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By admin, on June 21st, 2009 I’m reading an excellent book at the moment – Resilient Cities by Peter Newman, Timothy Beatley and Heather Boyer. I commented on this book a few posts ago, with particular reference to how pathetic our preparedness for peak oil is and how stupid Treasury’s oil price predictions are. I have just got up to reading the chapter which relates to transportation issues, and there are certainly some interesting points in it.
The basic premise is that for a city’s transportation system to be resilient – that is to be able to adapt to the changing world that we face over the next few decades – it simply can’t be as auto-dependent as many American cities, as well as Auckland, are at the moment. Whilst electric cars may come along and be the answer to our problems at some point in the future, to properly ensure that the effects of peak oil and climate change are not too horrific there is simply no alternative to making cities more public transport oriented.
One point that I found particularly interesting, before I get on to explaining the pointlessness of building more motorways, is the relationship between increased public transport use and decreased car use. Often it is simply thought of as a one-to-one relationship: that each increased ride for public transport is one fewer trip made in the car. However, it appears as though the relationship is actually stronger than that: that “there is an exponential relationship between increased transit use and declining car use.” This is further explained:
This helps explain why use of cars by inner-city residents in Melbourne is ten times lower than that of fringe residents, though transit use by inner-city residents is only three times greater. The reason is that when people commit to transit, they may sell a car and even more closer to the transit, eventually leading to lan use that is considerably less car dependent.
It is probably too early to tell, but perhaps it is this phenomenon that goes some way towards explaining some of the traffic patterns around Auckland over the last year and a bit. After the Northern Busway opened last year there was a significant increase in the number of people using public transport on the North Shore, but a far MORE significant decrease in the number of people driving across the Harbour Bridge each day. Clearly, rising petrol prices had a lot to do with lower car use (perhaps fewer discretionary trips were made), but perhaps people were starting to realise that with the Northern Busway in place they no longer had to live such auto-dependent lives. Over time, especially if we see some intensification around the busway stations, we may actually see this trend continue quite significantly.
Anyway, onto the main purpose of this post: to question whether building motorways really actually ends up achieving the purpose of what they were trying to achieve. Now, for a start, I must say that having spent a decent amount of today driving around on Auckland’s motorways I definitely do see a use for them: in shifting people around long-distances within the city fairly quickly – especially on weekends when the traffic flows are less concentrated and more all over the place. However, as I am certainly not advocating we get rid of any of Auckland’s current motorways, the question is mainly around “should more be built?” While Resilient Cities doesn’t mention Auckland specifically, some of the points it makes would certainly apply here – especially when considering many of the arguments put forward in support of the Waterview Connection.
Now, motorways are usually proposed to help ease congestion, and are considered to save time, fuel and emissions by avoiding the stop-start nature of driving on local roads. As we all know, cost-benefit analyses are used to justify motorways, largely based on these ideas. Resilient Cities strongly questions the supposed benefits of this approach to justifying the money that is sunk into motorway projects:
Will it really save fuel to build freeways? No, the data do not support these contentions. The data show that cities with higher average speeds use more fuel per capita as the faster roads just mean people travel farther and more frequently by car. Is congestion associated with higher fuel use in cities? No, on the contrary those cities with lower congestion use the most fuel. Although individual vehicles in less congested cities are moving more efficiently they are being used much more often and for longer distances while greener modes are being used less.
In my opinion this is the crux of the issue, at least to some extent, in that induced demand is often ignored when planning road development. Furthermore, by ‘demonising’ congestion, we ignore the fact that congestion is actually a pretty good indicator that we need to offer better alternatives to the car: rather than just providing more capacity for cars. It is congestion of the road system that – as long as alternatives are available – will give people the incentive to use those alternatives. We needn’t destroy our cities by fighting and endless battle of providing more capacity, watching that fill up, having to provide more capacity and then watching that fill up too. This is further elaborated upon in Resilient Cities:
Is removing congestion always a good thing? Not if it is attempted by increasing road capacity; car use will increase to quickly fill the newly available space. The Texas Transportation Institute, in a study of US cities over the past thirty years, found no difference in the levels of congestion between those cities that invested heavily in roads and those that did not. It is possible to make more car dependence and congestion out of a policy to improve traffic.
It certainly seems like this is the mistake Auckland has made over the past few decades – and in particular in the last decade where it seems like we’ve really tried to build our way out of congestion. Somewhat ironically, the only thing that has ever really had a major effect on reducing congestion in Auckland over the past decade has been rising petrol prices.
With $1.4 billion likely to be sunk into the Waterview Connection over the next few years, as well as $430 million on the Victoria Park Tunnel, $300+ million on the Manukau Harbour Crossing Project, $200 million on the Newmarket Viaduct replacement, around the same on the Hobsonville Deviation and the SH20-SH1 project, it’s pretty clear Auckland hasn’t yet learned that you cannot build your way out of congestion.
By admin, on June 19th, 2009 It’s certainly frustrating that inter-city passenger services in the North Island consist of one single train – the Overlander – which runs each way between Auckland and Wellington just the once. And even that’s only an “every day” service during the summer months, with the Overlander running just on Fridays, Saturday and Sundays at the moment.
So it’s quite good to hear that there are proposals to operate a train service between Auckland and Hamilton. The opportunity has arisen because the Silver Fern railcars that are now used (very infrequently from what I’ve seen) on Auckland commuter services will be freed up in the next month or so – and could therefore possibly be used by KiwiRail to run an inter-city commuter train between Hamilton and Auckland. This is what the Waikato Times article has to say:
The deal is far from done but a rough proposal is for a service leaving Hamilton between 6am and 6.30am and departing Auckland at 5.30pm. A suggested route is from Frankton with stops at The Base in Te Rapa, Huntly, Papatoetoe and stopping at either Britomart or Newmarket.
It certainly sounds fairly promising, although I am a tad worried that only running one service a day each way will doom it to failure. On the one hand, it makes sense to start small and get an idea of what level of demand is out there, but on the other hand I worry that the proposed times will really make it only useful for one type of user: someone who lives in Hamilton and works in Auckland. Now I’m sure there are people who do that, but at the same time I reckon there are also probably quite a lot of people who might want to take the trip for more touristy reasons, or for business meetings and so forth. Certainly, the road between Auckland and Hamilton is pretty busy throughout most of the day.
I guess one of the main reasons I worry that having only one train each way might doom the service to failure (even if it gets off the ground in the first place) is due to what we’ve seen with the Helensville train trial in Auckland. This operates with really only one trip each way a day (although you can catch the train back from Helensville to Auckland in the evening if you want to) and the super-early departure time from Helensville (6.32am) plus the late arrival time for the evening train back there (7.03pm) means that you would have to be a pretty dedicated train fan to bother with it.
Of course, Hamilton is a much larger place than Helensville, and I think the train trip from Auckland to Hamilton would only take about half an hour longer than the Auckland to Helensville one, but limiting the service to really only serve the needs of a select few people feels rather less than ideal. If two of the Silver Fern railcars were to run back and forth between Auckland and Hamilton throughout the day you could actually end up with a pretty good service – a train every two hours. I think that kind of frequency would truly make train travel seen as a viable alternative for people driving or flying between the two centres (yes, believe it or not there are flights between Auckland and Hamilton I think).
Anyway, there’s a meeting in Hamilton next week to put some pressure on the powers to be to at least stump up some money for a basic-level trial service. That would certainly be better than nothing.
By admin, on June 19th, 2009
By admin, on June 18th, 2009 I probably should have felt quite excited by the government’s announcement yesterday to encourage the uptake of electric cars by making them exempt from road user charges. After all, electric cars will undoubtedly play a big role in reducing our oil dependency and our CO2 emissions from the transportation sector. While electric cars are very much still a developing technology, they certainly offer more promise as a way of detaching ourselves from our oil-addiction than biofuels or hydrogen cars do. Furthermore, in New Zealand because we generate most of our electricity from non-emitting renewable sources, we’re not just shifting emissions from individual cars to coal or gas power plants (although we still are to some extent, as the share of New Zealand’s power generated by renewables has been declining over the past decade). This is outlined in the government’s press release:
“Combining highly efficient electric motors with our competitive advantage in renewable electricity generation will reduce the greenhouse gases produced by the transport sector, as well as the harmful emissions affecting air quality.”
Yet I feel underwhelmed by it, and in fact somewhat suspicious that Steven Joyce has an ulterior motive in making this announcement. There are a couple of quote in particular that highlight my suspicion, firstly:
The Government sees private vehicles continuing to be the most significant mode of transportation for most New Zealanders. Therefore it is important that we encourage the use of alternative fuel technologies in order to help meet our environmental obligations over time.
Although of course this is no surprise, it just reinforces the fact that Steven Joyce does not seem to see a mode-shift towards public transport as a way to help meet our environmental obligations (or reduce our oil dependency) as something worth mentioning. In fact it seems like he doesn’t actually think it’s possible. But the really telling quote comes later on, even though it’s actually used to justify the move:
“There are very few electric vehicles currently in the fleet and the forgone revenue costs will not be significant. This is about government supporting a new fuel technology and encouraging early adopters,” says Mr Joyce.
So, he’s making a big song and dance about how electric cars will play a crucial role in helping the transport sector reduce its CO2 emissions and help meet its “environmental obligations”, while at the same time he is saying that there are very very few electric vehicles at the moment, so it really won’t make a difference (to costs, but arguably to anything).
I imagine for the next few years any time someone trots out questions about how the government’s transport spending, which is stuck in a 1950s time-warp, will respond to the issues of climate change and peak oil, Steven Joyce will simply mention this well-meaning, but ultimately pretty negligible, policy change. It does seem to be little more than an excuse to plow ahead with his pro-roads agenda.
By admin, on June 17th, 2009
By admin, on June 16th, 2009 Well I have finally got around to finishing my submission on the Super City legislation. I posted part one of my submission a while back, and here’s the rest of it:
Section 11 – Status of Local Boards
Comment:
This section of the proposed Bill highlights the complete lack of power that the local boards are proposed to have. With such a large over-arching ‘Super-City’ council, I consider it essential that the local boards have a level of power that sits somewhere between that of current Community Boards and City/District Councils. However, the legislation – by stating that a local board is not (even) a Community Board – clearly views the local boards as having little, if any, role to play in Auckland’s local government. In my opinion this is unacceptable and needs to be altered.
Section 11(3) further removes any power from the local boards, as they will be unable to employ staff or have permanent facilities in which to operate. This further confines them to the status of “lobby group”.
Much of what I have outlined in response to Section 10 of the proposed Bill is also valid with regards to Section 11, in that I believe it is crucial the local boards are given greater powers to provide local services and to influence the decision making process of the Auckland Council.
Suggested Alterations:
1) Local boards should not simply be unincorporated bodies with no legal standing. They should have a level of power that sits between current Community Boards and City/District Councils and this could be reflected in their legal standing. An update to the Local Government Act to reflect their standing is likely to be necessary.
2) The local boards should be allowed (and encouraged) to own property and appoint staff. This is the only way that these local boards will have the ability to effectively carry out their functions and to develop priorities for their area that the Auckland Council should be required to give effect to.
Section 12 – Membership of Local Boards
Comment:
The only comment that I have with regards to this section of the Bill is that it should reflect the alterations to Section 8 that I have suggested above. In particular, the local board boundaries should be matched with council ward boundaries. Therefore, in my opinion, the councillor representing the area of the local board should be considered a member of the local board too. This would encourage better integration between the local boards and the Auckland Council, and help ensure the Auckland Council gives effect to the priorities of the local boards for their respective areas.
Suggested Alterations:
1) The councillor representing the area of the local board should be considered a member of that local board too.
Section 13 – Functions, Duties and Powers of Local Boards
Comment:
Like Sections 10 and 11 of the Bill, this section outlines how powerless the local boards are. All parts of Section 13(1) merely outline that the local boards should be a lobby group to the Auckland Council on behalf of their area – and not an effective part of the local government structure delivering services to local communities or having any power to make decisions that affect their local communities.
It is essential that the local boards have powers that are enshrined in this legislation, and also that they have the capability to carry out those powers. This means that they must be able to employ staff and own property where those staff will be located.
There are some obvious council services that should be provided by the local boards, rather than by the Auckland Council. These include footpath upgrades, parks management, rubbish collection and specific local projects such as the development of new swimming pools or libraries. Local boards should also have the ability to apply a targeted rate to their area to fund projects that have not been prioritised by the Auckland Council.
It must be emphasised that the local boards will require the resources and staff to effectively undertake these services. Local boards should therefore be able to set their own budgets within a funding cap agreed upon with the Auckland Council.
Suggested alterations:
1) Local boards must have their functions, duties and powers clearly outlined in the legislation, and not just at the whim of what the Auckland Council delegates to them.
2) Local boards should have the ability to apply a targeted rate for a local project.
3) Local boards should be able to set their own budgets, within a funding cap agreed upon with the Auckland Council.
Section 15 – Delegations
Comment:
This section outlines what can and cannot be delegated from the Auckland Council to the local boards. As outlined in previous parts to my submission in my opinion council services and functions should be undertaken at the local level unless there is a good reason to undertake them at the regional level. This is the opposite assumption to what is outlined in the legislation.
I do consider that it is critical for Auckland to have strong local communities and to have local boards that actually have power and resources representing the local communities. The problem with this section of the bill is that it only talks about what the Auckland Council cannot delegate, and does not make any mention of what it must delegate to the local boards. This is one of the main justifications for calling the local boards, as they are outlined in this Bill, powerless.
Sections of this bill also outline how local boards are able to subcontract out all their responsibilities, thereby making it even more likely that the boards may become non-entities. This further erodes their power.
Suggested alterations:
1) There should be an assumption that services are carried out by the local board, unless there is good reason for the Auckland Council to carry out the service.
2) Services that the Auckland Council must delegate to the local boards should be outlined.
3) There should be some restrictions on what the local boards can subcontract.
Section 17 – Expenses of Local Boards
Comment:
In my opinion, this section should be altered to allow local boards to apply a targeted rate to their area that would fund a local project that the local board considers to be a priority, but which has not been prioritised by the Auckland Council.
I also consider that the local boards should be left to decide, to as great an extent as is practicable, how they spend the money allocated to them by the Auckland Council. This should be outlined in this section of the legislation.
Suggested Alterations:
1) Local boards should be allowed to apply targeted rates
2) The local boards should be allowed to decide how they spend the money allocated to them by the Auckland Council.
Conclusions
Overall, I do believe that the basic structure of local government that is proposed by the government has its merits. In my opinion, having two levels of council: a more powerful overarching regional body and a more localised community focused body, is the right approach for Auckland.
However, as my submission outlines, I have a number of concerns that relate to the specific details of the proposed legislation. In particular, I am concerned that the legislation – as currently worded – will not actually achieve the objectives of creating stronger regional governance while keeping the local in local government. I have proposed alterations to the legislation that, in my opinion, will assist in creating a more effective structure for Auckland’s local government. In particular, my changes relate to giving the local boards more power, eliminating at-large councillors from the Auckland Council and ensuring that ward boundaries align with both local board boundaries and electorate boundaries.
Finally, I would like to restate that I do believe the changes to Auckland’s local government the government eventually decides upon – the outcome of all three pieces of legislation – should be put to the people of Auckland as a referendum. The options on the referendum would simply be whether a voter wishes for Auckland to change to the proposed system or whether they wish to retain the current system. If voters wish to retain the current system then the legislation should provide for another referendum to be held in three years time on the issue, with changes made to the legislation in the meanwhile to respond to any changes sought by the people of Auckland.
By admin, on June 16th, 2009 About a month ago I had a look at the work the Auckland Regional Council’s Regional Transport Committee is doing in developing a new Regional Land Transport Strategy (RLTS). In particular, at the way in which their direction potentially represented a “quantum shift” in the future of Auckland’s transportation – just what is needed. To refresh the memories, the Transport Committee were looking at four options for the strategic direction the RLTS should be taking:
- Strategic Option 1 – Demand Management: Heavy use of factors which push people away from motor vehicle use (including road pricing) towards use of public transport (PT), walking and cycling. This would need to be supported by improvements to PT and walking and cycling to accommodate the diverted demand.
- Strategic Option 2 – Mixed Investment: Continuation of the current strategy of improvement in all modes, with some shift away from road investment.
- Strategic Option 3 – Change led by Public Transport (PT) Improvements: Heavy investment in PT infrastructure and services in order to ‘pull’ people from cars to PT, but some investment in roading.
- Strategic Option 4 – Quantum Shift: A combination of the “push” factors from Strategic Option 1 (congestion pricing and parking measures) with the “pull” factors of Strategic Option 3 together with a “what if” land use designed to maximise the opportunities for public transport, walking and cycling.
The Transport Committee’s June agenda follows up on the progress in deciding upon a prefered strategic direction (as well as detailing in the most user-unfriendly language possible other advances being made to the RLTS). The agenda states: “At its meeting of May 2009, the Regional Transport Committee (RTC) considered the evaluation of the four strategic options for development of the Auckland transport system previously agreed. The conclusion of that evaluation was that while each of the options would make progress towards at least some of the targets, none is likely to achieve all of the targets on its own.” It then outlines the proposed aspects of the prefered strategic direction:
 Now this is quite an interesting position for the Transport Committee to take, in that it’s a bit of everything really. We have some aspects of option 1, which focused on demand management, some of option two in terms of adding road network improvements, a commitment to some of the Metro network proposed by Parsons Brinkerhoff which made up option 3 and therefore some sort of commitment to the quantum shift outlined in option 4.
Some level of public consultation on this matter is set down by the Transport Committee to happen in July, so it will be interesting to see what information gets released – to let people form their opinions on what the best strategic direction would be. I’m a tad worried myself that my prefered “quantum shift” approach is being watered down by the ARC committing to funding additional roading capacity that I think just isn’t necessary. It’s also worrying what effect the revised Government Policy Statement for transport funding will have on the very public transport focused RLTS. I guess we’ll have to wait and see.
By admin, on June 15th, 2009 Ever since reading through the cost-benefit analysis of the Waterview Connection (the old full tunnel version, we don’t even know what the cost-benefit analysis of the newer version is) I have become somewhat skeptical of the ways in which we analyse the costs and benefits of various transportation projects. To refresh our memories, here is the basic CBA of the Waterview Connection (the full tunnel option): Now as I said above, this analysis is just for the full tunnel option – so the costs will be different to what has been chosen by the government as the preferred alignment. The construction costs will be a lot less, and I imagine the social and environmental costs will be higher. But that’s not really the issue here.
What I am much more interested in is how the benefits are calculated. How do we come up with $2.62 billion in time savings benefits? How do we work out $607 million of agglomeration benefits? How are the $690 million in congestion cost benefits different to the time-savings benefits? How can building a motorway actually create a CO2 benefit?
I have started digging into a few international transport policy journals to try and find out a bit more about international best-practice for making decisions on what transport projects should be built first, and more specifically how the estimated transport benefits of a particular project are calculated. One method is the New Approach to Appraisal (NATA) that is “a framework used to appraise transport projects and proposals in the United Kingdom”. This framework appears much more complex than the simple cost-benefit approach that is used in New Zealand, and includes a wide variety of effects (both positive and negative) that should be looked at when deciding whether to proceed with a transport project.
If we have a look into a bit more detail of what the NATA is, we can see that complexity:
Within the NATA framework, the impacts of transport projects are categorised in terms of five high level criteria (economy, safety, environment, accessibility and integration), reflecting the Government’s objectives for transport. Each of these criteria is divided into a number of sub-criteria and it is against each of these sub-criteria that the impacts of a proposal are assessed and presented in a 1 page Appraisal Summary Table (AST).The division of the five criteria is shown below:
1) Economy (Public Accounts, Transport Economic Efficiency: Business Users & Transport Providers, Transport Economic Efficiency: Consumers, Reliability, Wider Economic Impacts)
2) Safety (Accidents, Security)
3) Environment (Noise, Local Air Quality, Greenhouse Gases, Landscape, Townscape, Heritage of Historic Resources, Biodiversity, Water Environment, Physical Fitness, Journey Ambience)
4) Accessibility (Option values, Severance, Access to the Transport System)
5) Integration (Transport Interchange, Land-Use Policy, Other Government Policies)
Now I really am no expert on the details of how things are done in New Zealand (hence my numerous questions above) but it certainly seems as though we look into the first three criteria, but kind of get lost when it comes to accessibility and integration. Perhaps this is because our system is so focused on the road system, rather than public transport projects, so these issues aren’t seen as significant, but I am guessing that leaving out effects on accessibility and integration potentially plays a major role in how the analysis of transport projects in New Zealand seems to end up favouring expensive roading projects.
Further interesting analysis is available in a journal article in “Transport Policy” by A. Cundric, T. Kern and V. Rajkovic (can’t link for copyright reasons unfortunately) entitled: ‘A qualitative model for road investment appraisal.’ This article critiques the simplicity of the quantitative models that are currently used to analyse transport projects and their cost-effectiveness, and is particularly critical of the simple cost benefit analysis system that we see in New Zealand:
In the paper, we focus on road investments and firstly present an international overview of road appraisal methodologies which have been recently moving away from the traditional cost benefit analysis (CBA) estimating direct effects of road investment. These methodologies are thus evolving towards CBA that aims at monetising also some indirect effects and towards multi-criteria analysis (MCA) that aims at evaluating road projects by both quantitative and qualitative criteria.
After trying to make sense out of the “journal-speak”, I think what is importantly mentioned here is how the general trend of assessing the cost-effectiveness of a transport project (the appraisal process) is moving away from the cost-benefit system and its focus on direct effects.
I certainly have a lot more reading to do with regards to these issues, but it certainly seems to me that something’s broken in the way we look at transport projects in New Zealand – where it is somehow justifiable to spend the vast bulk of our transport funds on roading projects that are unsustainable in the medium to longer term due to oil price increases, and are unnecessary as demand for them is falling. It seems like the way we analyse the value for money from transport spending is as outdated as the thinking behind our general transport policies.
By admin, on June 14th, 2009 If one was to read through the “Government Policy Statement” for transport you would be convinced that our state highway system was bursting at the seams. As I have mentioned previously, the Government Policy Statement rips money out of just about every other area of transport funding in order to put around another billion dollars into funding state highways over the next three years. The GPS justifies this by saying:
A key component of the GPS that supports economic growth and productivity is to maintain investment in new and improved State highway infrastructure at 33 to 34 percent of the total fund over the ten-year horizon of the GPS. Based on current forecasts this will provide approximately $10.7 billion over the next ten years for State highway activity. The State highway network represents only 11.6 percent of the total road network, yet accounts for almost half of all kilometres driven each year by New Zealanders. The network links New Zealand’s town and cities and provides access to key transport hubs such as ports and airports. The heavy use of the State highway network highlights its importance for moving freight and people.
To embark on a logical thinking exercise, one would imagine that the area you are concentrating all this funding on must have some significant short-comings and also must be growing particularly quickly in terms of its popularity. Whilst it may well be true there are significant short-comings in the existing state highway system, I don’t think they’re particularly more obvious than short-comings in other parts of the transportation network. For example, if you were to ask people in Auckland whether the motorways or the rail network is in a ‘better state’, I can imagine most people would say the motorways. So we come to the second reason why it would make sense to put a lot of money into funding state highways – that they’re becoming more popular.
This is critical really, as transport funding – particularly for new projects and not just maintenance costs (for roads) or operational costs (for public transport) – is about the future. You don’t embark on a transport project to provide for how things were 10 years ago, you do a project to provide for how things will be in the future. Therefore, it’s important to look at what’s increasing and what’s decreasing – so you have a better idea about what’s going to be happening in the future. This is where the May 2009 Traffic Volumes Monthly Report by NZTA is very interesting indeed.
Straight off, one would expect in a recession that traffic volumes would not exactly be increasing at a fast rate, and the figures clearly spell that out to us: In May 2009, compared with May 2008, the monthly average daily traffic (MADT) for all vehicles had reduced by 1.6 percent; and the MADT for heavy vehicles also had a drop of 10.3 percent. So traffic volumes are definitely falling at the moment, and that’s particularly the case for heavy vehicles. I guess lower economic activity means less stuff having to be shifted around which means less heavy traffic – so that makes sense. For all traffic, perhaps fewer people are working and those that work on the road are driving less, so the drop by 1.6% makes some sense.
It’s the longer term trends that I find more interesting – what’s been happening over the last few years:
If we have a look at this information graphed, it shows some quite interesting trends. The most obvious is that heavy traffic has grown at a faster rate than all traffic over the past 20 years. I guess the neglect of our railway system has contributed to more and more freight traveling by truck, while economic growth and generally the fact that we have “more stuff” has also contributed to this rise. The next interesting thing is that over the past few years ‘all vehicles’ has really tapered off and was actually starting to decrease, while at the same time heavy traffic was still increasing. I do put this down to increasing petrol prices over the past few years: as higher prices will generally just be passed on by freight-movers to the consumer, whereas people just driving their cars around will take shorter trips, fewer trips or just not travel at all. This is clearly obvious in the statistics for the past few years – where petrol prices began to significantly increase from around 2005 onwards, the same time that vehicle growth seems to have stopped.
So last year it’s pretty obvious to see the effect of higher petrol prices – with general vehicle numbers falling quite significantly and heavy vehicle numbers staying pretty level. Carrying forward those figure into this year, it’s obviously still less than halfway through 2009 so I’m not sure what the final figures will show, but the figures above indicating a 1.6% fall in general traffic and a whopping 10% fall in heavy vehicle traffic show that the trends of the last few years are definitely not abating just because petrol is no longer $2 a litre or more. The diagram below shows how May 2009 compares with May 2008 across the six NZTA regions of New Zealand. Auckland and Northland make up region one:
And to give us some idea about how much the recession is hurting the trucking business, let’s have a look at heavy vehicle traffic levels for May 2009 versus May 2008: What all of these figures clearly show, in my opinion, are the following points:
- General traffic levels are highly influenced by petrol prices
- Heavy traffic levels are less influenced by petrol prices, but more influenced by economic activity
- Due to rising petrol prices, general traffic levels stopped their long-term increase in around 2005 and have been steady or declining ever since
- Heavy traffic levels were fairly immune to petrol price rises right through until 2008, which was a ‘flat’ year. The economic recession in 2009 is leading to significant reductions in heavy vehicle numbers
All in all, the most critical piece of information to take out of these statistics is simply that we are not driving more. Since 2005 the country has grown in population and has also increased in its economic productivity (although some of that growth is now being eaten away) but our traffic levels simply haven’t been increasing. I put this down to rising fuel costs, while in cities like Auckland I guess that (marginally) improved public transport can also take a bit of the credit for these reduced numbers.
So I ask Steven Joyce, quite seriously, why are we spending $10.7 billion on building more state highways over the next decade when our use of them is stable or declining?
By admin, on June 12th, 2009 A couple of days ago my latest purchase from Amazon, Resilient Cities by Peter Newman,Timothy Beatley and Heather Boyer, arrived. I’m only part way through it so far, but it certainly makes for an interesting read. Basically, the book looks at how cities should be altered to ensure they can best respond to Peak Oil and Climate Change over the next few decades – how they can become resilient to the significant changes that face us in the future. I have not quite got into the details of the solutions, but the problems are quite starkly outlined on page 32:
Climate change imperatives suggest reductions in greenhouse gases of at least 50 percent by 2050, from around 9GT of CO2 to around 4.5 GT of CO2 are needed worldwide.
Oil production is predicted to decline to approximately 15 billion barrels a year by 2050; a 50 percent reduction. Remarkably the two agenda of climate change and peak oil overlap precisely: 50 percent less by 2050.
One is demand driven, the other is supply driven. Either way, we have to find a way to reduce the need for these fuels. For oil, it will mean designing cities in which we drive 25 to 50 percent less. Trucking will carry 25 to 50 percent less freight and aviation will have even fewer planes. For our buildings it will mean 25 to 50 percent less fuel will be necessary for heating and cooling. Is this possible? What technologies will be needed to help make this happen? How will we rethink our cities to meet these goals?
In my opinion it is transportation that is the biggest challenge here. Most electricity in New Zealand is generated from renewables, and we certainly have the options – solar, wind, geothermal and tidal – to generate 100% of our electricity from renewables in the future. So that kind of covers the ‘buildings’ issue. Sure, we have Plug-in Hybrid Electric Vehicles (PHEVs) as a potential saviour in the future, but as this book states: “it will take 20 years to move a transport system into even a small proprtion of such vehicles and power systems.” What are we going to do in the meanwhile?
Leaving aside climate change for a bit, given the significance of the anticipated drop in oil production it’s interesting to have a little dig into what the government thinks of peak oil and how we might best respond to the challenges it presents. I guess the first step is to see what the government anticipates fuel prices to be over the next few years, as spiking fuel prices will be the most obvious and telling effect of peak oil and declining oil production. Helpfully, Treasury has included predictions of oil prices for the next few years in its Budget Economic and Fiscal Update. Page 10 of that document outlines shift in oil prices over the last few months – generally a recovery from the plunge that they took when the global economy turned to shit late last year:
Rudimentary signs of stability have also been evident in global markets. Share markets have recovered from their low point in early March and in some cases have recouped their 2009 losses, but remain well down on previous peaks. Commodity prices have also risen, with the Commodity Research Bureau futures index up 20% from its low in early March. West Texas Intermediate oil prices have increased from their low of US$34/barrel in February to just under US$60/barrel in early May and world prices for New Zealand’s major commodity exports rose in spot markets in March and April 2009. Financial markets have also shown some signs of stabilisation with a narrowing of spreads between interbank and effective policy rates, particularly in the US; safe-haven demand for US dollar-denominated assets has declined, and – combined with higher commodity prices – this has led to the appreciation of the New Zealand dollar from below US 50 cents in early March to above US 60 cents in early May.
Next stop is to have a look at page 36, which outlines the official Treasury prediction for oil prices over the next four years:
Oil prices – The average price of West Texas Intermediate (WTI) oil on a quarterly basis peaked at US$124/barrel in the June quarter of 2008 but had declined to US$43/barrel by the March 2009 quarter as demand fell with the slowing of the world economy. Based on the average futures prices for WTI oil in March 2009, it is assumed that the price of oil will gradually increase over time, reaching US$60/barrel by the end of 2010 and around US$68/barrel by the end of the forecast period. Over most of the forecast period the oil price assumption contained in the Budget Forecasts is approximately 20% below that assumed in the December Forecasts.
 There’s even an interesting diagram included, which graphs Treasury’s expectations for oil prices over the next few years, which I’ve included here. A few things to note (or alternatively, laugh at) about this diagram. Firstly, the predicted oil price in this estimate is 20% below what was estimated in December 2008. This is despite oil prices in May 2009 being around $20 a barrel more than they were in December 2008. Secondly, the forecasts are amazingly smooth and predictable. Never mind the volatility that the graph shows as having clearly occured since 2005, clearly the future will be nice and smooth and predictable. Clearly, the fact that oil production peaked in 2005 but demand, once it recovers from the current recession, will continue to increase will have no effect on the volatility of oil prices over the next four years. Well to me this argument sounds not only implausible, but actually incredibly reckless – given the potential effects of peak oil. Thirdly, and perhaps most embarrassingly for Treasury, if I take a couple of seconds to check on current oil prices, I find that they’re sitting at around $US72 a barrel. So according to Treasury, prices should increase slowly to reach around $US68 a barrel by 2013. But hold on, they’re currently $US4 a barrel more than that! In the middle of a recession! With demand significantly lower than it’s been for a number of years! As Homer Simpson would say: “D’oh”.
Keep in mind, this is New Zealand’s official prediction of oil prices over the next four years. This is the information that our response to peak oil will be officially based upon. This is the information that our transportation policies and their resilience to peak oil will be based upon (that explains a lot actually). This is pathetic.
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