I took a crack this morning at explaining, by example, three things that are currently going on in our U.S. energy economy. The first is the way gasoline consumption has remained depressed, even as prices dropped. The second is the way the drop in consumption has been disproportionately carried out by people near the bottom of the economic spectrum. The third is the way that, even as prices have dropped a lot in recent weeks, the decline in consumption has gotten steeper. Meet the students, as John uses them to work out his economics explaining skills:
You could think of Eric Peterson’s bike shop, tucked in a corner of the University of New Mexico’s gym, as the epicenter of the new energy economy.
When gasoline prices rise, people at the bottom of the economic spectrum — like, say, college students — feel it the most.
“We are poor,” said Peterson, the 27-year-old manager of the UNM Recreation Services Outdoor and Bicycle Shop. “Trust me.”
The key concept is “demand destruction” — when people switch to bikes or high-efficiency cars, they permanently use less gas — no matter the price…
I’ve seen the same patterns in Durango. Every tree downtown is a bike rack, and there won’t be any end-of-season sales on bikes this year – the shops already have room for the skis.
I think that demand can come back, but slowly – think about the car/truck/SUV sales from the early 80’s until now.
When I first saw that article, I had a couple of questions:
Is UNM doing anything to increase the number of bike racks?
Didn’t they give free bus passes to students, faculty and staff at UNM and CNM? That’s a lot of demand for gasoline.
How many of those folks are combining riding buses and bikes?
Michelle –
Good questions, both of them. The answers are “yes” and “yes”.
UNM’s transportation folks told me they’re working on the bike rack situation. And the bike-bus combination is showing big increases, especially on the no. 5 bus, the one that goes on the north side of campus along Lomas and serves the northeast heights. People are apparently riding their bikes down the hill to school in the morning, then throwing them on the bus for the ride home.