Wednesday, September 28, 2016

Addicted to Oil:  U.S. Gasoline Consumption Is Higher than Ever

U.S. Gasoline Consumption per Day  (Source: Constructed by Lucas Davis (UC Berkeley) using EIA data ‘Motor Gasoline, 4-Week Averages.) Click to Enlarge.
August was the biggest month ever for U.S. gasoline consumption.  Americans used a staggering 9.7 million barrels per day.  That’s more than a gallon per day for every U.S. man, woman and child.

The new peak comes as a surprise to many.  In 2012 energy expert Daniel Yergin said, “The U.S. has already reached what we can call`peak demand.”  Many others agreed.  The U.S. Department of Energy forecast in 2012 that U.S. gasoline consumption would steadily decline for the foreseeable future.
Fast forward to 2016, and U.S. gasoline consumption has increased steadily four years in a row. We now have a new peak.  This dramatic reversal has important consequences for petroleum markets, the environment and the U.S. economy.
Can Fuel Economy Standards Turn the Tide?
It’s hard to make predictions.  Still, in retrospect, it seems clear that the years of the Great Recession were highly unusual.  For decades U.S. gasoline consumption has gone up and up – driven by rising incomes – and it appears that we are now very much back on that path.

This all illustrates the deep challenge of reducing fossil fuel use in transportation.  U.S. electricity generation, in contrast, has become considerably greener over this same period, with enormous declines in U.S. coal consumption.  Reducing gasoline consumption is harder, however.  The available substitutes, such as electric vehicles and biofuels, are expensive and not necessarily less carbon-intensive.  For example, electric vehicles can actually increase overall carbon emissions in states with mostly coal-fired electricity.

Can new fuel economy standards turn the tide?  Perhaps, but the new “footprint”-based rules are yielding smaller fuel economy gains than was expected.  With the new rules, the fuel economy target for each vehicle depends on its overall size (i.e., its “footprint”); so as Americans have purchased more trucks, SUVs and other large vehicles, this relaxes the overall stringency of the standard.  So, yes, fuel economy has improved, but much less than it would have without this mechanism.

Read more at Addicted to Oil:  U.S. Gasoline Consumption Is Higher than Ever

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