Peak Oil Task Force Report - City of Bloomington - State of Indiana

Oil & Equity: The Impact of Fuel Costs on Households Budgets
People with lower incomes and those travelling great distances are the most vulnerable to
a decline in cheap oil. Subtracting out the large student population, the poverty rate of
Monroe County hovers somewhere around 26 percent. 149 The poverty rate for the nation
as a whole is 12.5 percent while Indiana’s rate is 12.3 percent.
In an effort to better understand what increased fuel prices mean for different income
brackets, it is instructive to look at average fuel efficiencies and fuel expenditures as
percentages of different income levels. Assuming that Monroe County residents drive
approximately 22.8 miles per person per day at an average efficiency of 20.3 miles per
gallon (MPG), 150 the following illustrates the per capita costs of ever‐increasing fuel prices.
Impact on Income: Increasing Fuel Prices at Average MPG & Average VMT
Price per Gallon $2.00 $3.00 $4.00 $5.00 $10
Costs per mile @ 20.3 average
MPG $0.10 $0.15 $0.20 $0.25 $0.49
Costs per capita per day @
22.8 miles per capita per day $2.25 $3.42 $4.56 $5.70 $11.17
Costs per person per year $819.90 $1,248.30 $1,664.40 $2,080.50 $4,077.78
Fuel expenses as % yearly per
capita income $27,935 151 2.94% 4.47% 5.96% 7.45% 14.60%
Fuel expenses as % yearly per
capita income $15,000 5.47% 8.32% 11.10% 13.87% 27.19%
Fuel expenses as % yearly per
capita income $6,000 152 13.67% 20.81% 27.74% 34.68% 67.96%
149 Identifying a poverty rate from residents in Monroe County is challenging, due to our significant student
population. The US Census puts the rate at 41.6 percent – a somewhat inflated rate. According to Todd Lare,
Executive Director of the South Central Community Action Program, even if you lowered the 41.6 percent
figure by 15 percent to account for the student population, it would leave more than a 26 percent poverty
figure among non‐university residents. Dann Denny, “40% of City in Poverty: US Census Bureau says Poverty
Increased Nearly 7% From 2006 to 2007,” Herald‐Times On‐line, September 13, 2008.
150 This is based on the US EPA’s computer model – MOBILE 6.2 ‐‐ for estimating emissions from highway
vehicles. http://www.epa.gov/oms/climate/420f05004.htm.
151 Monroe County 2006 personal per capita income.
152 Poverty level for household of three.
Report of the Bloomington Peak Oil Task Force
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