Why is US Oil Consumption Lower? Better Gasoline Mileage?

United States oil consumption in 2012 will be about 4.7 million barrels a day, or 20%, lower than it would have been, if the pre-2005 trend in oil consumption growth of 1.5% per year had continued. This drop in consumption is no doubt related to a rise in oil prices starting about 2004.

Figure 1. Comparison of Actual US Oil Consumption, with that that would have been expected if prior growth trend held. Actual based on EIA data.

Figure 1. Comparison of Actual US Oil Consumption, with that that would have been expected if prior growth trend held. Actual based on EIA data.

Oil prices started rising rapidly in the 2004-2005 period (Figure 2, below). They reached a peak in 2008, then dipped in 2009. They are now again at a very high level.

Figure 2. US crude oil prices  (based on average prices paid by US refiners for all grades of oil based on EIA data) converted to 2012$ using CPI-Urban data from the US Bureau of Labor Statistics.

Figure 2. US crude oil prices (based on average prices paid by US refiners for all grades of oil based on EIA data) converted to 2012$ using CPI-Urban data from the US Bureau of Labor Statistics.

Given the timing of the drop off in oil consumption, we would expect that most of the drop off would be the result of “demand destruction” as the result of high oil prices. In this post, we will see more specifically where this decline in consumption occurred.

A small part of the decline in oil consumption comes from improved gasoline mileage. My analysis incidates that about 7% of the reduction in oil use was due to better automobile mileage. The amount of savings related to improved gasoline mileage between 2004 and 2012 brought gasoline consumption down by about 347,000 barrels a day. The annual savings due to mileage improvements would be about one-eighth of this, or 43,000 barrels a day.

Apart from improved gasoline mileage, the vast majority of the savings seem to come from (1) continued shrinkage of US industrial activity, (2) a reduction in vehicle miles traveled, and (3) recessionary influences (likely related to high oil prices) on businesses, leading to job layoffs and less fuel use.

Gasoline Savings from Better MPG, Fewer Miles Traveled 

Figure 3 below shows how the consumption of gasoline, distillate, and “All Other” oil products has changed since 1994. (Distillate is used mostly as diesel fuel, but some of it is used for industrial purposes, and some it is used for home heating.)

Figure 3. US Oil Products Consumption, based on EIA data

Figure 3. US Oil Products Consumption, based on EIA data. 2012 is based on partial year data.

Of the three product groupings shown, gasoline1 consumption is the flattest. Under “normal” circumstances, we would expect gasoline consumption to continue to rise, along with oil products in general, as shown in Figure 1 at the top of the post.

The amount of gasoline consumed reflects at least two different influences (1) the number of miles traveled, and (2) savings due to more fuel efficient cars. Based on data compiled by the US Department of Transportation, vehicle miles traveled (VMT) were rising by  2.2% per year prior to 2004, then suddenly flattened (Figure 4, below) about the time oil prices started to rise significantly.

Figure 4. US vehicle miles traveled, actual (based on Department of Transportation data) and expected based on prior trend.

Figure 4. US vehicle miles traveled, actual (based on Department of Transportation data) and expected based on prior trend. 2012 is based on partial year data.

The drop in vehicle miles traveled greatly affects gasoline sales.  If vehicle miles traveled had continued to rise as quickly as in the early period, we would expect automobile mileage to be 21% higher than my current projection for the full year 2012, and gasoline use would be equivalently higher.

How do changes in gasoline sales track with changes in VMT? Figure 5, below, shows that they track fairly closely. Annual changes in gasoline consumption are a little below changes in VMT (averaging about 0.4% below VMT) .

Figure 5. Three year average changes in vehicle miles traveled (based on DOT data) vs changes in gasoline consumption (based on EIA data).

Figure 5. Three year average changes in vehicle miles traveled (based on DOT data) vs changes in gasoline consumption (based on EIA data).

It is also possible to calculate implied VMT per gallon of gasoline (Figure 6, below). This is somewhat of an apples to oranges comparison because VMT includes travel by vehicles using fuels other than gasoline (usually diesel, but occasionally natural gas or electricity). As a result, the calculated mileage in Figure 6 is higher than the actual average MPG for gasoline powered vehicles. If the proportion of gasoline powered vehicles in the mix stays fairly constant, the annual percentage change should still be accurate, though.

Figure 6. Vehicles miles traveled per gallon of gasoline based on DOT data, with trend line fitted by author.

Figure 6. Vehicles miles traveled per gallon of gasoline based on DOT data, with trend line fitted by author.

If we apply the 2004 rate of fuel usage (or MPG) to 2012 VMT, we find that the improvement in fuel mileage between 2004 and 2012 reduced fuel usage by 347 thousand barrels a day over the eight year period, which is equivalent to a reduction of about 43 thousand barrels a day, per year.

The total reduction in gasoline use between 2004 and 2012, relative to what would have been expected, (based on the trend line in Figure 1, assuming the mix of products each retain their 2004 proportions) is about 1.49 million barrels a day. Thus, this calculation implies that about 23% of gasoline savings is from better mileage; the other 77% is from driving fewer miles.

One point of interest is the fact that US population has recently been growing by 1% per year. Because of the growing population, a person would expect VMT to grow by at least 1% per year, unless per capita miles driven is shrinking.  Since 2004, vehicle miles traveled have been growing less rapidly than population growth. As a result, mileage per person has been shrinking, recently by a little over 1% per year. Prior to 2004, vehicle miles traveled were growing at 2.2% a year while population was growing at 1.1% per year, implying that per capita miles traveled were increasing by 1.1% per year.

How do vehicle miles per person go from increasing to decreasing? There are a couple of possible ways. One is by a reduction in the number of drivers; the other is by decreasing the number of miles driven for individual drivers. My friends who are automobile insurance actuaries tell me that at least part of the change recently is that fewer young people are driving.  This is not too surprising–young people today have very high unemployment rates, so they are less able to afford the cost of a car.

Fuel Savings for Distillate and for Other Oil Products

Figure 7, below, shows the trend in fuel consumption since 1994 for the same fuels as shown in Figure 3. It is clear from Figure 7 that gasoline and distillate consumption have followed fairly similar patterns. It is the “All Other” category that has shrunk markedly.

Figure 7. Trend in United States Oil Products Consumption since 1994, based on EIA data.

Figure 7. Trend in United States Oil Products Consumption since 1994, based on EIA data.

At least part of the reason the “All Other” portion is shrinking is the fact that the All Other category includes quite a bit of oil products for industrial use, and the amount oil products used by the industrial sector shrank by 7.9%, comparing 2011 to 1994.

We can also look at the use of other energy products by sector, to see additional evidence that the Industrial Sector is shrinking, or at least, not growing nearly as much as the other sectors are growing. For example, if we look at electricity use by sector, residential use is up by 41% since 1994, commercial use (office and stores) is up by 44% since 1994, while industrial use is down by 3%.

Figure 8. Trend in electricity use since 1994 by sector, based on EIA data.

Figure 8. Trend in electricity use since 1994 by sector, based on EIA data.

Also, between 1994 and 2011, use of natural gas by the industrial sector declined by 8.5% further suggesting that the industrial sector that is shrinking. One factor in this shrinkage is likely increased competition from China, once they joined the World Trade Organization in December 2001.

Of course, part of the reason for the lower growth in oil products use by All Other could be greater industrial efficiency. Industrial users, and users such a big agriculture and aviation, are in a position to see ways to reduce oil use quickly. Such approaches would include “no till” farming (often substituting oil-based herbicides for oil-based tilling) and cutting back on unprofitable airline routes, saving fuel by grounding underutilized jets and laying off workers.

Part of the reduction in All Other use, too, could be that at the high oil prices available recently, refiners can make more greater profits by  “cracking” and refining the heavy portion of oil, rather than sell it as products such as asphalt or residual fuel oil.  Because of this, refiners are making less of the “All Other” products, and more Distillate and Gasoline. Users of heavy products are forced find substitutes, such as diesel or coal or concrete.

Another point of interest is the fact that the trend in gasoline and in distillate consumption both roughly follow the trend in the number of jobs available in the US economy.

Figure 9. Trend in number of US Jobs versus US gasoline and diesel consumption, based on EIA data.

Figure 9. Trend in number of US Jobs versus US gasoline and diesel consumption, based on EIA data.

There is a theoretical reason why gasoline consumption might rise and fall with employment. People who have jobs can afford to buy cars and drive them. People who don’t, often can’t afford to drive.

Distillate use tends to bounce around more, as if businesses (who tend to use diesel fuel) are more influenced by economic conditions than individual drivers driving gasoline powered cars. The overall trend still seems to follow employment, though. This would seem to suggest that if less fuel is used by vehicles, this is often accompianied by fewer workers–either fewer drivers for trucks, or fewer workers making the goods carried in the trucks. There may be gradual mileage efficiency gains, but in the short run, the big fuel savings come from operational changes that lead to using fewer vehicles and also fewer workers.

Summary of Where Oil Savings Comes From

As stated at the beginning of the post, United States oil consumption is about 4.7 million barrels a day lower in 2012 than would have been expected based on pre-2005 patterns. The way that this savings breaks out by product grouping is as follows:

Figure 10. Breakdown of US oil consumption saving, based on author's calculations.

Figure 10. Breakdown of US oil consumption saving, based on author’s calculations.

Decreased gasoline usage due to improved gasoline mileage amounts to 7% of the total, decreased gasoline usage because of fewer miles traveled amounts to 25% of the total, and a decrease in distillate use amounts to 17% of the savings. The majority of the decrease, 51%, comes from a decrease in the “All Other” category, which is most closely related to a decrease in industrialization.

The way the calculation is made is as follows:  The trend line forecast of 2012 consumption of oil products shown in Figure 1 is distributed to product based on the product’s share of 2004 US oil consumption. The year 2004 is used as a baseline because it approximately represents the situation before the big rise in oil prices took place. The savings is then the difference between (1) these forecasts of consumption by product and (2) my estimates of 2012 actual consumption by product. The latter estimates should be fairly “solid,” because they are based on actual consumption through October.

Going forward, fuel efficiency changes are likely to play a larger role in fuel savings, because CAFE (Corporate Average Fuel Efficiency) Standards have been unchanged for about 20 years. For model years 2012 to 2016, they are again increasing, so auto makers are again making more of an effort to improve mileage.

Actual fuel efficiency gains in the next several years for the US fleet of cars will depend partly on the mileage improvements incorporated by manufacturers, and partly on how many of these more efficient (but also more expensive) cars are purchased. I have recently forecast that we will be entering another very-long recession in 2013. The recently announced decline in US GDP in the fourth quarter of 2012 is another indication in this direction. In a recession, it will be difficult to sell as many of the new fuel-efficient vehicles.

Another factor that is likely to be important for future actual vehicle mileage is the condition of roads. Mileage estimates are based on having good paved roads. If local governments find their budgets stretched thin, road maintenance may not get proper funding. We may even see more gravel roads, if asphalt is increasingly unavailable, and concrete is too expensive. 


[1] Gasoline as used in this analysis includes any ethanol that is blended in. This has been an increasing percentage over time, and now is typically 10% by volume. The addition of ethanol tends to keep mileage down because ethanol only gets about two-thirds as many miles per gallon as gasoline. I have not attempted to adjust for this. The mileage gain would be somewhat better, if ethanol had not been added to the gasoline. An increase in the ethanol blend to 15% have been approved. As this is phased in, it will also tend to depress mileage gains.

About Gail Tverberg

My name is Gail Tverberg. I am an actuary interested in finite world issues - oil depletion, natural gas depletion, water shortages, and climate change. Oil limits look very different from what most expect, with high prices leading to recession, and low prices leading to financial problems for oil producers and for oil exporting countries. We are really dealing with a physics problem that affects many parts of the economy at once, including wages and the financial system. I try to look at the overall problem.
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92 Responses to Why is US Oil Consumption Lower? Better Gasoline Mileage?

  1. At least the discussion is taking place within the actuarial profession in a formal manner. Accordingly, as economic growth expectations are ratcheted down, all manner of institutional assumptions are undermined. My hope is that at least some more enlightened individuals will also understand the implications for their expected life paths. I blogged about this recently here:


    I would certainly look forward to a post from you on the topic given your actuarial background.

  2. Toozy Psiatin says:

    Gail, please take statistic with a grain of salt, use common sense and make observations.

    So, people are driving less miles in the North America ?

    Waterloo, On, Canada. Last Sunday Feb3 around 11:45pm. Blowing snow, -15C.
    You may assume that all people are drinking tea and preparing themselves for the long working week ? Nothing of the kind. The road is literally jammed with cars in both directions.
    Where are all these people going and for what reason I have no way to know.
    People are driving more efficient vehicles ?

    OK, on the crescent where I live (about 70 houses), every single household has an SUV or Pickup track (sometimes both) in addition to 2 cars. Sales of pick up tracks are going through the roof in Canada. People found ingenious ways how to write off gas as business expenses and don’t care much about the price they pay at the pump. Obviously, it is easy to claim gas as business expenses when you have a track rather than a car. In addition, it seems that here in North America uneducated males desperately need pickup tracks to boos their egos at any cost.

    Another point is that with 67% of American population overweight or obese (> 30% obese) it is often physically impossible for the people to squeeze their grossly over sized bodies into the family sedan (let alone Honda Civic). Thus, SUV or pick up tracks are really needed at least for half of the population.
    Cars are made more energy efficient ?

    Well, pickup tracks and SUV are awful gas guzzlers by definition, for the simple reason that it takes much more energy to move an object 2-3 times heavier than an average car.
    To make an energy efficient SUV and claim that it decreased the total energy consumption is the same as to make vodka 39% alcohol (instead of the standard 40%) and claim that it solved the problem of alcoholism.

    Bests regards,
    PS. Just wanted to say I read and re-read all your postings for the last year and thank you for your very important work.

    • You are welcome.

      I haven’t looked at the tax code recently, but I know that in the US a few years ago, if a person had a small business (like an actuarial consulting firm), it was possible to write off the costs of the vehicle if it was over a certain weight (large SUV or pickup), but not otherwise. It is hard to think of a reason why a small actuarial consulting firm would need a big vehicle like that, but to get the write-off, that was what was necessary. I am sure that is what did/(perhaps still does) fuel part of the demand for these big vehicles.

      Also, every time my husband and I rent a vehicle, it seems like we get a lot of “flack” because of our choice of vehicle. If I rent one just for myself, the attendant can understand why I want such a small car (especially if someone else is reimbursing my costs). If we are renting a minivan to transport 6 or 7 relatives, the agent can’t understand why we don’t “upgrade to an SUV.” One time we got stuck with an SUV because the rental agency had nothing else. We were very unhappy with it, even though the higher fee was waived.

      • David F Collins says:

        Ms. Tverberg: Regarding the IRS vs Fuel Economy, that was implemented years ago in response to a desperate plea from the US auto industry, which was losing market share massively, but made money on large SUV and playtrucks. Of course, benefits did not last: just look at all the Manly Monster Trucks with Japanese surnames.

        Regarding auto rentals: Some years ago here in Chicago, we had the Mother of All Parties to celebrate my mother’s 100th birthday. My son (from megalopolitan Silicon Valley) and son-in-law (from southern Manhattan Island; that branch of the family is car-free) agreed to rent the biggest of all bwanamobiles. My son-in-law has a license but seldom drives and is quite uncomfortable behind the wheel. Fortunately, my Son started working on getting the Lincoln Navigator reserved months in advance. The rental outfits offered two cars for the price of one and all other enticements short of lap dancers and a couple magnums of champagne. My mother commented that it was getting to seem like a vaudeville comedy routine. The recent internet music video “United Breaks Guitars” reminded me of the bwanamobile rental agency. The party was absolutely wonderful, and those who came by bwanamobile had every bit as much fun as those who came by el or by bus: the mathematically inclined say, “Joy of celebration is independent of path!”

        • Thanks! I missed the story about the IRS wanting to help out US auto makers.

          I agree the joy of the celebration is independent of the path. I am one who has a hard time figuring out why a $50,000 car is worth 5 times as much as a $10,000 one, for example. If the purpose of a car is transportation, why pay more than the base amount? If it is to show off, rent something really “way out”.

  3. Toozy Psiatin says:

    Gail, could you provide a proof of your statement that high oil price has a permanent dampening effect on economy ?

    To me your point seems entirely valid but there is an influential school of thought claiming that once economy recovers from the initial shock and adjusts itself to the new price it can be booming along as before.

    Indeed, Germany, South Korea and Japan import 100% of their energy resources and don’t subsidize gas for consumers. In the same time these countries have robust export oriented industrial sectors and doing fairly well. Israel is a particular case in point, there economy is doing well in spite of sky high gas price in combination with huge military expenses, shortage of water and other issues.

    The statement regarding the relationship between high energy prices and economy is a critical one and it would be great if you could provide a conclusive (irrefutable) proof of your point of view.

    Thank you in advance

    • GermanStacker says:

      “Indeed, Germany, South Korea and Japan import 100% of their energy resources and don’t subsidize gas for consumers. In the same time these countries have robust export oriented industrial sectors and doing fairly well.”
      …that depends on how you define subsidy. I would certainly call the mountain of government and private debt a form of subsidy for our energy-intensive way of life, in the face of high oil prices.

    • Perhaps all those countries are converting their imported fossil fuel into “added value exporting stuff” better than others? It doesn’t mean that the fossil fuel that they base this upon becomes more abundant? Germany has also been fairly good at building up their renewable energy sources to be a bit less dependent on fossil fuel. The question remains how fast you can turn around to another and less energy intensive society. Those that don’t will clearly see recessions due to the high cost of the energy required to operate society, much like Gail shows so well in her articles here. If you don’t solve the problem at the root, but try to figure out smart ways of juggling fiat values, the truth will be revealed eventually – that it takes quite a bit of energy to do anything in this civilization, and a high energy dependent society is very vulnerable when the cost of resource extraction rises (not cost in dollars but in energy).

      Doesn’t Japan also have a very large debt problem?

    • The United State and Japan are both running huge deficits. This would seem to be partial proof of the continuing problem. The US’ deficit problem started in 2008, with the higher oil prices. I haven’t looked carefully at the Japanese situation, but it seems like the time when they were most successful was back when energy prices were low.

      In Germany’s case, the thing that allows it to continue to be as successful as it is, is partly keeping salaries down (through more cheap outside labor). The other thing is that Germany is getting the benefit of a Euro that is trading much lower relative to other currencies, than it would, if Germany were trading in its own separate currency. The low Euro allows Germany to sell the widgets it makes cheaply on world markets. Thus, Germany owes its success to the things that are causing the failure of Italy, Spain, Greece, Portugal, and Cyprus.

      I haven’t studied the Korean situation. I know that Korea’s per capita GDP is still quite a bit below of that of Europe and Japan. This would suggest that energy use by the population is still fairly low. Having a relatively warm climate and poor people is helpful in remaining competitive.

      Korea and Japan are both big users of nuclear–a fuel that helps keep ongoing energy cost down. The initial coasts aren’t very high either, if inexpensive designs are used on the front end. Fukushima seems to be an example of what happens when an inexpensive design goes wrong.

      I think part of what high oil prices (and high commodity price in general do) is reflect declining EROEI, and higher investment costs per unit of physical output. The world does not have unlimited resources to invest. If we have to concentrate an increasing share of them in commodities, and in particular, in oil and gas, it means fewer resources for other things.

      I keep finding additional pieces to this puzzle. I will be writing more about this issue.

      • GermanStacker says:

        And please let’s make a distinction between German Industry and German workers! The advantages of using a weak currency only apply to the export companies. Their profits have exploded, while even the official numbers tell us that real German income is at the level of 1993. That’s why we still have good employment. Most German couples need double incomes to make ends meet. Real estate is exploding because of (partly foreign) capital flight. Students can’t afford an apartment. The price of high quality import foods (like many fruits and vegetables) has risen painfully, and people are changing to cheaper products. Many feel poor in a rich (and still beautiful) country.

        • I haven’t visited Germany in a very long time. I have heard things have changed a lot there in recent years, with the lower wages and more immigrants.

          Based on what you say, I can see why many might feel poor.

  4. Reblogged this on evolveSUSTAIN.

  5. Toozy Psiatin says:

    “Doesn’t Japan also have a very large debt problem?”

    You know Japan is a mystery for me. They have a huge debt problem. In the same time the country has more than a trillion in US Treasures which yields them a tiny interest and will hardly ever be reclaimed. I don’t know much about finances but why they put money into this hole instead of repaying their own debt ?

    • I believe this has to do with where the Yen floats relative to the dollar. As I understand it, the US debt helps keep the Yen low relative to the dollar, and thus helps Japanese exports be more competitive.

      Japan is also paying much of their ongoing expenses with debt, so they are adding more debt each year. The US debt offset would be a one-time effect.

      • Toozy Psiatin says:

        Gail first of all thank you for clarification . More conclusive research on this critical issue is definitely warranted.

        Your claim that relatively warm climate is linked to low energy consumption is also requires a proof. I find your assumption unsubstantiated.

        Not sure if people in Texas use less energy than in Canada. I wouldn’t think running air conditioner year around in cars, homes and public places takes less energy then heating homes during winter months. Texas was largely uninhabited before air conditioning was introduced. Ditto goes for Saudi Arabia and many other countries.

        Besides places with warmer climate tend to be water deficient and often need water purification, desalination and other energy consuming technologies.

        Israel has very high energy consumption per capita. Air conditioning is everywhere, it is not possible to live without it. Home heating is absolutely required during 3 winter months. No mental or modern industrial work is possible without having a working space air conditioned. The problem is getting much worse with global warming.

        You are basically assuming that warmer climate is always associated with primitive societies which , of course, require less energy. That is not always the case.
        It may well have been in the past but definitely not anymore.

        In many warm places people there don’t want to wear a long cloth, ride a donkey and grow rice. They discovered the beauty of air-conditioning among other things.
        They want to be civilized. As Americans, if I can say that….

        • Les says:

          I’ve lived in Indonesia (right on the equator) without air conditioning. I’ve lived in the Philippines without air conditioning. I’ve lived and worked outdoors in Queensland without air conditioning. I spend a lot of time outdoors in Texas in summer without air conditioning. Air conditioning is nice at times, but a luxury. Wear light clothes, wear a hat, and drink plenty of water. But my wife doesn’t agree with me.

          On the other extreme, I’ve lived in Antarctica, and I’ve visited northern Alberta in February. Warm clothing only goes so far. Heating in cold climates is not a luxury. Without energy for heating you die.

        • Perhaps I should say that there are a lot of warm wet countries that don’t use a lot of energy per capita. Warm dry countries have a problem, if they want to support a fairly large population.

          The nordic countries and Canada use more energy per capita than the next tier down. Russia uses an amazing amount of energy, relative to its per capita GDP. Coal use started in the area around England, because the forest had been cut down early on, in a quest for heating fuel.

          I know that in Georgia, where I live, the houses are built less substantially than in Minnesota, where my mother lives. This keeps housing costs lower. The heating/cooling costs are lower as well.

          When I visited China, the areas I visited were a lot more like Atlanta in climate than Minnesota. Along the Yangtze, I was told people didn’t even heat their homes in winter. Beijing is colder, but it is still a lot warmer than Minnesota.

          Warm wet areas can have two crops a year, so can support a larger population on less land.

          Logic suggests that if solar energy is not provided, humans need to somehow provide a substitute. Humans historically have not used air conditioning. Our hairless bodies are made for a warm climate.

        • Paul Bouzide says:

          Air conditioning does use less energy at point-of-use in Arizona-style climates than heating does in Minnesota-style climates. Take the near extremes as a case in point: moving the ambient AZ 100F down to a comfortable 75F means moving 25 degrees from ambient. But ambient MN 10F up to a comfortable 65F means moving 55 degrees from ambient. And since A/C is electric, there are positives and negatives. The positives: a coal peak is probably later than an oil peak (coal prices are down considerably due to substitution of cheap gas at the moment). And alternatives such as hydro, nuclear and (somewhat) wind and solar also apply. The big negatives: I emphasize “point-of-use” because there is considerable >60% energy loss at generation an additional loss in transmission. For residential heating, the amount of waste heat from fuel burned on site is less (not sure how much less though). And there are arguably considerably greater externalities associated with electrical generation from coal (and quite possibly shale gas), so this point of generation waste has considerable impact.

          • Jan Steinman says:

            On the other hand, air conditioning is generally a want rather than a need. One can use evaporative swamp cooling, or simply soak your cotton clothing.

            Air conditioning uses a heat pump, so it is more efficient at lowering temperature than resistance heating is at raising it.

          • I have been told in the Atlanta climate, heating is more expensive than air conditioning. I am fairly certain that is the case in my own home, although I haven’t done the arithmetic.

  6. Steven Kopits says:

    That’s a very nice analysis, Gail. I’m personally not convinced that high oil prices must mean recession, but I think it’s reasonable to argue that it will imply anemic growth of the sort we’ve seen recently.

    • Thanks! I think the high oil prices are causing the government debt problems we have now. Trying to fix them will bring on recession.

      • GermanStacker says:

        Is it the first time you are saying that so clearly? No “part of the problem…” etc.? Anyway, what a huge contrast to most everywhere else. You can read hundreds of blogs and pages about the debt crisis, the wrong and selfish actions by bankers and politicians, where the word oil isn’t mentioned once. No big picture at all!
        If you already have to scare people, you should at least soften your statements by adding, politically correct, it’s because of “bad financial speculators”, “criminal gas companies” and “crazy gas taxes”. But implying that the price of oil might be high because of global supply and demand is considered heresy by anyone close to the mainstream. Just – why?

        • It is hard for me to see why so many can’t figure out the obvious. I think part of the issue is that people have been educated narrowly, with basically wrong lines of reasoning. Researchers reiterate lines of reasoning that those before themselves have used, in order to get articles approved by peer-reviewers. Researchers are under pressure to get n peer reviewed papers out per year. To do this, they must limit the scope of their papers to some tiny increment related to a well-trod path.

          On the plus side, my article Oil Supply Limits and the Continuing Financial Crisis was published by the journal Energy in January 2012, and is now shown as “Cited in Scopus by 9,” so some people are reading and referring to it. I put up an unofficial, free version of the article on Our Finite World, found here.

  7. Bill Simpson says:

    The baby boomers retiring at a rate of 10,000 a day might change the total amount of miles driven and fuel consumed too. Not having to drive to work every day makes a big difference in the amount of fuel many of them burn. The earliest boomers started retiring about 5 years ago.
    Smaller family size might have some impact on fuel consumption.

    • You are right. Ultimately, though, I think the number of miles driven is related to the number of people with jobs. If the retiree is replaced with a young person, that young person will then need to commute to work. So it will balance out.

      • Paul Bouzide says:

        I’m curious whether employed young people also use transit more (see http://www.uspirg.org/sites/pirg/files/reports/Transportation%20%26%20the%20New%20Generation%20vUS_0.pdf). There is certainly a draw to live in dense and culturally rich cities for employed young people, as well as a less entrenched cultural attitude to want to isolate themselves in a McMansion in a low-density suburb that’s impractical (to say the least) to serve via transit. A point similar to this can be made about the renaissance of freight rail in the US (and increasingly in Europe and Asia which is already served by passenger rail) which in the US is distillate-fueled (diesel) and is approximately 3X more efficient for each ton-mile of freight moved compared to trucks (see http://en.wikipedia.org/wiki/Energy_efficiency_in_transportation). And since rail capacity improvements are privately funded in the US, such decisions are based on ROI and available capital, whereas road infrastructure improvements (even for state of good repair let alone capacity increases) are starved for capital due to debt and politics. Yes I know my citations aren’t definitive, but they’re credible I think.

        • I expect the amount of transit use depends a lot on location. There are a few big cities with good transit systems, and even some small sections of a city like Atlanta that are well-served by transit. These may very well be attractive to young people. Otherwise, young people find themselves needing a car quite often, whether they want to or not. Judging from my nieces and nephews and children, cars are fairly common. I know my niece who is finishing a dental internship in Chicago is planning on buying a car, as soon as she finds a job, for example. As a student, she used public transit.

    • I retired in 1998 and we hit the road in our RV. It is the dream of many retirees to travel. Of course the price of oil was not what it was in 1998. I didn’t stop traveling until the price went through the roof. I don’t know how the RV business is doing but there seems to still be a fair share of RV coming down 101.

  8. Jan Steinman says:

    Hi Breaking, the question I always have is, “What ‘cha gonna do ’bout it?”

    People who are recently exposed to energy resource depletion often go through the Kübler-Ross “five stages of grief.” Others who are further along are making preparations of one sort or another. It seems certain that many are going to suffer and even perish. From the point-of-view of the future of humanity, this is one of Gail’s milder posts!

    Are you making plans or taking action?

  9. Pingback: Oil Consumption Analysis: Jobs, Robots, Manufacturing, Gas Mileage Improvement; What’s the Explanation for Declining Oil Consumption? | Top US News Today

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