High gas prices cut driving for 8th month: government

WASHINGTON Wed Aug 13, 2008 5:23pm EDT

A cyclist crosses the 14th Street Bridge connecting Washington DC (rear) to Virginia as she leaves U.S. capital June 11, 2008. REUTERS/Hyungwon Kang

A cyclist crosses the 14th Street Bridge connecting Washington DC (rear) to Virginia as she leaves U.S. capital June 11, 2008.

Credit: Reuters/Hyungwon Kang

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WASHINGTON (Reuters) - Americans scaled back their driving during June by almost 5 percent in response to soaring fuel costs, the government said on Wednesday -- a day after announcing the biggest six-month drop in U.S. petroleum demand in 26 years.

The Transportation Department said U.S. motorists drove 12.2 billion fewer miles in June compared to a year earlier, marking the eight month in a row that travel declined in the face of record gas prices as Americans change their driving habits, buy more fuel-efficient cars and switch to public transport.

"Changes in consumer behavior have essentially erased five years of growth in gasoline demand," the American Petroleum Institute said on Wednesday in a separate report that showed gasoline use during the first seven months of 2008 fell by 2.1 percent to the lowest level for the period in five years.

The impact of driving less was also reflected in new Energy Department data released on Tuesday that said total U.S. petroleum demand shrank by an average 800,000 barrels a day during the first half of this year, the biggest decline since 1982, because of soaring pump costs and a weak economy.

Since last November, U.S. motorists have driven 53.2 billion fewer miles than they did over the same period a year earlier, topping the 1970s total drop in U.S. miles traveled of 49.3 billion miles that was caused by several recessions and increases in gasoline prices over the decade.

The Transportation Department collects its highway data from more than 4,000 automatic traffic recorders operated around the clock by state agencies.

The presidential candidates have responded to voter angst over high gasoline prices by offering different solutions they claim will bring down short-term fuel costs.

Democrat Barack Obama wants to release 70 million barrels of crude from the U.S. emergency oil stockpile that he believes will immediately cut prices as more supplies are put into the market.

Republican John McCain wants to expand offshore drilling, which he says said would result in lower prices by sending a message to oil traders that the United States was serious about boosting domestic oil production.

The decline in miles traveled since last November has occurred the most in rural areas, where travel has fallen by 4 percent, compared to the 1.2 percent drop in urban miles traveled, the department detailed.

High fuel costs have the biggest effect on individuals in rural areas, who normally drive more and spend a larger share of their income on gasoline.

In response to soaring fuel prices, Americans appear to have given up their long love affair with big, gas-guzzling vehicles and are leaving them for cars that can save money at the pump.

U.S. automakers reported that car sales in July outpaced SUV and other light truck sales by 10 percentage points, with cars accounting for 55 percent of all vehicles sold.

Trucks sales had consistently made up the majority of vehicles sold between 1997 and 2007, until rising gasoline prices encouraged consumers to switch to cars with better fuel economy.

"Hopefully, the era of the Hummer and other gas guzzlers is over," said Daniel Weiss, energy expert at the Center for American Progress think thank in Washington.

Honda Motor Corp., the industry leader in fuel efficient cars, is expanding its fleet in 2009. "Small, fuel-efficient vehicles are not short-term strategies for Honda," Richard Colliver, executive vice president of Honda America said on Wednesday at a forum in Traverse City, Michigan.

"I do think there has been a shift in consumer preference here," said Tim Evans, energy analyst for Citi Futures Perspective. "Over the intermediate to longer-term, I don't think automakers are going to risk building as many SUVs."

Many Americans are giving up the car altogether to get to work and instead are using public transportation.

"Americans are beginning to drive less and less," Miami Mayor Manny Diaz, head of the U.S. Conference of Mayors, told Reuters. "America is beginning to change its habits, which I think is a good thing, and government investment ought to follow," he said, referring to more money for public transportation projects.

However, the downside of less driving for the government is fewer dollars to pay for highway projects and public transportation, which is funded by an 18.4 cent-per-gallon gasoline tax and a 24.4 cent-per-gallon diesel fuel tax.

(additional reporting by Soyoung Kim and David Bailey in Traverse City, Michigan and Rebekah Kebede and Martha Graybow in New York; Editing by John Picinich and David Wiessler)

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