The term “Peak oil” refers to the impact of three very significant economic laws, namely:
- The Law of Increasing Returns to Scale tells us that a company or organization that increases the scale of its operations & activities will reduce average costs and increase revenues and profits;
- The Law of Increasing Relative Costs tells us that as production increases, costs will increase at a faster and faster rate until costs overwhelm returns;
- The Law of Diminishing Returns tells us that the availability of a product will decrease and its cost will increase over time as the supply decreases and production costs increase;
Once the ‘economic peak’ is reached the average cost of producing oil will continue to increase as the availability of oil will continue to decrease and the cost of production of oil will continue to increase.
For an analogy, one can consider a tree packed with fruit. Once the low-hanging fruit is picked, one needs tools – a stool, perhaps a ladder, perhaps even mechanized equipment like a lift truck. The cost of these tools (including the capital cost and the amount of energy required to use them, as well as the amount of pollution and waste products they generate) will increase. So will the time required to get the same amount of fruit. Finally, the further from the ground the fruit gets, the less sweet it tastes.
The arrival of a “peak” situation often results in a significant economic or industrial shock. The time period when the United States of America became a net oil importer (reaching its own localized “peak” oil) coincided with two major oil crises. When Indonesia became a net importer of oil, it reduced subsidies on oil products overnight and also withdrew from OPEC. Malaysia was expected to become a net importer of oil in 2011 or 2012 – meaning that it is quite possible that real-world oil prices (which are in the range of RM3.00 per litre and rising) will reach our shores soon.
So how is peak oil relevant to ‘peak car’, you might ask? Well, ‘peak car’ is much more of a psychological phenomenon not just an economic one – even though the economic principles are the same.
The key limiting factor in our cities is the amount of available space and the time it takes for the majority of the population to get to the city from the suburban areas. Then there are the variable factors to consider.
In general, larger vehicles take up more space than smaller ones, which take up more space than pedestrians. However, larger vehicles can be more efficient than smaller ones (for example if the larger vehicle is a bus or MPV full of people) – especially if they do not require temporary storage space (aka. parking) in the city.
Thus, the use of buses is more efficient than cars and permits more people to get into the city. However, buses are most often subject to the same congestion that private vehicles are. In addition there is the inconvenience of following a schedule, and being in public space vs. private space.
In that case, many people would prefer to drive themselves. In many cities, the government has invested in highways & other road “improvements” to encourage & support the needs of these drivers. This is effectively an attempt to increase the number of vehicles that enter the city. However, the effort will come against those basic and crucial economic laws, meaning that it will cost more and more to move the same amount of vehicles.
First you need to build a wider road. Then you need a 3 lane road. Then you need an expressway. Then that expressway needs to be elevated. Then you need to add tolls.
The ever-increasing costs of automotive transport have forced governments to make choices about their investments. In such situations, mass-Transit becomes more efficient and beneficial as an investment because it can move people further, faster, with greater convenience.
In the article below, Automotive writer Ian Law of the Toronto Star explains how the City of Toronto chose to stop investing in private automotive transport and start investing in mass-transit … and some of the issues & challenges faced then and now.
SPECIAL TO THE STAROver the last two elections, both civic and provincial, the phrase “the war on the car” has been dreamed up. Politicians have been quoted as promising to “end the war on the car.”
To me it is quite disturbing, as I believe most people have been confused by the issue and our politicians are taking advantage of it.
Personally, I thoroughly enjoy driving, except in rush hour stop-and-go traffic. I get my thrills from auto racing and teaching advanced driving and I am a certified “car nut.”
I obviously do not hate cars, so I believe I can discuss this from an unbiased view.
In the 1980s and ’90s, I worked in the road design section of the former Municipality of Metropolitan Toronto, now part of the amalgamated City of Toronto. I was in on a lot of the new or rebuilt road designs as an Engineering Technologist. As such, I was privy to information that the engineers and planners discussed with regards to new roads and designs.
In the 1980s, there were rehashed discussions around the Scarborough Expressway, which was to have run from the 401 to the Gardiner along the Scarborough railway corridor. The other major road project discussed was the Spadina Expressway, which now ends at Eglinton Ave. W.
Both projects (which were cancelled in the early 1970s by then-premier William Davis) had the objective of making access to downtown Toronto by personal vehicle as fast and as easy as possible.
I recall the planners expressing a legitimate concern about where all those vehicles were going to park once they got downtown and what would happen to traffic congestion in the downtown area with all those extra vehicles trying to find their destination and parking.
You can only put so many crackers into a box. Using a bigger spoon may allow you to fill the box quicker but you still can’t put more in than the physical capacity allows. This also applies to vehicles on the city roads.
The consensus was to curb the mega road projects and to push for mass transit and bike lanes to try to coerce motorists out of their personal vehicles.
This, I believe, was the beginning of what some politicians and motorists deemed to be “the war on the car.”
None of the designers or planners declared war against the car. They simply realized early on that there just wasn’t going to be enough room needed to park all those cars, or even drive them around downtown, as the city population grew.
Where Toronto dropped the ball was not going through with planned mass transit when it was needed. Subway lines were promised and then never built. Our mass transit never realized its potential and now it is sorely lacking.
Every time a budget for mass-transit spending was cut, the system became less convenient and less comfortable and is now overcrowded and slow.
As a result, motorists have not been enticed out of their private commuting sanctuary and into comfortable, reliable and efficient mass transit.
[TRANSIT: Sound familiar?]
The city is not car-friendly, but not because it “hates” cars but because it has outgrown cars. You just can’t have the mass of people we have now commuting into the city without hellish congestion unless we can rewrite the Laws of Physics and figure out how to cram more mass into a given volume without experiencing fusion.
Many years ago there was once a “rush hour,” and it actually lasted around an hour. Now, that “rush hour” runs for three to four hours each morning and afternoon. Some days, it just blends into one day-long rush.
Even the term “rush hour” is a misnomer, since when we are sitting in one we certainly are not rushing anywhere!
There never was a “war on the car.” We just have to understand that we can’t keep adding vehicles to a limited number of roads.
[TRANSIT: And building more roads is no longer an option.]
Our city is changing and we have to grow with the change. It’s not personal. It’s not us versus them. It is just fact.
Learning the lessons of Toronto (and by the way, we will have a major post on this topic one day) tells us that there is a functional limit to the amount of cars that can move around the city. You can build more expressways and get rid of bottlenecks – with the purpose of improving traffic flow – if you want to, but most of the time that traffic will simply flow to the next bottleneck.
Ring roads sound great because they divert a large amount of traffic from the city centre, but what happens when the entire ring fills up (hello, Jalan Tun Razak & MRRII) and congestion reaches total grid-lock (or in KL’s case, “ring-lock”).
Aside from the economic costs of congestion (wasted petrol, wasted petrol subsidy, increased wear & tear on cars and drivers, air pollution, wasted time, lost productivity, more time away from family), consider the social costs (reduced health, more stress, more time away from family, increased crime). That is why some people have reached the psychological limit when it comes to driving. This article below talks about the psychological side of “peak car” and we have included some of the very salient points. Of course there are many others, so do read the whole article.
Are we reaching ‘peak car’? (The Globe & Mail, 22 October 2011)
Experts say our love affair with the automobile is ending ….
The most detailed picture of the trend comes from the United States, where the distance driven by Americans per capita each year flatlined at the turn of the century and has been dropping for six years. ….
The data are similar in Europe, Australia and Japan. And, although Canada doesn’t keep national statistics on individual driving habits, Australian researcher Jeff Kenworthy has found that driving in the nation’s five largest cities, combined, declined by 1.7 per cent per capita from 1995 to 2006.
Adie Tomer, an infrastructure researcher at the Brookings Institution in Washington, D.C., was one of the first to spot the trend. “To me, it suggests we’ve started to hit this wall as far as how far and how much people are willing to drive,” he says.
people run up against what’s called the Marchetti Wall – the psychological barrier against spending more than about an hour getting to work or coming home.
The concept is named for a Venetian physicist named Cesare Marchetti, who posited not only that human beings instinctively adjust their lives to avoid travelling more than that amount every day, but that we’ve been doing so since the Neolithic era, even as modes and speeds of transportation have advanced.
Interesting, is it not? We know that transport is actually a form of communication, and that humans are hard-wired to prefer certain forms of communication over others. Is it possible that humans are also hard-wired to prefer certain types of activities and have instinctive time limits & perceptions of time?
TRANSIT recalls the common observation that “getting there” always seems to take longer than “getting back” … even if the distances are the same. Could that also be associated with our instinctive perceptions of time and distance?
So, now that we have said all that, we invite you to comment.
Have you or anyone you know reached the Marchetti Wall yet? If that has happened, what solution has been found? Was this solution an effective one?
Also, do you think that KL and the Klang Valley have reached ‘Peak Car’ yet? If not, do you think that ‘peak car’ is on the horizon, or just over the horizon?
As always, your feedback and comments are welcome!