Oil Use Down in US, Way Up Globally
Published May 7, 2008
Oil prices continue to surge to new records. A barrel of light sweet crude peaked above $123 on Wednesday. Gasoline is selling at a national average of about $3.60 a gallon, according to AAA. And according to the Energy Department, prices at the pump will surpass $4 a gallon this summer.
This is all old news. The bigger question is whether or not the economic fundamentals of rising prices will reduce consumption. According to a new monthly report from the Energy Department, the answer is yes. The Energy Department is projecting that domestic gasoline consumption will decline by about 190,000 barrels a day this year. Add increased use of ethanol, and the overall petroleum tab will drop by 330,000 barrels a day—the first annual decline since the oil price shocks of Iraq War I.
This reduction of oil consumption, and the concomitant decrease in greenhouse gas emissions, might resemble a silver lining in the dark clouds of economic recession, climate change, and fragile energy markets. But wait. Those 330,000 barrels of oil account for less than 1 percent of total gasoline demand in the United States. More importantly, while U.S. consumption takes a dip, global oil demand is projected to rise by 1.2 million barrels per day. This year, China alone will add 800,000 barrels a day to its consumption levels.
What does that mean for you and your experience at the local filling station? Demand will continue to outstrip supplies, pushing oil and gasoline prices even higher. Goldman Sachs sees the price of a barrel going past $150 and heading toward $200. Other industry analysts predict $7 at the pumps in the next few years.
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To me, this is another good argument for energy independence. As the use of energy becomes a more global phenomenon, an individual country can do less and less to influence their own energy prices. The only way to gain back control is to increase our independence.
Of course, this shouldn't necessarily fly in the face of good economics. If the Russains would like to sell us oil at $50 a barrel, and we can't come close to beating that price, then let's buy it. But let's not leave ourselves "over a barrel" if the price goes up to $150 or $200. I guess that means that the key is to be independent but flexible. How? I'm not sure, I wish I was that smart.
The other economic reason to pursue energy independence relates to national security. I don't think that we went to war in Iraq "for oil", but let's face it, we probably wouldn't be there if the region didn't have it. It's a question of national interest being driven by energy resources. The economic cost of this war (and others) is a large hidden cost associated with energy dependence.
Hey, here's a wacky idea: How about if we just keep reducing demand?
Buy more fuel efficient vehicles, drive less, drive frugally when you do drive, and above all else, just slow down a bit. I bet we could cut consumption by a good ten to twenty per cent without altering our way of life in any way.
I think Goldman Sachs is wrong about $200 a barrel oil in the next year or so. At $120 a barrel US consumption is dropping. At some point soon China's demand will also stop rising or drop. When both China and India reach a point of dropping demand, prices will stop going up and may even drop a bit. My WAG would be about $5.00 per gallon of gasoline for the next long term equilibrium.
The big question for the US is what to do when there is some price stability. Do we go back to our big SUVs or do we move to more fuel efficient transportation? If you want to insure the move to efficient transportation, then we need to raise taxes on gasoline once there is price stability. With the sad shape of our transportation infrastructure, I could easily see a buck or two per gallon. I know people would scream and the Republicans would talk about how it would ruin our economy, but the rest of the industrialized world seems to do just fine with high gas taxes. In Europe the price of gas ranges from about $8.00 to $9.50. For truck drivers and others who use there vehicles for work there would need to be a tax credit to offset the increased gas tax.
Rather than looking at this thing as energy independence, what if, for once in the stupid and pathetic history of humankind, people work together to solve a GLOBAL problem? Hmmmm?
There is no such thing as energy independence....this energy problem is affecting everyone, every country, the global climate, the global oceans, everything. We have no where to go, we have no where to turn, and we have no one to blame but ourselves.
It's time we stop acting like small stupid children and act as adults who can share ideas and come up with a global solution to a serious global problem. This is going to be one of the toughest problems humans are going to face. The earth will be here with or without us....so if we care one iota about our own existence and wellbeing, we better change our pathetic ways now...not tomorrow.
Economics isn't going to save us...you can turn blue talking about what the Russians are going to do, what the Chinese aren't going to do, what the Indians may do, etc etc...that all means jackshit compared to what's coming down the railroad tracks.
I will never understand why some are so sold on taxing the hell out of fuel! Get over it. It will happen anyway. If gasoline consumption deceases, then government makes less money to fix roads and such, which means they will tax you anyway. So stop with the additional taxing, please. What will you do when they start to tax you by your mileage in your all electric vehicle to offset the gasoline tax loss? Will you scream that it is unfair?
Not everyone can make the financial change to purchase a more fuel efficient vehicle, and the way that loan companies are becoming more selective on who they loan to makes it even more difficult, with the almost nothing for your higher mileage trade in.
Besides, unless someone is buying an EV then gasoline still is needed. Which means the driver still pays the higher fuel tax and the miles driven tax. Who gets to decide what is fair and not? If your want to a higher tax on fuel, it should apply across the board, no discount to any vehicle. To do so is just plan snobbish.
So somebody somewhere on the planet is going to burn all the fossil fuel, and that will be catastrophic. Do I have it right. And if a person does not accept this view, they are stupid. Right.
The idea of energy independence is to shift from getting our energy from other nations, to getting our energy domestically. Sounds like a sound plan to me. And "Volt" like cars, with an AER of over 30 miles sure seems like the way to do it. Electricity is supplied from domestic or at least regional sources.
Now does it help much to shift from burning oil in cars to burning coal in power plants? Nope. But electricity can come from solar, nuclear, wind, hydro etc.
ANON:
The people who don't have the money to chnage their cars to fuel effiicient ones should have thought about that BEFORE they went out and bought gas guzzlers and big, cheap SUVs with deep discounts. No one forced them to pay $35K for a GM or Ford SUV so they can feel like they are sitting in their living rooms on the way to work.
TOUGH [&#@%!] for them...I hope they end up walking.
Stupidity should be painful
The U.S. needs to get on the grid. Power cars, home heating, etc by electricity.
So it needs to find a way to power the grid without using fossil fuels.
Hybrid cars are the first step in the right direction. The second step is plug-in hybrids, and the third is all electric cars.
Well i just kept reading because i was interested in Hybrid cars and fuel cell technology.
Well from my view. I guess that prize may rise but for so long. Since eventually people be fed up!! and like me searching a new way to spare the cash just by buying something that would use less consumption.
Well it says that we have enough of fuel in stock right. but why is the prize going up.
Thats because people try to save lot of fuel since the price is high which makes itself a down trend in the sales. So to keep up with their investment they eventually raise the price to cover the sales. Which of course can't go on for so long.
Eventually people won't buy cars that consumes high fuel. They rather go for some new cars with new technology for saving fuel.
Which again raise the demand of such cars and lowers the production of the other wastefull cars......
So on the end Petroleums fuel, etc.. have lower one or another way if the wanna make some investments.
In reply to:
"The people who don't have the money to chnage their cars to fuel effiicient ones should have thought about that BEFORE they went out and bought gas guzzlers and big, cheap SUVs with deep discounts. No one forced them to pay $35K for a GM or Ford SUV so they can feel like they are sitting in their living rooms on the way to work.
TOUGH [&#@%!] for them...I hope they end up walking.
Stupidity should be painful"
By your last statement, I guess you are saying it isn't.
In reply to the rest of your rant, yes, we all could for see gas prices being $4-$5 this year. So my fuel bill went from $200 a month when I bought the vehicle, to over $600 this last month. I must get my crystal ball checked out, because I didn't see this coming.
Just so you know, my vehicle WAS fuel efficient when it was purchased 5 yrs ago, and it no longer is thanks to newer technologies, and Ethanol being forced into my gasoline mixture.
Thanks for that as well.
And as well all know, only SUVs have poor mileage, there are now cars that get bad mileage. You Sir are an idiot!
I am sorry, your expecursion Hummer that you got 5 years ago was FUEL EFFICIENT?
Can you raise your IQ over 49 and explain this to me?
You are suffering because you wanted to buy an SUV, you didn't need it, you could have purchased a much more fuel efficient car, but you didn't.
Before you tell me about little Sammy and his soccer schedule, let me tell you; people survived just fine before the advent of SUVs and will do just fine after they are all in a pile of crap after trading them in for $999 or less.
And buy the way, there were priuses 5 years ago, Actually they existed 9 years ago.
So please, spare me !!!
High gas prices seem to be the only way to get Americans to conserve. Unfortunately, this is a regressive way to cut consumption and greenhouse gas emissions, but still, its good for the planet.
Again, what is with the assumption that only SUVs get bad mileage, and a Prius can not be used for all things! Grow up people. I am getting the impression that this site is just for closed minded leftist that have never really experienced any kind of real need for larger transportation.
So you know, the vehicle I am discussing is a Chrysler Mini-van! So be sure to not choke to hard on your closed minded crow!
The reason why 'the assumption that SUVs get bad mileage' is because it is true. Check the EPA numbers sir. These cars are the poster children for crappy efficiency. You know it we all know it. And just as you are - obviously - frustrated about people's hatred towards SUVs, I am also frustrated at people, you included, lumping everybody as a leftist because we have an opinion gas consumption. If you want Cheerleaders for your inadequate brain, try bidcheaptrucks'r'us.com, you may even find your soulmate.
Need2Change... I think I love you, man... :-) Assuming you are a man of course! :-p
Here's step #2: www.hymotion.com
It is really that simple... Hybrid cars getting more and more efficient until only the true gearheads are buying ICE-only vehicles.
Image if you could use a little more than 100 gallons of gas a year??? Apparently, now you can.
"By your last statement, I guess you are saying it isn't.
In reply to the rest of your rant, yes, we all could for see gas prices being $4-$5 this year. So my fuel bill went from $200 a month when I bought the vehicle, to over $600 this last month. I must get my crystal ball checked out, because I didn't see this coming.
Just so you know, my vehicle WAS fuel efficient when it was purchased 5 yrs ago, and it no longer is thanks to newer technologies, and Ethanol being forced into my gasoline mixture.
Thanks for that as well.
And as well all know, only SUVs have poor mileage, there are now cars that get bad mileage. You Sir are an idiot!"
You're perfect example of how stupidity should be painful.
I also have a car that is 7 years old...IT STILL GETS over 30 MPG combined. What's your problem? Seems like you didn't get a fuel efficient car otherwise you'd not be complaining about it. You know what I have to say? Tough [&#@%!]. You chose the wrong car then and you're paying for it now.
Crystal ball? No need for that...just half a brain and common sense. That's a hard concept for you to understand because when you had a choice to buy a truly fuel efficient car, you didn't.
Sorry..can't feel sorry for you because there were choices you could have made that could have made a difference. With all that's going on...war, inflation, poor economy, etc etc, you sir would have to be an idiot not to think a little ahead.
Too bad for you.
mdensch, said:
"Hey, here's a wacky idea: How about if we just keep reducing demand?
Buy more fuel efficient vehicles, drive less, drive frugally when you do drive, and above all else, just slow down a bit. I bet we could cut consumption by a good ten to twenty per cent without altering our way of life in any way."
Also, if you can, take the bus and become an advocate for any and all forms of rapid mass transit in your community. Buy a motor scooter for short distances.
Oil consumption isn't just gas and those other uses will also drive demand up. Alternative vehicles are the way to go but the envrionmentalists, industry, and government all must get together on it or it will never work. Trucks still need to move goods and gas prices = higher prices. Increasing taxes at every turn doesn't fix anything (smoking rates are still stable regardless of price increases). I'd buy a hydro car tomorrow but there's no stations. A scooter would be nice (and I'm pricing them out) but what happens in winter? EVs would be good but where does the electricity come from? Hydro, solar, and wind only does so much and even then certain groups don't want them where they're most effective. The big 3 are still needed in some form (nuke, coal, oil) and there has to be give-take on all parties to get the most efficient and envrionmentally friendly results. Europe can handle an increase because their mass transit system is much different than ours. Not maintaining roads and putting 100% of that money or jacking up taxes to build it isn't practical. It will need a "space race" type commitment to get it figured out. They also need to be designed efficiently. Here they want to build a commuter rail, for the least commuting workers to the fewest workplaces instead of from the commuting suburbs to the office parks and offices in the downtown area. So someone has an angle to get rich off it and it doesn't solve either the gas or commuting problem.
"The people who don't have the money to chnage their cars to fuel effiicient ones should have thought about that BEFORE they went out and bought gas guzzlers and big, cheap SUVs with deep discounts. No one forced them to pay $35K for a GM or Ford SUV so they can feel like they are sitting in their living rooms on the way to work." --> the least able to afford the price increases aren't the soccer moms driving SUVs.
So this assumption:
"I know people would scream and the Republicans would talk about how it would ruin our economy,..." is OK but this one:
"I am also frustrated at people, you included, lumping everybody as a leftist because we have an opinion gas consumption." is a no-no?
No use of cribbing or blaming on Asian countries when USA has 230 million vehicles with 1/2 of them being gas guzzlers.
No .2 Japan has only 70 million vehicles and China has 50 million with Indian, Russia, Brazil and European countries being far behind.
So first find out whether there is public transport in your area, if so start using it.
When you go for renting, leasing or buying a vehicle, consider a smaller one, hatch/wagons offer lot of cargo space for their
size and is a good bet.
Try carpooling / vanpooling as well.
Whenever a proposal for Light Rail comes in your area, please support it. Its there in 32 cities in US and is becoming popular worldwide.
If you want bigger vehicle with more fun, consider CUV. Even a SUV company like GM is planning to convert their SUV's to CUV's.
http://www.bloomberg.com/apps/news?pid=20601103&sid=ak87hDNumPjU
Times have changed.
No excuses...if they weren't soccer moms and couldn't afford it in the first place, then that's even more retarded. People have choices.
I'll give you a perfect example of retarded-ness. We have alot of hispanics in So Cal...many of them drive HUGE HUGE SUV's that probably cost at least $35K and easily run at least $100-150 in fuel per week if not more.
Why on earth would these retards purchase a car so wasteful for so much on salaries that probably are in the low $20K's if that (many of them on welfare and what not?).
You want my heart to burn for these types of people?
Then you have the ignorant arrogant rich [&#@%!] that live in places like La Canada who probably think their money (if they ever get around to paying their fair share of taxes) will save the world when THEY feel they are ready.
What my heart to burn for them? Most cars will do 99% of an SUV's job with at least 50% better fuel economy. What to tow something on the weekend? Rent a fking truck.
Buy a used motorcycle for commuting. 2-3k will get you a decent bike to help save fuel costs on any 4 wheeled vehicle. At least 40 mpg. There is a major "Fun" factor involved when your riding , the roads wouldnt get trashed as much, and if half of America was on Bikes we'd get rid of the traffic jams.
Wow, how come the pro high gas price people that respond here are so hateful? I thought liberals loved everyone. Guess I was wrong.
We had a mini van with a tiny 3.3 Liter engine. On a good day, it got 17 mpg. It was certainly not an suv and the mileage sucked. I read a lot of car mags. Many cars with little engines DO NOT get good mileage. I am sorry, a 4 banger should be able to get better than 20 -22 all around with real world driving.
3.3L Engine tiny! Holy cr@p batman! What on God's green earth would you consider large and would it fit in the state of Wisconsin?? You are correct, a minivan is not an SUV. But they are not in anyway efficient modes of transportation unless all seats are full. If you read a log of car mags, then that explains your opinion. There are no car mags that wax poetically about the efficiency of a vehicle. Instead they only drone on about how fast it goes or how many horse power. Four bangers frequently get well above 22 MPG.
Your perceptions illustrate how jaded we American are. We think we NEED big cars/trucks and that there is something wrong with small cars. Even at the expense of our children.
its common sense when you think about it. the price for fuel will not go down. the higher the prices rise, the people will purchase hybrid and electric cars. the more purchases of these types of vehicles the less money or sales the oil companies will make. when this happens the price of oil / fuel will keep rising, and so on, and so on. in the long run we will use less oil based fuels, but... 80% of green house gases is water. so the more vehicles that are developed that will emit clean waters vapor well contribute to higher humidity levels world wide. example: the movie "blade runner", in that movie, taken place in the future, it rained everyday from all the vehicle putting out water vapor from the exhausts of their vehicles. i'm not complaining at all, hell africa and other continents could use more water. but... this will also cause a difference in climate temperature. remember back in the 70's they claimed that we will be in an ice age by now. hey any improvement we can do to help our world is the right way to go. felix
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