Research Associate, Center for Energy Studies
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We propose a national marketing campaign to better inform consumers about measures that can decrease fuel use, particularly during a rapid increase in fuel prices (an “oil shock”). The federal government should initiate a marketing campaign, either in conjunction with the Ad Council or as a separate public-private partnership. Its objective would be to inform consumers how they can alter the manner and frequency of their driving. The cost of such a campaign would be modest in comparison to its potential role in a) mitigating the effects of higher transportation costs and b) empowering consumers to take greater control of their expenditures on fuel.
There are a number of steps that consumers can take to limit the deleterious effects of high and quickly rising fuel prices. Measures include so-called “smart driving,” such as accelerating gradually and adhering to the speed limit to maximize fuel mileage; improvement in routine maintenance; the use of new technologies, such as those providing real-time feedback on fuel consumption; ridesharing (carpooling) to reduce vehicle use; and telecommuting and/or compressed worked schedules to decrease the number of commutes. These also yield other benefits such as improved safety, better air quality, lower carbon dioxide emissions, and reduced congestion.
There is no shortage of information about these measures or even programs to promote them, but the information is mainly found on websites that can be difficult to find unless consumers are specifically searching for them. A number of countries, notably in Western Europe, have already undertaken more concerted efforts. Additional market research should be conducted before rolling out the campaign. Such research would also focus on the development of a consolidated, user-friendly website.
The United States is ill-prepared for another “oil shock” driven by instability in major petroleum-producing regions, notably the Middle East. Given the importance of oil to the transportation sector, the effects of such shocks are both widespread and substantial. An oil shock has preceded all but one recession since World War II. A release from the Strategic Petroleum Reserve (SPR) can only play a limited role in restraining short-term unexpected volatility in the price of gasoline and diesel. Together, the measures discussed here could be thought of, conceptually, as “a demand-side SPR.”
We believe that a relatively modest publicity campaign—an average Ad Council campaign, for example, receives $25-$30 million of donated media—could create substantial savings for consumers. Americans spent more than this on gasoline in just one hour in 2011, when their annual gasoline expenditures totaled more than $475 billion. Studies generally show a reduction in oil consumption of 5-15 percent from smart driving. Ad Council partners who run ads exert substantial control over which advertisements are shown, and we expect that more will want to show ads about ways to lower fuel use during an oil shock.
Would such a campaign, even if forcefully supported by a public-private alliance at the national, state, and local level, fully offset the impact of high prices or an oil shock? No. Only longer-term efforts, such as those promoting a shift to greater fuel diversification in the United States’ primary transportation sector, can move us toward this goal. But by reducing the time and effort spent by consumers looking to lower fuel costs, a publicity campaign would serve a clear economic purpose. By avoiding mandates and other regulation, it would conform to the idea of small, non-intrusive government. Not least, it would empower consumers during periods of economic hardship and individual uncertainty.
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