Driving the Limit: Wealthy Nations Maxed Out on Travel?

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Is the road trip over?

No matter what happens when summer vacation season kicks off this weekend—and indications are car travel will be down—researchers now think the world's most developed nations might have put the brakes on travel. Or, at least, on personal travel fueled by petroleum.

In the United States, Germany, Japan, and other countries that rank among the world's wealthiest, there are signs that driving has reached a kind of saturation point.

Until now, most projections for future energy use and transportation needs have taken for granted that there will always be more people owning more cars, driving farther and using more oil. But those assumptions are being put to the test by a profound change under way in the countries that have long been the world's biggest fuel consumers. And it goes beyond the payoff that is already being realized from government fuel economy efforts, like the U.S. government's announcement today of enhanced consumer labeling to promote efficient vehicles.

(Related Post: "New Fuel Economy Labels Mandated for U.S. Vehicles")

"The flattening of total per capita travel over so many countries has never been experienced," wrote Stanford University professors Adam Millard-Ball and Lee Schipper in research published earlier this year. Pointing to data they say suggests that driving has been tapped out for reasons beyond the economic slowdown or the price of gasoline, their paper asks whether some parts of the world have reached "peak travel."

Although many energy-watchers agree that such a trend appears to have taken hold in wealthy nations, they know that this shift will not solve the world's energy problems or slash fuel prices. While developed countries are becoming more efficient, those gains could be steamrolled by demand for oil in fast-developing nations like China, India and Brazil.

Still, the trend is important because it suggests that there may be a way—through government policy or international effort—to halt growth in oil consumption without causing economies to tank.

A Different Peak

The Memorial Day weekend at the end of May in the United States is the traditional kickoff not only of vacation season, but the high point in world oil consumption for the year. That's because cars in the United States account for about 12 percent of global oil consumption—the single largest slice of the pie.

Although cars still will be taking most U.S. holiday travelers to their destinations this weekend, the motor club AAA's projection of 30.9 million Memorial Day drivers on the roads is 100,000 fewer than last year. The annual survey by AAA and IHS Global Insight showed 40 percent of drivers said high gas prices (the U.S. average is up 40 percent over last year, to $3.91 per gallon) had affected their plans.

(Related Quiz: "What You Don't Know About Gas Prices")

But Millard-Ball and Schipper say they have tracked a long-term trend in the United States and seven other industrialized countries with roots that appear to be deeper than a response to oil prices or a slow economy. They describe it as "peak travel," a wry take on the concept of "peak oil"—the fiercely debated idea that the world has maxed out its ability to extract more oil. When it comes to transportation, have some parts of the world actually maxed out on their ability to consume oil?

"There are only so many minutes and miles in a day that people will travel," Schipper explained in an interview on the Stanford campus. Schipper, former director of research for the World Resources Institute's Center for Sustainable Transport (known as EMBARQ), believes higher fuel prices play only a part in what is happening. Time constraints, road congestion, aging populations, and taxes on vehicle ownership all appear to be combining to force a major shift in travel patterns.

According to Schipper and Millard-Ball's research, people living in Australia, Canada, France, Germany, Japan, Sweden, the United Kingdom, and the United States logged more and more motorized miles each year between 1970 and 2007. They looked not only at private vehicles, but also at travel by bus, local metro, streetcars, light trucks, and domestic air. Historically this type of activity has increased along with rising incomes. But the two scholars found that the link between greater prosperity and more travel activity broke down when economic development reached a certain level.

"Fuel economy is improving slowly, and travel isn't increasing," Schipper said. "That's a lot different than the old past where in the [United States], fuel economy was getting worse because a larger and larger share of cars on the road were SUVs, and travel was rising." Since 1990 in the United States, he added, "growth in car use, which used to parallel gross domestic product, has basically moved away."

In fact, Schipper and Millard-Ball's analysis of private vehicle use as well as mass transit and domestic air travel in the eight countries shows a leveling off of both total passenger travel and private car use between 2003 and 2008—all relative to GDP. "So the global economy slowdown is not the cause," Schipper said.

Electric Car Impact

The Stanford researchers are not the only ones focusing on the implications of declining travel energy demand. In 2009, analysts at the investment house Deutsche Bank declared "the end of the oil age" was on the horizon because of the turning point in fuel economy expected to result from adoption of electric and hybrid vehicles.

Disruptive electric car technology, hitting the world at the same time as an abundance of cheap natural gas to produce electricity, would cause global oil demand to peak in 2016, the Deutsche Bank analysts concluded. Although the researchers said the global oil price could reach as high as $175 per barrel by then, they predicted that in the latter half of this decade both world oil demand and prices would be in "a long, tandem decline."

But others believe that the global oil demand picture is far more complicated. Aaron Brady, director of the global oil group at IHS Cambridge Energy Research Associates in Cambridge, Massachusetts, agrees that part of the world has reached a plateau. In an email, he said his team believes the economically advanced nations that are part of the Organization for Economic Cooperation and Development (OECD) have "already seen the peak in total oil demand (and transportation in particular)." Fuel economy mandates, alternatives such as biofuels and electric vehicles, will slowly eat into the share of petroleum used in these countries' transport sector, at the same time that growth in miles traveled slows, he said.

(Related Story: "China's Electric Car Drive: Impressive, but Not Enough")

Globally, however, Brady said, passenger travel demands will increase for some distance down the road. "The key reason is the very strong demand growth in the developing world—the Chinas, Indias, Brazils of the world," he said. "These countries are reaching a development stage where large portions of their population are able to afford vehicles for the first time." He added that while efficiency gains are expected in these regions, "those gains will be swamped by increases in miles traveled."

What direction global oil demand takes, he explained, will in large part depend on how well developing countries take note of the governmental policy steps that have curbed demand in the OECD, such as fuel efficiency standards and taxation.

Decisions by the governments of India and China about subsidies for batteries and alternative vehicles, license plate rationing, congestion pricing, and road infrastructure investments over the next 20 to 30 years, Brady said, could "have very important impacts on the shape of demand over time."

(Related Story: "As Fuel Efficiency Evolves, So Do Fuel Taxes")

Schipper sees little choice in the matter. As population grows more dense and more cars hit the road in areas of developing countries that have little room for suburban sprawl, "large cities are grinding to a halt" due to congestion. The big challenge, he said, is to build—or rebuild—cities in a way that affords residents access to jobs, markets, education, and leisure with fewer cars and less driving.