There’s an interesting report, written by the Manager of Transport Strategy Kevin Wright, in the agenda for Wednesday’s transport committee meeting that looks at congestion in Auckland. In terms of the headline issue, congestion, the report notes that congestion levels are around the same as they were in 2004 (despite how much we have spent on widening and extending motorways). Compared to most Australian cities, congestion in Auckland is relatively low – but at the same time travel time reliability is much poorer than our counterparts across the ditch.
Congestion measures are often flawed though, as for example a road completely free of congestion at all hours of the day probably means we were stupid and spent way too much money in it. It’s helpful to see the report note the limitations of measuring congestion and suggest some ways that assessing the impact of congestion could be done better:
Traffic congestion cannot be represented by a single indicator. To get a broader understanding of congestion, consideration needs to be given to:
- the needs of the user at different times of the day, and by location;
- the performance of the system in terms of the throughput of people and goods;
- the role of the transport system in the economic and social well-being of Auckland (including productivity, access and the costs of travel);
- the extent, intensity, variability (including reliability and predictability) and duration of congestion; and
- the extent to which transport options which can avoid congestion (rail, bus priority lanes, ferries etc.) are utilised.
To accurately assess the ‘impact’ of congestion, a combination of the level of congestion with the proportion of trips experiencing congestion needs to be assessed. For example, while Fanshawe Street in Auckland’s city centre is congested at peak times, approximately 80% of people travelling along Fanshawe Street in the peak are utilising the bus lanes and therefore able to avoid experiencing the delay and trip unreliability caused by congestion. This situation significantly lessens the impact of congestion along Fanshawe Street, even though congestion still exists for general traffic.
This idea of measuring the impact of congestion, rather than just reduced travel speeds for general vehicles compared to what they might be able to do in a theoretical “free-flow” scenario, which once again is nigh on impossible and financially reckless anyway, seems like a really positive step forward. If hardly anyone has to put up with congestion, then the extent to which it is something we need to worry about reduces.
Even more positively than this, the report also picks up on something we’ve talked about a lot on this blog in recent months – the slowing of traffic growth over the past few years. A table in the report highlights that since 2005 the growth of vehicle kilometres travelled on the state highway network in Auckland has slowed considerably (from 3.4% compound growth between 1998 and 2005 to around 1% compound growth since 2005): 
The report also includes the graph on state highway traffic volumes across New Zealand that we’ve often discussed – which shows a decline in volumes between 2005 and 2011: 
There’s some interesting discussion around whether this flat-lining is caused by long-term issues or short-term issues, which obviously has huge implications looking into the future. No call is made on whether traffic growth will simply return once the economy picks up again (although from memory the economy was doing OK between 2005 and 2007 yet the growth in traffic had already slowed by then) but possible long term shifts such as cultural change, whether we’ve reached a saturation level of travel, ageing populations and a renaissance of inner city living are all discussed, along with rising fuel prices, as reasons for the flat-lining. There’s also a graph that highlights New Zealand is not alone in experiencing this phenomenon: 
The scary implications of all this is highlighted right at the end of the report.
Modelling of future land use and transport scenarios for Auckland forecasts approximately 46% increase in motor vehicle use between 2011 and 2041 assuming full implementation of the transport programme and a high population growth forecast. Modelling takes into account expected population growth, increases in economic activity, increases in fuel prices and traditional travel preferences.
Distinguishing between the ‘short-term’ and ‘long-term’ causes of these recent trends is necessary to determine whether, once the global economy recovers, historical traffic growth trends will return or not. If longer term causes of the recent trends are significant, then future forecasts of vehicle demand may need to be revisited.
If we’re basing the spending of billions upon billions of dollars of money on transport projects over the next 30 years on projections which ignore possible longer term shifts in preferences away from travelling by car, then that seems like a pretty obvious thing to be looking into.
While NZTA and the Ministry of Transport remain in blissful ignorance of all this, it’s somewhat heartening to see that the Council recognises this as a key issue that could fundamentally change how we make future predictions and therefore how we prioritise future transport projects.
46% increase in motor vehicle use. While population growth will be behind much of that, those numbers still seem too high given what’s happened in the past 5-7 years.
Quite.
The slowdown in traffic growth began well before a) high fuel prices and b) the GFC.
Logic suggests, then, that neither of these factors is the initial cause of the slowdown. And the trend becomes even more apparent when VKT is calculated (as it should be) in per capita terms: Basically, people now are driving much less than they were before. Now there’s no guarantee the slowdown will continue (there never is) but it would seem prudent to assume that it does, while continuing to designate for future roads in the even that growth picks up again.
But constructing them now on the basis of mythical growth 10-20 years into the future seems, well, foolhardy.
Stu, That’s true for the GFC but not for fuel prices. They increased by approx 35% between 1998 and 2002 and by 25% between 2004 and 2007 and a further 25% up untill last month. The levelling out in most of the countries on the graph begins with the second round of fuel price increases. However in Japan and Germany the levelling off starts in the 1990s which is when they started to have large numbers of baby boomers retiring. The Japanese transport stats show that the amount of “commute” has been static for more than a decade and that inter-urban travel has been growing strongly for the last 20 years. Car and plane travel both dropped dramatically in 2009.
Even in the USA retired people only drive half as many km as they did when working so there is good evidence to expect post-GFC growth to be much lower than in the 1990s. Although if most head office workers are only in Auckland for the money and retire to other parts of the country then Auckland might still get hit with high traffic growth rates.
http://www.stat.go.jp/english/data/nenkan/1431-12.htm
Not sure what oil price figures you’re reading Kevyn, but I think you’re being a little selective with your point picking.
If you check out Figure 3.1 in this report: http://www.nzta.govt.nz/resources/research/reports/357/docs/357.pdf, you see that real oil prices were generally flat between 1990 – 2003. Sure, they rose between 1998 – 2002, but that rise was not out of scale with earlier fluctuations in prices.
So to suggest that the rise from 1998 – 2002 is somehow relevant to the above trends sounds fishy to me. If so, why didn’t earlier price rises (which were of a similar magnitude and rate) have the same impact? The demographic trends you hint at in your comment are much closer to the truth methinks.
Stu, Your graph only has one earlier price fluctuation, which is one third the magnitude and therefore not “similar” at all. A 50% price reduction over eight years followed by a nearly 100% increase in two years can hardly be described as “generally flat”.
Of greater concern is that your graph is very different from the graphs produced by StatsNZ and interest.co.nz. Reproducing your graph using BP Statistical Review of World Energy 2012 suggests differences are largely due to using US$ and US inflation. The statsnz graph is the most relevant as it is for the pump price which is what consumers respond to. Their are some earlier price rises which are of a similar magnitude rate but they were back in the 1890s, 1910s, WWII and 1970s but only the 1970s shocks had the same impact as the 2000s.
The road toll demographic changes in the same unusual way it did in the 1970s, the first price hit producing a reduction in young passenger deaths on the open road, consistent with a reduction in discretionary recreational travel as the first response to higher costs.
The crucial thing in my original response was that it took two price shocks to flatline traffic growth and that by the time we get out of the GFC the demographic changes will be sufficiently pronounced to that we shouldn’t expect an explosion of traffic growth like we did after 1986.
http://www.stats.govt.nz/browse_for_stats/economic_indicators/prices_indexes/how-petrol-prices-have-tracked-since-1980s.aspx
http://www.interest.co.nz/charts/commodities/oil-and-petrol
“Modelling of future land use and transport scenarios for Auckland forecasts approximately 46% increase in motor vehicle use between 2011 and 2041″
The figures show roughly a 30% increase over the last 13 years. A 46% increase over the next 30 years doesn’t feel out of line. In fact it might be too conservative… Given the roughly 2%pa growth rate over the last couple of years, you’d expect traffic kilometers to almost double by 2041.
The 46% was an increase in “motor vehicle use” (can someone explain how this is calculated?) which AFAIK isn’t the same as a 2% p.a. increase in VKT.
And it’s only 1% in the last year if you exclude the first two data points. This would give us a more accurate number statistically since the ’97 & ’98 skew the result so much.
And even if it was 2%, a predicting a 50% faster increase in usage (from 30 to 46) is not overly optimistic? Too conservative?!!
“And even if it was 2%, a predicting a 50% faster increase in usage (from 30 to 46) is not overly optimistic?”
30% in the past 13 years.
46% predicting over the next 30 years.
Notice that these are over different periods.
Ah, my bad.
But where do these large numbers come from? I mean, if traffic volumes on highways went up ~2% in 13 years (or ~1% in the last 11 years) are you saying the rest 28-29% of the increase in “motor vehicle use” was on local roads?
I tried looking for the source of the 46% number but this report only references it by claiming “models show …”. I’m not saying it’s wrong but it seems way too high.
So with population growth between 1% and 1.5% and a stagnant economy unlikely to get much better anytime soon, how do we get to a 46% increase? The report claims to take these things into consideration but offers no data to support this.
“I mean, if traffic volumes on highways went up ~2% in 13 year”
It didn’t go up 2% in 13 years. It increased from 3316 to 4283 VKT on state highways in 13 years. Which is about a 30% increase.
Depends what the alternatives are doesn’t it? All that sharp growth in car journeys was through the period when PT was neglected to the point of constructive dismantlement. Even by the middle of this decade there will be a PT system in place at least an order of magnitude better than anything we had a decade a go. So just on the arrival of a more viable alternative it seems unlikely that we will repeat that level of driving increase, then throw in increasing costs of driving [fuel, parking etc], and what is clearly a cultural shift away form the car and it looks much more likely that the 25 year period from 1980 will look increasingly like an anomaly rather than a baseline.
It would be a mistake to not plan for further investment in roading, in the way that we failed to plan for our current needs in transit. But it would be even stupider to actually build on the assumption that the 80s + 90s will return.
No growth or negative growth is also a possibility, but it is also likely that we can have economic growth in a city that does not lead to an equivalent vehicle use growth.
I don’t see the cultural shift. There will certainly be an increase in PT use for peak time commuting in and out of the CBD, especially if the council gets the tunnel built. There will probably be an increase in PT use for peak time commuting in and out of the regional sub-centers. I don’t see evidence of much of a change in the use of private vehicles to go to the supermarket, visit friends, take children to sports on a Saturday morning, or any of the 101 other reasons people use their cars. Mostly because these activities typically don’t take place at the hub of a hub-and-spoke system and so they are difficult to get to via PT.
So, I’m expecting vehicle kilometers to increase in line with Auckland’s population and with economic growth. Recent decreases will be reversed once we’re solidly out of the world economic slump. Also, petrol prices are set to decrease or even crash over the next 15 years as production ramps up, and that will encourage discretionary travel. Or at least not discourage it.
You can refuse to see what ever you like but the numbers support the anecdotal evidence of a shift in values: PT is booming and driving is stalling; in Auckland and in fact pretty much everywhere across OCED metropolitan areas. I suspect you are interviewing yourself and I’m sure you’re right with that sample of one, the change in habits is generational in large part [the kids ain't driving], and of course is a trend and not a universal change.
There has been a negligible increase in oil production globally since around 2005 [the bumpy plateau] but a big increase in demand from the developing economies, where has this come from? From a big and comparable decline in consumption in the OECD, especially North America. And this has not happened because of new efficiency but because of economic slow down.
Postwar western economic growth was built on cheap oil. Energy is wealth, real wealth, money is simply an abstraction. We are not going to find those growth rates so easy to come by this century.
“Modelling of future land use and transport scenarios for Auckland forecasts approximately 46% increase in motor vehicle use between 2011 and 2041 assuming full implementation of the transport programme and a high population growth forecast. Modelling takes into account expected population growth, increases in economic activity, increases in fuel prices and traditional travel preferences.”
This modelling assumes full implementation of which ‘transport programme’? The current councils PT programme or the ‘traditional’ and current government’s roads only one?
And which ‘traditional travel preferences’? Are the 80s and 90s the tradition that is preferred by these modellers?
Obi, why would “petrol prices are set to decrease or even crash over the next 15 years as production ramps up” ? Check out websites on peak oil. Total world production peaked in 2005. There are no large new oilfields about to be exploited, and of those being exploited the oil company needs a price of $75 to $100/barrel to return their investment.
The scenarios are either
- low economic growth with static or slightly declining oil prices, or
- high economic growth with high and rising oil prices
Both these scenarios result in low traffic growth.
The wildcard is natural gas. Fracking technology has allowed the United States to turn from being a natural gas importer to an exporter, and has curbed the growth in natural gas prices. Low gas prices relative to oil prices would lead to more new vehicles being made to be powered by natural gas. This would gradually uncouple the relationship between oil price and traffic volumes. To date oil prices haven’t been high enough for many natural gas vehicles to be built. Natural gas is not a long-term panacea for oil depletion, because the world natural gas market is much smaller (in energy terms) than the oil market, so world natural gas production would need to increase enormously to fully compensate for the anticipated decline in oil production, and such an increase in gas demand would no doubt increase gas prices.
I follow energy news and see no reason to believe petrol will crash anytime soon. As Malcolm said, oil exploration is nearing it’s limits and it looks like it will not be able to crank the production rates much higher. Oil shale will never cover the shortfall created by fields depleting all over the world. It just slows down the decline.
The NG plays are plentiful but they are not new. We have known about them for 30 years (yes, fracking was available back then) but they were too expensive to develop. It’s difficult to transport, has less energy per volume than oil and requires a MASSIVE overhaul of our private transport fleet if we were to use it for car fuel. Plus it doesn’t work for flying machines.
Best to use it for power generation.
Predicting the price of petrol is a foolish thing to do, it’s just that I think predicting it to go down is weird when everybody really expect it to go up.
From the report:
I’m going by a report that came out of Harvard recently:
“Oil production capacity is surging in the United States and several other countries at such a fast pace that global oil output capacity is likely to grow by nearly 20 percent by 2020, which could prompt a plunge or even a collapse in oil prices, according to a new study by a researcher at the Harvard Kennedy School. The findings by Leonardo Maugeri, a former oil industry executive who is now a fellow in the Geopolitics of Energy Project in the Kennedy School’s Belfer Center for Science and International Affairs, are based on an original field-by-field analysis of the world’s major oil formations and exploration projects. Contrary to some predictions that world oil production has peaked or will soon do so, Maugeri projects that output should grow from the current 93 million barrels per day to 110 million barrels per day by 2020, the biggest jump in any decade since the 1980s. What’s more, this increase represents less than 40 percent of the new oil production under development globally: more than 60 percent of the new production will likely reach the market after 2020.”
Plenty of explanation of how they arrived at their conclusions at http://belfercenter.ksg.harvard.edu/publication/22145/new_study_by_harvard_kennedy_school_researcher_forecasts_sharp_increase_in_world_oil_production_capacity_and_risk_of_price_collapse.html
Rebuttal here: http://www.theoildrum.com/node/9292
Be sure to read the comments too.
Most important word for anyone reading Mr Maugeri’s fantasies is ‘capacity’, not production. He is extrapolating from volumes that have never ever been reached in production, only in theory; this is a fantasy on a fantasy.
Anyone that doesn’t understand that everyone in the world with any oil is pumping as hard as they can right now is dreaming, these self reported ‘capacities’ are of a far too abstract nature to ever put in your car.
The whole question of supply and demand is very fluid. There are 3 things that define how much oil can be extracted from an oil well. The intercept length, the pressure and the porosity of the rock. Driller can now drill horizontally following the reservoir seam, use water injection to increase pressure and frack the rock to increase porosity. All these techniques increase the amount of oil that can be recovered thus increasing the supply without finding new fields.
The second change comes from substitution. If fracking increases the gas supply then it is likely that this will be used to replace heating oil, petrochemical feed stock and possibly transport fuel.
The other change is efficiency. There is a range of technologies that could increase the efficiency of transport. If vehicles improved efficiency at 3% per year for the next 10 years that would cut consumption by a third. This is not unrealistic as petrol hybrids are already twice as efficient and what about CNG powered hybrids. It doesn’t take in to account disruptive technologies that could happen in the next ten years, such as a breakthrough in batteries (price, capacity, recharge speed).
The price isn’t dependant on whether oil will be completely replaced, but if the demand drops below the supply.
In recent weeks the pump price has plummetted from $2.23 to $1.92. Take off all the taxes and it’s only around $1.10. To take it out of the ground, transport it, refine it, transport it again, and sell it at profit for such a low price is absolute proof that it’s a cheap and plentiful commodity.
For 40 years people have been claiming cheap oil is over and prices will be unaffordable in 5 years. 5 years later they repeat their claim. And 5 years after that, and 5 years after that, and 5 years after that….
They get it wrong, over, and over, and over.
“For 40 years people have been claiming cheap oil is over and prices will be unaffordable in 5 years.”
Too true Geoff. The earliest prediction of oil scarcity I’ve heard was 1919 when the US Geological Survey predicted that peak oil would occur in 1928. And here is the Canadian government predicting that oil would run out by 1986, and using that prediction to scare children…
http://www.misterkitty.org/extras/stupidcovers/stupidcomics58.html
So prices haven’t changed and there is no oil cost stress on our economy? WTI was $12 a barrel in 1998, you know that period of the big spike in driving in Ak. Clearly oil is no longer as cheap as it was and clearly that is having an impact on the economy in general and on driving habits in particular.
Prices go up and down all the time. That is the nature of a commodity. But real prices won’t continually increase, because over the long term every commodity in human history has reduced in price.
Do higher prices damage the economy? Sure. Cheap energy is good for the economy, which is why the sort of expensive energy policies promulgated by the Greens is economic madness. Spain “invested” in green power and green jobs and now has a crashing economy and 25% unemployment. There isn’t a lot that government can do to force lower oil and other energy prices, but it is easy for government to increase oil and energy prices while pursuing other objectives. Like mandating the use of biofuels, for instance. Or funding public transport capital projects out of a regional petrol tax rather than from existing local government revenue sources. Or deciding that NZ is going to lead the world in green technology, and try and generate all our electricity from solar and wind at a far higher cost than hydro or coal. We suffered enough from that sort of half-baked economic distortion when Muldoon was in charge.
Obi yes of course prices go up and down and they also reflect real supply and demand issues. If you are determined to only see continuity and refuse to see any information that indicates discontinuity you can do it but merely confirming your need for reassurance won’t help to build an accurate picture of the world. Yes some things stay the same, but change is the very nature of the world
If you can be bothered looking at something that isn’t only a confirmation of your prejudices the link below is quite compelling, and you might agree, balanced:
http://www.declineoftheempire.com/2012/06/how-much-of-a-threat-is-peak-oil.html
I wonder who sponsored that Harvard report.I wouldn’t be suprised if it were an oil company. I think that it is indisputable that our world is at the end of an era of cheap energy. We will have to rely increasingly on more expensive energy or more dangerous forms (such as fission) or fantasy forms (fusion). We have yet to find any viable alternative to our huge fertiliser/chemical demands to meet our food production requirements in the face of out of control population growth. While I support electric cars as the best alternative vehicle for NZ, they are impractical in many countries, let alone require massive energy inputs from somewhere. A battery powered fleet works well in a renewables dominated country like ours. (cheap power to charge during the night)
I do not think the GFC is anywhere near over. It was just postponed. All the inherent flaws in the economic system remains. I do not think this is just some blip. I think we are entering a long period of growth and that we may be facing a new reality.
Maugeri is an oil executive not an academic. He ran Eni the largest italian oil company.
For anyone interested in other energy trends there’s this scary [for the planet] report on what all that urbanisation in the emerging economies is being powered:
http://gregor.us/coal/coal-the-ignored-juggernaut/
As well as this more encouraging chart:
http://gregor.us/solar/world-solar-power-goes-parabolic/
In case some are interested in resource supply and price issues it is worth reading the not inconsiderable number of commentators who expect a major de-flationary future for oil. Don’t get excited though, this isn’t good news, yes the nominal cost of a barrel of oil under these scenarios is lower, but it still won’t be as easy to buy as it is now…. really?:
http://theautomaticearth.org/Energy/unconventional-oil-is-not-a-game-changer.html