Americans Drove More Than 3 Trillion Miles Last Year

Source: By Bloomberg • Posted: Wednesday, March 25, 2015

(Bloomberg) — Three was a magic number for America last year.

The U.S. economy added 3.1 million jobs. Gasoline plunged below $3 a gallon. As a result, driving topped 3 trillion miles for the first time in seven years and is poised to climb higher this year.

Americans hit the road at a record pace in January, according to the Federal Highway Administration. The 33 percent slide at U.S. pumps, combined with an improving job market, touched off a national spending spree on sport utility vehicles, vacations and Christmas presents. Travel will rise another 2 percent this year, the biggest increase since 2004, transportation analysts estimate.

“A growing economy can increase driving as more people head to work,” said Michael Green, a spokesman for the Heathrow, Florida-based automobile club AAA, said Monday by phone from Washington. “Driving to work is a lot easier knowing that gas prices are the lowest since 2009.”

The average retail price for regular gasoline in the U.S. fell below $3 a gallon for the first time in almost four years in late October. Prices continued to sink, dragged down by a worldwide glut of oil, ending the year at $2.24. The average was $2.419 March 23.

Travel will rise this year to potentially top the 2007 peak of 3.03 trillion miles, Alan Pisarski, a transportation analyst who has advised states from Virginia to Arizona, said by phone from Lake Barcroft, Virginia, March 17. “I would’ve said that even without gasoline prices dropping, but that makes it all the more certain.”

Higher Demand

Gasoline consumption will rise 0.9 percent this year to 9 million barrels a day, the Energy Information Administration forecast this month. Even so, the lower prices mean the average household will spend $1,802 for gasoline in 2015, $710 less than last year, the EIA said.

That money is being spent elsewhere. Wal-Mart Stores Inc. said non-fuel sales rose 2 percent in the fourth quarter. Light truck sales in the U.S. jumped 11 percent in February, according to Wards Automotive Group.

“Gas prices are down, the economy is ticking up and freight seems to be pushing a lot of growth because of more home-delivered goods,” according to Nancy McGuckin, an independent travel consultant based in Los Angeles who said U.S. mileage may rise another 2 percent in 2015. “As long as we’re growing, vehicle miles traveled will grow.”

Gasoline futures for April delivery fell 0.42 cent to $1.7997 a gallon Tuesday on the New York Mercantile Exchange. Prices have dropped about 38 percent over the past year.

West Coast

Kinder Morgan Inc., the biggest fuels pipeline operator in the U.S., moved 4.4 percent more gasoline through its U.S. West Coast system in the fourth quarter than it did a year earlier. Steven J. Kean, the Houston-based company’s chief operating officer, called it a sign of the improving economy and “perhaps the beginning of a demand response to lower prices.”

U.S. drivers logged 237.3 billion miles in January, the latest figures available. It’s the most for that month in government data going back to 1970. January driving grew by 4.9 percent over the previous year, the biggest increase for the month since 2000.

The U.S. economy added 534,000 more jobs in the first two months of this year, Bureau of Labor Statistics data show. That meant more people driving to the office, said Carl Larry, director of oil and gas for Frost & Sullivan LP in Houston.

“Outside of Chicago and New York, everyone drives to work,” Larry said by phone March 13. “If you have a job, you have to get there and get home.”