Fuel thirst deepens despite more mass transit

NEW YORK Fri Aug 3, 2007 1:04pm EDT

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NEW YORK (Reuters) - Lofty gasoline prices have helped push public transit ridership to the highest level since the country spawned its highway system in the 1950s -- but the growth is not enough to drive down demand for motor fuel any time soon.

U.S. public transportation use rose to 10.1 billion rides last year, the most since 1957, when President Dwight Eisenhower signed the interstate highway bill into law, according to the American Public Transportation Association, an industry group.

The trend toward public transit has been driven in part by high retail gasoline prices, which have hit levels above $3 per gallon each summer since hurricanes damaged oil production and refineries along the Gulf of Mexico in 2005.

Ridership grew nearly 3 percent last year, an acceleration from the 30 percent it grew since 1995.

"There's no question, with the price of gasoline where it is, you're seeing people testing the transit waters and finding out whether it works for them or not," Alan Pisarski, author of the "Commuting in America" series for the National Academies, said in an interview.

Average U.S. gasoline prices have fallen under $3 per gallon since hitting a record $3.23 in late May, according to auto club AAA, but they could stay relatively high, with U.S. oil futures hitting a record $78.77 per barrel on Wednesday.

Ridership is up mostly in growing cities in the West, like Los Angeles and Las Vegas.

"Even in places of the country that we think of as more where the auto is king... we're getting a lot more trips by public transit, particularly as the price of fuel has gone up," said William Millar, president of APTA.

In addition, states from Pennsylvania and New Jersey to Oregon are pushing for ways to raise funds for public transport, such as raising turnpike fees.

In New York city, the country's top public transit hub, Mayor Michael Bloomberg is trying to set up "congestion pricing" in which drivers would be charged a fee to bring cars into the heart of Manhattan. That strategy has increased transit ridership in European cities.

GASOLINE DEMAND DRIVES HIGHER

Even so, the increase in transit use won't put the brakes on rising U.S. gasoline demand, mainly because only about 5 percent of workers who commute in a motorized vehicle use public transport, said Pisarski.

This year gasoline demand is running more than double 1957 levels, according to the Energy Information Administration. U.S. gasoline demand was more than 292 million barrels in May, the last month for which data was available, up from nearly 118 million barrels in May 1957.

Fuel demand is rising as car owners increase personal and business trips, said Pisarski. And people are increasingly both living and working in suburbs, a trend that is hard to service with public transport, he said.

While public transit may not stop the rise in fuel demand, its growth would be even higher without public transit, Millar said. Public transport saves 1.4 billion gallons of U.S. gasoline a year, he said, which translates to about 2.8 million barrels per month.

But fuel demand in the United States should continue to rise until cars are made more efficient. "That problem is going to be solved much more by modifying vehicles than in shifting people's behaviors to public transit," said Pisarski.

Taking public transit can save individuals money, however.

Miranda Brewer, for instance, a paralegal in Wilmington, Delaware, who used to drive a hybrid vehicle to work, switched last year to taking a bus.

"I got tired of paying to fill up once or twice a week," she said, adding that she puts the parking and fuel savings into her retirement plan.

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