In spite of the improved quality of life that congestion pricing has brought to other cities, Mayor Bloomberg’s congestion pricing plan has encountered strong resistance. The proposed $8 fees on cars and $20 fees on trucks entering midtown Manhattan during the day would help fund massive investments in metro area mass transit projects. If the City Council and the State Legislature approve the entire plan by next March, [1] the City will provide $200 million and the federal government will contribute $354 million to set up the congestion pricing system. Critics agree that more mass transit funding is needed, but have opposed the fees as punitive taxes on working class outer-borough residents. [2, 3, 4, 5, 6 ]
So far arguments for and against congestion pricing have not included the rising gasoline prices that are changing the economics of transportation. Skeptics, boosters, and the general public all implicitly assume that the price of gas will remain stable, but energy analysts see rising uncertainty and volatility [7, 8] and many corporate leaders, military analysts and national security advocates worry that even slight disruptions to our oil imports will raise gasoline prices over $5 per gallon. Possible triggers include an attack on Iran causing a blockade of the Straits of Hormuz, the shipping channel for over a third of the world’s oil, turmoil in Nigeria or Venezuela, terrorist attacks on oil shipping and refining infrastructure, or Gulf Coast hurricanes. [9]
Even without a crisis, fuel prices are expected to keep climbing, because we’re running up against geological limits. We’ve discovered and extracted all the easy, inexpensive oil, and the days of convenient, abundant energy resources are over. Many petroleum analysts say we will soon reach a world peak in oil production followed by an irreversible decline. Speculation about exactly when the peak will arrive is pointless, because rapidly growing world demand for oil has already surpassed world oil production. With many of the world’s giant oil fields in decline, as well as the rate of new oil discoveries, much of the world’s oil is now extracted from geologically challenging and politically unstable locations. Petroleum has risen to over $90 per barrel, and a growing number of observers, even the Wall St. Journal, anticipate it rising to over $100 per barrel. [10, 11] Other observers expect it to eventually surpass $150 [see Fuel Depletion appendix of full report].
In 2007, the U.S. Government Accountability Office reported that these factors will make energy markets increasingly volatile - and supply disruptions inevitable.
[12, 13] The International Energy Agency (IEA) warned that the growing gap between rising world oil demand and lagging production would lead to global oil shortages by 2012. [14, 15] Because the American public is unaware of future constraints, the political will to push for aggressive energy conservation has been lacking.
The Army Corps of Engineers and the Pentagon have warned that the military must take immediate steps toward running on alternative and renewable fuels or the increasingly costly and dwindling supply of oil - the lifeblood of fighter jets, warships, and tanks - will make the US military's ability to respond to hot spots around the world "unsustainable in the long term." [16, 17, 18] Let's apply the same awareness to New York City. How would a sharp spike in oil prices affect trucks bringing groceries to supermarkets? Winter heating fuel prices? The restaurants and theaters dependent on tourists? Fire, police, ambulances, and garbage trucks? Would commuters still choose to drive into Manhattan, or would they flock to mass transit?
Our dependence on cars and trucks is a national security issue. New York City should be planning now for its mass transit system to scale up so it can function at a variety of new economic conditions. Congestion pricing can fund that expansion, and any traffic reduction plan that doesn’t is unacceptable. With the threat of price shocks and fuel shortages, such as those resulting from Hurricane Katrina in 2005 or political turmoil in oil-producing regions in the 1970s, efforts to shift our transit needs to less fuel-guzzling modes is as vital to our future as NYPD’s anti-terror task force. By getting more drivers out of cars and onto mass transit, congestion pricing increases our economic resiliency to fuel price shocks. Because of its many benefits, congestion pricing could be more accurately called the transit relief fund, the mass transit incentive, or the rush hour fee, according to Joe Brewer, research fellow at George Lakoff’s Rockridge Institute. It could also be called security pricing.
PlaNYC 2030 is an excellent start on our long-term journey toward sustainability. As a work in progress, it can adapt to new challenges. Implementation of PlaNYC initiatives will be expedited by awareness of energy volatility and the need for rapid energy conservation planning. [19, 20] We can follow the examples of San Francisco and Portland, Oregon both of which have passed municipal resolutions on energy volatility. Portland formed a task force, which produced an 86-page report on reducing oil use and coping with economic stress. [21, 22, 23]
Sierra Club NYC Group, in its report, “Sustainable Energy Independence for New York City,” sets out both short- and long-term recommendations. In the short term we encourage City officials to implement congestion pricing, to form a task force to study potential local impacts and mitigations of energy volatility, and to require consideration of energy volatility in all City agency budgeting and planning decisions.
Civic, community and business groups should not wait for City action, but start their own energy volatility task forces.
We shouldn’t wait for future disasters to force crisis decision making. If officials work with the private sector and civic groups to prepare for energy uncertainty, the City will become more resilient to price shocks, while we reduce carbon emissions, cut energy costs and create jobs. It’s a win-win solution. New York’s example could lead the U.S. toward sustainable energy independence. Let’s start moving beyond oil, and toward better mass transit, today.
The full report is available online at www.beyondoilnyc.org.
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1.“New York to Get U.S. Traffic Aid, but With Catch,” New York Times, August 15, 2007, http://www.nytimes.com/2007/08/15/nyregion/15congestion.html
2.
"Will the Critics Kill Congestion Pricing?" Bruce Schaller May, 2007, Gotham Gazette, http://www.gothamgazette.com/article/transportation/20070508/16/2162
3. "Congestion Pricing in the Central Business District: Let's Look Hard Before We Leap," Keep NYC Congestion Tax Free Coalition, May 2007, http://www.observer.com/pdf/FINAL-2007-REPORT.pdf
4
. "Debunking the Attack on Congestion Pricing," Citywide Coalition for Traffic Relief, April 2007 http://www.streetsblog.org/wp-content/pdf/DebunkingtheAttackonCongestionPricing_April.pdf
5
. "Congestion Pricing And The Future Of NYC: Addressing The Objections," Bruce Schaller, December, 2006 http://www.gothamgazette.com/article/Transportation/20061213/16/2060
6
. "Growth or Gridlock? The Economic Case for Transit Relief and Transit Improvement for a Greater New York,” Partnership for NYC, Dec. 2006, http://www.pfnyc.org/publications/Growth%20or%20Gridlock.pdf
7. Gallup Poll, May 21-24, 2007, http://www.pollingreport.com/energy.htm
8.
We’ve gotten accustomed to a barrel of crude oil costing around $65, but between 1986 and 1999, it cost between $15 and $22 per barrel. Translating that into the price of gasoline is complex. The 42 gallons of petroleum in a barrel yields about 20 gallons of gasoline, making up about 50% of its price, with refining, distribution and marketing, and taxes making up the remainder. U.S. Department of Energy, Energy Information Agency, http://www.eia.doe.gov
9. Oil Shockwave Report, Securing America’s Future Energy, 2005, http://www.secureenergy.org/reports/oil_shock_report_master.pdf;
Effects of High Oil Prices on the World Economy, SAFE, 2006, http://www.secureenergy.org/reports/westcott_report.pdf
10. “How Economy Could Survive Oil At $100 A Barrel,” Sept. 28, 2007, Wall St. Journal, http://www.cattlenetwork.com/content.asp?contentid=164358
11. “$100 Oil Price May Be Months Away, Say CIBC, Goldman,” Bloomberg.com, July 23, 2007, http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aYjwn7IqTlHQ
12. “Crude Oil: Uncertainty about Future Oil Supply Makes It Important to Develop a Strategy for Addressing the Peak and Decline of Oil Production,” U.S. Government Accountability Office, GAO-07-283, Feb. 2007, http://www.gao.gov/new.items/d07283.pdf
13. “Steep decline in oil production brings risk of war and unrest, says new study,”
The Guardian, October 22, 2007, http://www.guardian.co.uk/oil/story/0,,2196435,00.html; "Crude Oil: the Supply Outlook," Energy Watch Group, Oct. 2007, http://www.energywatchgroup.de/fileadmin/global/pdf/EWG_Oil_Exec_Summary_10-2007.pdf
14. “IEA sees oil supply crunch looming,” Reuters, July 9, 2007, http://www.washingtonpost.com/wp-dyn/content/article/2007/07/09/AR2007070900432.html; “Oil supplies ‘face more pressure,’ BBC News, July 9, 20007, http://news.bbc.co.uk/2/hi/business/6283992.stm.
15. “Medium-Term Oil Market Report - July 2007,” IEA, http://omrpublic.iea.org/mtomr.htm
16. “Energy Trends and their Implications for U.S. Army Installations,” Donald Fournier and Eileen Westervelt, U.S. Army Corps of Engineers Energy Research & Development Center, Sept. 2005, http://stinet.dtic.mil/cgi-bin/GetTRDoc?AD=A440265&Location=U2&doc=GetTRDoc.pdf
17.
“Pentagon study says oil reliance strains military,” Boston Globe, May 1, 2007.
18. “Transforming the way DoD Looks at Energy,” Office of Force Transformation, U.S. Dept. of Defense, April 2007.
19. “Saving Oil in a Hurry,” International Energy Agency, 2005, http://www.iea.org/Textbase/publications/free_new_Desc.asp?PUBS_ID=1474
20. “Implementing the Most Effective Transportation Demand Management (TDM) Strategies to Quickly Reduce Oil Consumption,” Kathy Leotta, Parsons Brinkerhoff, Jan. 2007;
http://postcarboncities.net/files/Leotta_ImplementingTDMtoQuicklyReduceOilConsumption.pdf
21. Full text of San Francisco resolution, http://www.energybulletin.net/15086.html
22. Task Force Briefing Book, City of Portland Office of Sustainable Development, July 25, 2006, http://www.portlandonline.com/shared/cfm/image.cfm?id=124321
23. “Navigating the Transition from Oil and Natural Gas,” City of Portland report, Feb. 2007, http://www.portlandonline.com/osd/index.cfm?c=42894.
