• "Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America's highways in history. By 2012, there should be some 10 million fewer vehicles on American roadways than there are today -- a decline that dwarfs all previous adjustments including those during the two OPEC oil shocks." The report has a very interesting analysis of vehicle scrappage trends versus new vehicle sales that I hadn't seen before. This is going to be a double whammy on Detroit -- lower overall vehicle sales and plummeting SUV and light-truck sales.

It looks like plug-in hybrids will be introduced not a moment too soon. And certainly not soon enough to avoid a steady decline in vehicles miles, according to CIBC:

CIBC says we're going to become like (shudder) Europeans and Canadians! (Although this particular production should probably be taken with a grain of salt, since the CIBC analysts are, after all, Canadians.)

This will ultimately require a major investment in public transit, an area that this country lags enormously behind Europe:

I do believe this country is going to be dramatically changed by our failure to plan ahead for the inevitable. As CIBC notes, this will be different from most previous oil shocks in that the duration of the price shock is likely to be much longer:

The longest running continuous oil spike in U.S. history lasted seven quarters, while we expect oil prices, at least on a trend basis, to be headed higher right through 2012.

CIBC also points out another reason this oil shock will be different:

Moreover, one of the earlier arguments for why oil might matter less these days is rapidly disappearing. Until recently, it was commonplace to dismiss the oil shock by pointing to the fact that the US economy, with its shift into services, had become signifi cantly less energy intensive than it was in the 1970s, when oil shocks did so much damage. But although US crude oil expenditures currently make up only 4 percent of GDP, this share will grow to 9.5 percent over the next three years as crude prices hit an average of $200/bbl in 2010. In terms of oil's share of spending, we're right back where we started from.

Doh!

I would also add that this is different from previous oil shocks in that in the 1970s many different sectors of the economy relied on oil, including industry and the power sector. Now it is primarily one sector of the economy, transportation, that is an oil monoculture -- and that sector as had a much more difficult time transitioning to alternative fuels than other sectors.

One last note: The other industry that is going to be devastated by high oil prices are the airlines. I will blog on the likely changes in air travel later.

This post was created for ClimateProgress.org, a project of the Center for American Progress Action Fund.