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In Europe, conserving gas is a matter of habit

Stricter standards, higher taxes, and a new president with a green agenda could completely reshape the way Americans drive. To see what the future could look like, just cross the Atlantic.

By Jenn Abelson
Globe Staff / December 14, 2008
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WASSERBILLIG, LUXEMBOURG - Americans wondering about driving in a world of higher gas taxes and a government mandate for fuel-efficient cars might see how it's changed Martin Steinmetz.

A decade ago, he drove a sleek Mercedes-Benz. As the price of gas shot up because of high gas taxes and rising oil prices, he steadily traded down: first to a workmanlike Hyundai Starex, then to a modest KIA, and most recently to a royal blue Smart Car, all 8 feet, 8 inches of it. It sips gas at 37 miles per gallon. The 46-year-old manufacturing worker still shops around for the best gas prices, even crossing the German border into Luxembourg to fill up.

"I don't regret the smaller car," Steinmetz said, patting his tiny vehicle like a proud parent at a gas pump in the border town of Wasserbillig. "It was the smart move."

American drivers could soon find that Steinmetz's present world is their automotive future. Already, US automakers are slashing production of SUVs in favor of more popular hybrids and compact cars. With the US auto industry on the brink of collapse, the Bush administration is trying to accelerate a $25 billion loan program to produce fuel-efficient vehicles. And while President-elect Barack Obama prepares an ambitious green agenda, local politicians, from Massachusetts to Oregon, are already calling for increases to gas taxes to fill civic coffers bled dry by an economic downturn.

In Europe, gas prices have been shooting up for a decade, long before they did in the United States, and peaked at $10.64 a gallon this summer as American drivers were gagging at $4.50 a gallon. In an effort to reduce fuel consumption, European governments steadily raised fuel taxes over the 1990s - between 40 and 50 percent of the retail price of gas. That action forced motorists to scale back their driving habits and forced manufacturers to meet the demand for more fuel-efficient cars.

The results are clear: Gasoline consumption on the continent dropped from 3.21 million barrels a day in 1992 to 2.51 million barrels a day last year, according to David Martin, an oil market analyst at the International Energy Agency in Paris.

Taxes vary in each country, but the Netherlands, for example, raised taxes from $2.42 per gallon in 1992 to $4.04 per gallon in 2007. The United Kingdom hiked taxes from $1.78 per gallon to $3.82 per gallon over the same time period.

Meanwhile, North America - where the United States is the largest guzzler - increased its thirst for gas from 8.43 million barrels a day in 1992 to 10.84 million barrels a day in 2007, Martin said. Federal gas taxes, which grew from a mere 14.1 cents per gallon in 1992 to 18.4 cents per gallon in 1997, haven't increased since then. And state taxes have averaged only about 25 cents.

The idea of raising gas taxes in America would have been almost unthinkable a few months ago. But now with crude oil at about $46 a barrel on the New York Mercantile Exchange and gas below $2 a gallon, it's easier for politicians and drivers to stomach.

The economic nosedive is also accelerating the revolution in American driving habits kicked off by the high cost of gas last summer. Cost-conscious Americans have continued to cut back on their gas consumption. Demand for gasoline - costing 40 percent less than a year ago - fell 0.3 percent for the week ending Nov. 28 compared with the same week last year, according to Spending Pulse from MasterCard Advisors. It's the 32d consecutive week of declines.

The economy and fear of high gas prices have also curbed America's love for big and expensive cars. Sales of trucks and sport utility vehicles have plunged 22 percent compared with the first nine months of 2007, according to Autodata Corp., while small car sales are up about 1 percent.

"Americans are looking at what's more affordable and efficient and that means smaller cars," said Paul Newton, an auto analyst with Global Insight in London. "The economic downturn will help facilitate this."

Already, Ford and Toyota have said they are considering introducing to the United States the newest and tiniest cars that were designed for European markets. Nissan and Honda, meanwhile, are unveiling models that run on cleaner and more efficient diesel, which will hit the market over the next two years. These efforts, combined with stricter fuel economy standards, higher gas taxes, and a new US president with an aggressive green agenda, could completely reshape the way Americans drive.

Eric Freid got a glimpse of that future when he moved from West Roxbury to Sweden four years ago. He took along his Honda Civic, thinking he would need the car the way he used it in the United States: driving to work, shopping, and seeing friends.

These days, he mostly leaves his car home in Jönköping because gas is about $8 a gallon. He bikes to work and takes the train when he makes the 200-mile trip to Stockholm for the weekend.

"People don't rely on their cars as much, and usually you only have one per family," Freid said. "Getting your license is not seen as a right."

When Europeans turn 18 - the legal driving age in many countries on the continent - learning to drive is not seen as a priority because driving is so costly.

Jarlath Boylan, who lives in Germany but works in Luxembourg, didn't get his first car until he was 25 years old. On his second car now, Boylan drives a fuel-thrifty Volkswagen Golf. Even so, filling the tank costs him $330 a month, his biggest expense after rent.

And Boylan, like thousands of his countrymen, treks to Wasserbillig, just across the German border, to fill up at dirt-cheap Luxembourg prices - about $5.53 per gallon recently, compared with roughly $6.84 in his hometown of Trier.

Drivers crowd the 11 gas stations located on a half-mile stretch here, lining up a dozen deep in Peugeots and Fiats, Mini Coopers and Smart Cars, often stuffed with plastic containers for extra fuel. The SUVs that drove by in an hour could be counted on one hand.

"It's a completely different attitude in Europe. Even if you're wealthy, you're going to look at fuel consumption, whether it's a BMW or a Mercedes," Boylan said. "There is a different awareness, we think how much it will cost to run the car."

Jenn Abelson can be reached at abelson@globe.com.

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