US gasoline consumption may have peaked

Beginning of transformation?

Steve Hawley, Apr 14, 09.

American gasoline consumption fell 7.1 percent last year, an all-time record, and many industry experts think it will continue to fall long-term, according to the Wall Street Journal.

The article notes that one-tenth of crude oil in the US goes into gasoline tanks, more than is used by the entire Chinese economy. American drivers used 371.2 million gallons of gasoline every day in 2008, and the US Energy Information Administration expects that number to fall by another 6.9 percent to 345.7 million gallons per day in 2009.

Consumption fell last year largely as a result of record gas prices and the recession, but many analysts think this is the beginning of something bigger:

Exxon believes U.S. fuel demand to keep cars, SUVs and pickups moving will shrink 22% between now and 2030. “We are probably at or very near a peak in terms of light-duty gasoline demand,” says Scott Nauman, Exxon’s head of energy forecasting.

The article states:

The reasons include changes in the way Americans live and the transportation they choose, along with a growing emphasis on alternative fuels. The result could be profound transformations not only for the companies that refine gasoline from crude oil but also for state and federal budgets and for consumers. Much of contemporary America, from the design of its cities to its tax code and its foreign policy, is predicated on a growing thirst for gasoline.

It notes that more Americans are choosing to live near their workplaces, are using transit, or are working from home, and that alternative fuels are on the rise.

Declining fuel consumption has hurt federal transportation funding, which relies on the gasoline tax for revenue, and a number of US officials hope to phase out the fuel tax in favor of a vehicle-miles fee.

(Photo credit: rkimpeljr)