a 12 percent decrease in the price for a gallon of gas to raise vehicle miles traveled by one percent. Today, it takes a 25-50 percent price decrease to produce the same effect.

Taking into account price elasticity, EIA estimates that in 2015, even though gas prices will drop by 23 percent, gasoline consumption will remain essentially unchanged.

"The bigger effect of fuel prices is on the types of cars people purchase, rather than on the amount of travel they do," Tom Turrentine, a research anthropologist at the University of California Davis Institute of Transportation Studies, told VICE News.

As baby-boomers retire, fewer of them are driving to work. Widespread migration from suburbs to urban cores is also curbing American's driving habits And young people are opting to get their drivers licenses later — if at all.

This could be good news for environmentalists and policymakers looking to reduce emissions. In 2012, the US transportation sector, which includes use of cars, trucks, ships, trains, and planes, emitted 1.7 billion metric tons of carbon dioxide, accounting for 28 percent of the country's overall greenhouse gas emissions, second only to electricity production.

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EIA is expecting a small increase ? less than half a percent ? in emissions from petroleum consumption in 2015, Hess said. But the trends in driving miles indicate cars won't be to blame.

"That would imply that relatively little is related to gasoline, and most of the small increase we're seeing is coming from other sources," Hess told VICE News.

US fossil fuel emissions dropped 2.5 percent from 2010 to 2011 and another 3.8 percent the following year. The US Environmental Protection Agency identified increases in gas prices as a "major factor" in the decrease of energy consumption across the transportation sector.

But times have changed. Any increase in vehicle mileage from lower prices will be offset by increased fuel efficiency — even in the largest of vehicles once thought of as gas-guzzlers.

"If you drive a Prius and the price of fuel goes down, you probably aren't feeling it," Turrentine told VICE News. "The cost of fuel relative to other costs of travel is getting very small, almost insignificant."

A 2015 Prius will get its owner up to 51 miles per gallon — a big improvement over the 2013 average of about 24 miles per gallon.

"Some people will choose to drive a little bit more because of the low prices, but you also have more fuel-efficient vehicles," Hess told VICE News. "So that offsets some of the gasoline consumption. All of these factors together generally point to balancing each other out and not much change in consumption over the next couple of years."

What might radically alter gasoline consumption, however, continues to be the rapid pace of innovations in the electric vehicle market. Tesla Motors announced last week that upgrades to its popular — albeit luxury-priced — Roadster will allow it to travel 400 miles on one charge of its electric battery.

In January, the company will attempt a nonstop drive from San Francisco to Los Angeles to demonstrate the versatility of the latest model — and the pace at which plug-in vehicle technology is advancing.

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Follow Laura Dattaro on Twitter: @ldattaro

Image via Flickr

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