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

The above table serves as a starting point to conduct a benchmark analysis. The goal of the
analysis is to determine how much fuel use would have to be cut by reducing VMT, or how
much fuel efficiency would have to increase with rising gas prices, to keep the percentage of
fuel expenses to income the same as in the table above at a gas price of $2.00 per gallon. As
illustrated above, at $2.00 per gallon and 22.8 VMT, fuel constitutes roughly the following
proportion of per capita income: 2.9 percent of $27,035/year; 5.47 of $15,000/year, and
13.7 percent of $6,000/year. The results are as follows:
• $5/gallon. At an average gas mileage of 20.3 MPG, and a gas price of $5 per gallon,
average miles driven would have to go down from 22.8 to 10 miles per capita per
day for the percentage of fuel expenditures to income to stay the same as they were
at $2.00 per gallon. That is a reduction in fuel use by 50.7 percent.
• $10/gallon. With an average gas mileage of 20.3 miles per gallon, and a gas price of
$10 per gallon, average miles would have to go down from 22.8 to 4.5 miles per
capita per day, for the percentage of fuel expenditures to income to stay the same as
they are at $2.00 per gallon. That is a reduction in fuel use by 78 percent.
• Maintaining Average VMT & Increased Economies. Assuming residents do not
cut back on driving and continue to average 22.8 miles per capita per day, at a price
of $5 per gallon, fuel economy would have to increase to 50 miles per gallon on
average for the percentage of fuel expenditures to income to stay the same as they
are at $2.00 per gallon and an average fuel efficiency of 20.3 miles per gallon. At a
fuel price of $10 per gallon, fuel economy would have to double again, to 100 miles
per gallon, for fuel expenditures to stay at the same percentages of income as they
are at $2.00 per gallon. Increasing the fuel economy for the whole vehicle fleet from
20.3 miles per gallon to 50 miles per gallon is ‐‐ at the current state of technology,
and based on the fact that it takes time to phase out and replace the existing vehicle
stock ‐‐ close to utopian within the next 5‐10 years.
Therefore, the most likely scenario is that people with lower incomes will have to respond
with drastic cuts in vehicle miles travelled, since they cannot increase substantially the
percentage of fuel expenditures as part of their income. People with higher incomes may
not cut down on trips as drastically, and take the edge off high fuel costs by buying more
fuel‐efficient new cars.
Report of the Bloomington Peak Oil Task Force
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