Let’s Do the Time Warp Again: U.S. DOT Fails to Get Travel Forecasting Right

The U.S. Department of Transportation seems to be stuck in a bizarre time warp.  For nine years in a row Americans have decreased their average driving miles. Yet U.S. DOT’s most recent biennial report to Congress on the state of the nation’s transportation system, released last Friday, forecasts that total vehicle miles will increase between 1.36 percent to 1.85 percent each year through 2030.

Times have changed. Why hasn't DOT gotten the memo? Image: ##http://www.flickr.com/photos/x-ray_delta_one/5124536635/##Flickr/James Vaughan##
Times have changed. Why hasn’t DOT gotten the memo? Image: Flickr/James Vaughan

Just how out of whack is that forecast? Consider the following:

  • Vehicle travel hasn’t increased by even 1 percent in any year since 2004. Yet the U.S. DOT assumes that driving will increase at a rate significantly faster than that every year on average through 2030.
  • The new report uses for one of its two scenarios the same flawed forecasting model that has overestimated vehicle travel 61 times out of 61 since 1999.
  • In a particularly absurd twist, the U.S. DOT forecast doesn’t even get the past right. The report “projects” (based on 2010 data) that Americans drove 5 percent more miles in 2012 than they actually did. To hit the DOT forecast for 2014, Americans would need to increase their driving by 9 percent this year alone.

Why should we care about all this? With transportation funds increasingly scarce — and especially with Congress due to reauthorize the nation’s transportation law — policy-makers need good guidance about where to invest. A sensible approach, especially given the recent decline in driving and increasing demand for transit, would be to plow a greater share of those limited resources into expanding access to public transportation and active transportation modes while focusing highway spending on fixing our existing roads and bridges.

Instead, the U.S. DOT’s travel forecast is used as justification to propose a dramatic increase in highway spending to fund all the new and expanded highways that the DOT presumes we’ll need to accommodate all of those imagined new cars and drivers. The agency asserts that the nation would need to spend between $124 billion and $146 billion each year to maintain and improve the highway system — numbers that are sure to find their way immediately into highway lobby press releases and be repeatedly cited in congressional hearings.

What makes the DOT forecast so bewildering is that the agency — elsewhere in the very same document — acknowledges the strong possibility that many of the factors that have caused the recent drop in driving may be long-lasting. The report states:

[A] number of indicators point toward saturation in vehicle trips and vehicle miles of travel per person, with the peak of most per-person and per-household statistics occurring in 1995. Several factors could be possible explanations for this apparent saturation, such as the desire to limit the time spent in travel and replacing physical trips with electronic communication or online shopping.

In addition, the report cites changing travel trends among Millennials, who have reduced their driving more than any other age group over the past decade. “Youth,” the U.S. DOT report tells us, “prefer to live in high-density areas where there are more modal options and shorter trip lengths,” while “youth concerns for the environment play a role in their travel decisions.”

In other words, the U.S. DOT report acknowledges much of the evidence that Americans’ transportation needs and desires are changing, but it fails to do so in the one place with dollars-and-cents implications: its forecast of future funding needs.

To be fair, much of the problem with the U.S. DOT’s forecast is that it is an amalgamation of forecasts made by each of the 50 states. States have been notoriously slow to change their habit of making inflated driving predictions. They have persistently overshot, and change is only beginning to take place in a few states. Most states assume that a return to rapid increases in driving is just around the corner.

America clearly has large, unmet transportation funding needs.  But the U.S. DOT does no one any favors by producing wildly inflated estimates of highway spending needs based on warmed-over forecasts that have been proven wrong over and over again and that fail to reflect real – and likely lasting – changes in how Americans get around.

The time has come for a real, honest and well-informed discussion of America’s transportation needs. The U.S. DOT’s report to Congress provided a golden opportunity for the agency to share evidence of America’s changing transportation needs and help congressional leaders adapt to a new reality.

Sadly, it’s an opportunity the agency missed.

34 thoughts on Let’s Do the Time Warp Again: U.S. DOT Fails to Get Travel Forecasting Right

  1. To the year 2030? That’s truly bizarre. Have these people never heard of Peak Oil?

    Or political instability in the Middle East?

    Let’s face it, if there is a revolution in Saudi Arabia today, American car culture comes to a quick end. And good riddance.

  2. Yup, the cluelessness is truly astonishing. Almost everyone seems to think that somehow, some way, life in the US will always revolve around making car trips. “They” will come up with a solution! The complete failure to understand how natural limits are already affecting transportation clearly demonstrates our total failure to think long term, or even mid term. Way to go, American Education System!

  3. Three points. One, while I embrace the Peak Oil argument, the fracking revolution has changed those equations over the last decade. Domestic production is currently running at levels last seen around 1995, and is on an upward trajectory. There is still a fair amount of domestic untapped oil made available by the new technology, and the technology hasn’t even been touched upon in many fields overseas. I suspect fracking will offset the peak by at least 30 years.

    Two, US dependence on the Middle East has always been overstated, but the factors in my first paragraph make what happens in Saudi Arabia even less significant domestically. As of last year, we once more became a net exporter of oil. The problem with the Middle East has more to do with our European allies than it does with us. They’d have a hard time handling that sort of disruption, and things would get very uncomfortable here, but our production is currently at a level that will let us handle something as unlikely as a Saudi revolution.

    Three, the same technology that’s reversed the downward trend of US production has also flooded the natural gas market, and accessible reserves now are probably large enough to last a century. We could convert to CNG cars relatively quickly without a lot of pain.

    All of which is to say that economics won’t force us off car culture anytime soon, probably not within many of our lifetimes. Any shift away will have to be a matter of choice.

  4. It is easy to justify building more highways if the official reports consistently predict an increase in miles driven. Poor data analysis? Or is the “car lobby” influencing the reports? (Or do I sound like I’m wearing a tin foil hat?)

  5. Possibly contra all that:

    1) A given fracked oil well’s production seems to drop off more rapidly — maintaining production takes a lot more new drilling than in the past. See http://www.businessweek.com/articles/2013-10-10/u-dot-s-dot-shale-oil-boom-may-not-last-as-fracking-wells-lack-staying-power .

    2) It’s a world market for oil; Europe (and China) will happily bid the price up as necessary to get what they need, and our anything-for-a-buck free-market oil companies will sell to the highest bidder. It’s not “our” oil.

    3) As I understand it, our gas price is not the world gas price; there’s some glitchiness that I don’t fully understand: http://www.forbes.com/sites/michaellynch/2013/07/30/coffee-tea-or-gas-the-mispricing-of-natural-gas-on-world-markets/ .
    We ought to pay the cost of gas in Europe minus the price of a refrigerated boat ride, but we don’t — we pay much less. Also according to that relatively recent article, our reserves are not that large.

    It seems plausible to me that gas and oil could get expensive.

  6. 1.) This is far from a proven limitation of a fracked well, and it doesn’t translate to the oil not being there. We do have to drill a lot more wells to get it, but drilling these plays is a lot cheaper than it used to be. Even with the limitations of a fracking well, production is increasing. We may very well hit a peak in 2017 as Hughes predicts, or Hughes might be wrong. (He does seem to be a lone voice in the woods on this.) Even if Hughes is correct, that’s still moved peak 10 years.

    2. Europe bidding up the price is nothing new. That’s been a characteristic of the market almost since the market began, as their resources have always been fairly limited compared to ours. China’s demand is newish, but China also has their own vast, untapped reserves. These reserves are harder and more expensive to get to, but they’re there. Again, the turn-around we’ve seen is based almost solely on what has been geologically available in the US. That cycle will play itself out across the world before we hit peak.

    3. We pay less for gas than Europe, but our price is closer to a realistic cost, not theirs. Your link explains that the twitchiness owes to the reluctance of European markets to disconnect the price of gas from that of oil. This link keeps their gas price artificially high.

    I do think it is inevitable that gas and oil will grow more expensive over time, precisely because of the extra effort we’re putting into maintaining supply. We’ll never go back to 1990s prices, at least not for any extended period. But I don’t see us getting the Armageddon-style spikes some like to predict, either, at least not in the next decade or two. The market seems to have absorbed the increases we’ve had with little effect. I think it will absorb a lot more before you start seeing any real threat to car culture.

  7. Some other points you should consider:

    1) Whenever there is an “economic downturn” road building projects are always fast tracked. Some projects that are in the can but possibly years off for funding get the funding.

    2) Road building projects are often the projects that are thrown in as part of a legislative deal to get specific congress/senators on board to pass other pieces of legislation.

    3) China is going to come out as a big player in cars that are either lower in pollution or electric/battery powered because of their home grown smog problems. Expect in the next 5 to 10 years.

  8. All possibly true, but I would not rule out price spikes from political instability, because we don’t seem to have a lot of excess capacity in the world supply (this, from looking at production graphs at places like Early Warning). It’s not that Europe bidding up the price is nothing new, it is that if there is a sharp cut in production, their same-as-always price bidding will transmit the price spike to the entire world.

  9. “the fracking revolution has changed those equations over the last decade”

    This all presumes that we are able to allocate the water needed to utilize this technology, which is becoming a bit dodgy.

  10. Don’t forget the other big trends among Millennials, namely being jobless and living in their parents’ basements. Let us also not forget those with jobs are impacted with the college bubble costs and the loans associated with it. There is also an ongoing economic depression with workforce participation rates at levels not seen since the late 1970s.

    Furthermore, reduced miles driven doesn’t justify more diversions of taxes motorists pay.

  11. But fracking is morally wrong. If we allow that too continue, America the Beautiful won’t be beautiful much longer.

  12. I’d like to say it’s bad analysts, but this is so bad is hard to imagine anything but corruption.

  13. Spare me. I’ve been over it before. Cited the cites, broke down the definitions and the clever use of words and numbers. I am not repeating it.

    At the end of the day it’s road funds that are raided for transit, bike paths, checkpoints, and a whole host of other purposes. It’s done on the state and federal level. If there wasn’t money there to take it couldn’t be taken. You can’t take money from funds that can’t cover costs.

  14. Sure you can. If the law is written to mandate that some percentage of trust fund money must be paid out for transit or other projects that would constitute “taking money from funds that can’t cover costs.”

    The highway system doesn’t cover its costs partly because some percentage goes to non-highway projects, but mostly because we don’t pay enough in gas taxes to cover them even if 100% of revenue went to highways. And that doesn’t even count the subsidies for local road maintenance which typically receives no federal or state funding.

  15. *sigh*
    Fine. I’ll repeat it. But I am not digging out the figures again. The anti-car agenda idea that motorists don’t pay for the roads is done very simply.

    1) They assume all road costs are due to the private passenger automobile. That without private passenger there would be no road costs. Roads either would not exist or would be created by faeries. I am not sure which.

    2) They eliminate all taxes motorists pay except for a portion of fuel taxes, registration, and tolls. They neglect all the taxes paid on auto sales, auto repair, ticket scams exploiting engineering defects, the other taxes on fuel, property taxes on automobiles in some states, and much much more. That is they neglect a mountain of driving taxation that drivers pay.

    A few years ago there was big-to-do made about not enough money coming in for road funds. They blamed fuel efficient vehicle publicly, but when the analysis was done the real source was a sharp decline in the sales of heavy trucks and thus a great loss of tax funds from that. Of course that’s just one of the taxes that aren’t considered in the analysis offered.

    There is no need for legislation to raid road funds, the taxation that is legally restricted for road use, if roads are being subsidized in any great extent above and beyond what would be needed if private automobiles did not exist by the general funds. Why? Because they simply direct the general funds to where they want them instead. These unpopular diversions are not required if motorists aren’t paying for the road costs. Just don’t do the transfer. Very simple.

    If general funds are subsidizing driving, just cut the subsidy to have funds for transit. But that’s not the case. Motorists are subsidizing general funds and sequestered road funds have to be raided to pay for other things because that’s where the remaining money is.

    To accept your theory means accepting that people in government do more work than they have to and do things that if people learn of it could cost them votes. Simply put it doesn’t make sense. What makes sense is they raid whatever is in surplus.

  16. I’m sorry I didn’t read all that.

    Are you saying Congress has not been pumping billions of income tax into the highway trust fund in the last few years – two to three orders of magnitude more than sidewalks, biking, transit, and roadway noise abatement have taken out of the system? Is that what you’re saying?

    ‘cuz if that’s what you’re saying, you’re just plain wrong.


  17. That’s interesting, you can’t be bothered to read arguments which I am repeating from a previous thread and then you cite the same sort of anti-car agenda opinion garbage.

    See the key word ‘user fee’ in your cite? That’s what my explanation that you won’t read, addresses. That’s how folks with an anti-car agenda ignore a vast sum of taxation paid for by drivers of private passenger and commercial vehicles that goes directly to general funds of governments (see above for examples) and some taxes that are even highway specific but not considered ‘user fees’ (such as taxes on the sales of heavy trucks). Of course all the while making the assumption that roads would be totally unnecessary and would not exist if private passenger cars didn’t exist.

    Meanwhile, transit needs drivers to pay for it. Did you not read your article? That supports exactly what you took objection to my original comment in this branch.

    The simple fact is anti-car folks need driving taxes and general taxes to pay for their agenda.

  18. Considering that for many in Congress the only mode of transit anyone uses is by private car or airline, maybe the USDOT was deliberately over-estimating miles driven to accrue more general transit funds to then give more to non-car transit ?

  19. All government agencies have to project a decade or so into the future to insure they get funding for vital long-term projects. And if we couldn’t import oil, everyone would instead buy electric or coal-powered cars.

  20. Well, if you are sure the billion or so of revenue the heavy vehicle tax generates (2008 figure) isn’t accounted for in FHWA statistics like these under “Motor-Fuel and Vehicle Taxes,” perhaps you can write to them and explain that the annual gap between what is paid in user fees and what highways cost is actually more like $110 billion and not $111 billion.

  21. You’re being far too conspiracy-theoretic here. The growth-in-driving trend went on for many, many years, and natural bureaucratic conservatism is going to keep on assuming that the trend will continue. Add to that the slightest bit of organizational pride in their mission (almost every organization has it) which will lead to a tendency to round uncertain figures upwards, and you have your persistently wrong boosterism. No corruption necessary, and not even terribly bad analysts.

  22. What’s the breakdown of passenger vmt vs freight? Freight vmt increase is sign of economic recovery

  23. I’ve cited figures from fhwa in the past to show the transfers away from roads. But for the point you’re trying to make you need to prove to me the cites used these numbers. You can’t because they never tell us the details. Why do you imagine that political opinion articles don’t show us their work as they used to say in school?

    Furthermore prove to me that the mountain of tax revenue on fuel besides the gas tax, parts, vehicle sales, vehicle property taxes, ticket traps, parking, income taxes derived from automotive businesses, etc and so forth and so on is accounted for and if it’s not prove to me it does not exceed what you can prove comes from general funds. Then subtract the cost of the road that would have to be there even if the private passenger automobile was never invented.

    Do all that and then you’ll be on the road to convincing me.

    At the end of the day the road funds are the solvent part of government on every level. Government also seeks to balance its budgets on the back of motorists time and time again. Which is a real reason people don’t drive as much, the predatory taxation system.

  24. If you’re going to be that expansive about it, you have to account for the roads that aren’t highways too.* Indeed, those are probably paid for with a mix of general revenue taxes and property taxes after the general revenue subsidized part of the highway system takes its cut. You should also include environmental impacts and lost property tax revenue in your model. The latter happens because highways take land off tax rolls when they’re build, and probably generally reduce the value of land near them.

    Transit simply doesn’t take money generated by roads in any meaningful way. I can only guess at the logic, but some road cash flow is taken by transit agencies from highway revenue. It’s more than paid back from other sources, which should negate this issue for anyone who even cares.

    * Since about 3/4 of public roads don’t get FHWA aid, you should also consider that many drivers are directly paying for “user fees” for roadways they are not themselves using.

  25. I define highway in the legal sense. Highway is the two lane country road too. An interstate is a limited access highway, a sub class of highway.

    “Transit simply doesn’t take money generated by roads in any meaningful way.”

    Look at the diversion numbers on the federal level alone. It is meaningful, but the fact is that road funds are the solvent parts of otherwise broke governments on every level and thus are raided for other things.

    Furthermore, the entire state of Illinois is taxed to fund Chicago’s transit. Then there is sales tax to fund transit in cook and surrounding counties. That means every gallon of gasoline sold supports transit just from the sales tax portion alone. It’s amazing how transit advocates in Chicago slam the people that are paying the taxes for transit. The slams of big retail and people who live in suburbs. The very people who are being taxed to subsidize transit they don’t use and largely does approximately nothing in making traffic lighter where they drive.

  26. Q: What sort of tolls and user fees do bicycle riders contribute to the road system? A: None. They do cause traffic jams and road rage incidents though.

  27. To best answer the question “What sort of tolls and user fees do bicycle riders contribute”, let’s start with the question “What causes road maintenance to be so expensive?” Well, the largest cost by far is maintaining the road bed pavement. Damage to roads is damage to the roadbed is proportional to the 4th power of the axle load of the vehicle. A lightweight car (3000lbs) does 38416 times more damage to the road than a very heavy bike + rider (220lbs) (cite: http://www.cyclelicio.us/2014/fourth-power-rule-road-tax/). So there’s our start.

    Now let’s look at user fees drivers pay. Yes, drivers pay tolls on (some) limited access highways – the same highways where cycling is banned. Personally, I’d pay $15 to ride my bike over the VZ Bridge, but I can’t because it’s prohibited. Drivers pay a gas tax – true, and some of that goes to road maintenance. But that’s a long way from saying it’s a user fee. Gasoline is not subject to sales tax, and so it’s not indexed to inflation. It’s been 21 years since the federal gas tax has been increased. In that time the average personally owned has gotten much heavier while concurrently mileage has improved. We’ve basically found a way to do more driving damage to roads per mile while at the same time contributing less towards state of good repair.

    Meanwhile, non-drivers pay 49% of the cost of roads (scroll up for citation). Yet for all we non drivers are taxed, we get little in return: http://usa.streetsblog.org/2012/01/23/bike-ped-traffic-funding-and-fatalities-all-inch-upward/.

    Road rage is another story. Drivers are miserable (Cite: http://bikeportland.org/2013/01/30/bike-commuters-are-happiest-and-other-psu-research-tidbits-82448). This is so even absent bicycles on the road, evidenced by this story (http://www.nydailynews.com/news/national/driver-deadly-road-rage-shooting-chased-motorist-15-miles-police-article-1.1576960) and many similar on the freeway, where bicycles are banned.

    Take heart though, sometimes road rage solves its own problem (http://abcnews.go.com/blogs/headlines/2013/09/two-michigan-drivers-shoot-and-kill-each-other-after-road-rage-incident/).

  28. If I understand your argument correctly, you say we should include all sources of government revenue that result from the sales of gasoline, automobiles, auto parts, and auto services in our calculation of “user fees.”

    That seems like an over-broad definition to me.

    Gasoline taxes in particular are exempt from general sales taxes. So is it even really a “user fee” if it’s exempt from regular taxes?

    It seems to me if you charge a special tax on something, but exempt it from general taxes, then all you’ve accomplished is an accounting trick that earmarks tax collections toward a particular use. Same if you include general tax revenues for particular items in your accounting. One could just as easily say you’re taking money away from other important functions funded by the government (like schools) and spending it on highways.

    The broader thrust of this conversation boils down to three points: (1) Roads cost a lot of money, but they often seem free to users. (2) Americans are driving less, but official budget forecasts continue to over-estimate future driving trends. (3) We have not allocated enough money to maintain the roads we already have (by whatever accounting method you prefer), so we need to think critically about what we as a society should be spending limited tax dollars on.

  29. *sigh* The point I am making is that ordinary people using private passenger automobiles is a cash cow for government. It’s governments’ ATM. Want more money? Extort drivers. People will pay for the roads. They’ll grumble but in the end they’ll pay.

    It allows government to subsidize transit, trucking, bike trails, and have funds for much much more. That’s why these claims ‘drivers don’t pay for the roads’ are bogus and thus do not show what goes from motoring into the general funds.

    Want to talk accounting? In Illinois, motorists pay Illinois tax on the federal gas tax. Tax on tax.

    “(1) Roads cost a lot of money, but they often seem free to users.”

    Transit infrastructure seems to free to users as well. (The farebox paying a portion of operating costs, not initial construction as per the articles on this very website)

    ” (2) Americans are driving less, but official budget forecasts continue to over-estimate future driving trends. ”

    Largely due to people being impoverished through various mechanisms including monetary inflation. Also due to just plain actively making driving more and more painful and expensive to discourage it.

    “(3) We have not allocated enough money to maintain the roads we already have ”

    Again, monetary inflation, government raiding the funds for other purposes, cronyism, and general government mismanagement, which is really management for the advantage of people in and close to government.

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