We're driving less for first time in 25 years

Two years of record-high gasoline prices have forced auto-crazed Americans to do something they have not done in more than two decades: Drive less.

To the surprise of many economists, U.S. motorists cut the nation's per-driver mileage by 0.4 percent in 2005, ending a string of increases dating to 1980, government data show.

Other reports over the past year on mass-transit ridership, total miles driven nationwide, gasoline demand, vehicle sales, and retail and restaurant spending reinforce the notion that U.S. drivers made significant — and in some cases, lasting — adjustments to offset steadily rising gasoline prices.

Oil companies, however, need not fret too much. Even though the average number of miles driven per person is dropping slightly, U.S. gasoline consumption will keep chugging along for years because of population growth, a steady economy and longer commutes.

It's a small but important shift for a nation many believed was impervious to rising gas prices because drivers were unable or unwilling to rein in their gas-guzzling ways. Energy costs have generated such concern that President Bush devoted a significant chunk of his past two State of the Union speeches to addressing the nation's oil addiction.

"In 2005 and into 2006, we did see consumers start to change their driving behavior," said David Portalatin, director of industry analysis at NPD Group, which tracks consumer spending. "That's a very hard thing to change, because I've either got to change where I work, where I live, or what kind of car I drive in order to actually consume less gasoline."

Cambridge Energy Research Associates, a Boston-area consulting company, recently published an analysis called "Gasoline and the American People."

"The message is that price matters," Chairman Daniel Yergin said.

A sense of insecurity

The study highlighted the decline in per-driver mileage and a cooling appetite for the largest of sport-utility vehicles, among other things, and concluded that expensive gasoline was transforming "America's love affair with the automobile."

Even though gas prices have dropped substantially from their highs in 2006, "there's a greater sense of insecurity, and people don't want to be caught emptying their wallet at the gasoline pump," said Yergin, author of "The Prize," a Pulitzer-winning history of the oil industry.

In car-centric Los Angeles, ridership rose more than 6 percent on Metrolink trains and 5.7 percent on the buses and trains run by the Los Angeles Metropolitan Transportation Authority through the first nine months of the year.

"Usually, when gas prices go up and then come down, ridership would go up, then we would see it go back down, but this time we are keeping it," MTA spokesman Jose Ubaldo said. "It's amazing."

King County Metro Transit boasted that it hit a ridership record in 2006 with about 103.2 million passenger boardings, a 4.3 percent increase from 2005 and its highest ridership since 2000.

"The combination of more jobs and higher gas prices are likely the two biggest reasons we saw for more people riding the bus, but improved transit connections were also a factor," Metro General Manager Kevin Desmond said in a news release earlier this month.

Sound Transit's boardings on its express buses for November rose a little more than 5 percent — to 789,200 boardings — compared with a year earlier, according to the agency.

Short memories

While high prices cut into the expected growth rate for U.S. gasoline consumption, it nonetheless increased by about 1 percent in 2006 after staying flat the previous year. Gas prices declined toward the end of 2006.

"The gasoline consumed since that August peak in gasoline prices is up nearly 2.5 percent versus the comparable time period a year ago," said Portalatin, the NPD researcher. "What it means is that consumers have a short memory."

That response is what economists have come to expect. Decades of studies conclude that big spikes in gas prices produce only tiny short-term cutbacks in demand. If that research is any guide, whatever changes consumers made during the recent gas-price spikes would be wiped out by recently plunging prices.

But some transportation experts say that a handful of new factors also are starting to turn the tide, causing some consumption changes to stick despite lower prices.

Some believe drivers are reacting to the increasing volatility and the steady upward march of gasoline prices over the past few years.

After enjoying lower pump prices in 2001 and 2002, consumers saw the yearly average cost of gas jump by double-digits in each of the next four years.

Another reason is that the nation's baby boomers are getting older, and many are approaching retirement age. Older drivers tend to drive less, especially if they are freed from a daily commute. Today, more than 14 percent of U.S. drivers are over 65 — nearly double the level in 1980, according to the study by the Cambridge energy research group.

Energy-efficient options

And some consumers are increasingly driven to conserve fuel because of a growing uneasiness about the nation's addiction to oil, the instability of oil-rich countries and the harmful climate effects that stem from petroleum use.

All this has car companies rolling out new gas-electric hybrid vehicles and touting fuel efficiency at every opportunity, a sign that those companies believe the public's yen for saving gas is not a fleeting fancy.

Automakers "are keeping in mind that this is a real issue ... that they have to deal with," said Lonnie Miller, director of industry analysis at R.L. Polk, a Southfield, Mich., company that tracks vehicle sales.

William Millar, president of the American Public Transportation Association, has seen many cycles where mass-transit ridership grew as gas prices rose, only to crater afterward when fuel costs returned to more normal levels. But things are different now, he said.

"After Katrina, when many parts of the country saw prices above $3 a gallon, we saw an immediate increase in ridership," he said. Tulsa, Okla., which has a small bus system, saw ridership jump 28 percent for the nine months after Hurricane Katrina. "When you see it in places like that, it says to me that there's a fundamental shift going on."

As prices dropped, "some people went back to their cars," Millar said. "But I was pleasantly surprised by the breadth of the growth, and with the relatively small decline when prices went down."

Still driving too fast

Nationwide, trips on buses, rail and other public transit jumped the most when the average cost of gas topped $3 a gallon, according to figures from the trade group. But even with some subsequent drop-off, overall ridership was up nearly 3 percent through the first nine months of 2006, roughly double the typical annual increase, Millar said.

But Americans clearly have their limits when it comes to conserving fuel. One item that's definitely not on the to-do list: Driving slower. Several states have boosted highway speed limits over the past two years.

"I'm surprised that I see people driving at 75 or 80 miles an hour on [Interstate] 680 out here," Chevron Chief Executive David O'Reilly said during an August interview at the oil company's headquarters in San Ramon, Calif. "If they drove at 60 miles an hour, they'd save 5 percent or 10 percent of their gasoline consumption."

Times staff reporter Brian Alexander contributed to this report.