Oil Use Down in US, Way Up Globally

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.


  • caswelmo

    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.

  • mdensch

    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.

  • Charles

    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.

  • Armand

    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.

  • Anonymous

    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.

  • Anonymous

    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.

  • Anonymous

    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 SHIT for them…I hope they end up walking.

    Stupidity should be painful

  • Need2Change

    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.

  • Chamara

    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.

  • Anonymous

    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!

  • Urban Cowboy

    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 !!!

  • Anonymous

    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.

  • Anonymous

    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!

  • Anonymous

    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.

  • Collin Burnell

    Need2Change… I think I love you, man… :-) Assuming you are a man of course! :-p

    Here’s step #2: http://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.

  • Armand

    “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 shit. 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.

  • Gerald Shields

    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.

  • Anony

    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?

  • Max Reid

    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.

  • Anonymous

    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 assholes 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.

  • Anonymous

    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.

  • blackx

    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.

  • VaPrius

    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.

  • felix camacho

    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

  • michael a.

    The question is simple:

    Fossil Fuel Taxes today or Soylent Green for your kids and grandkids. You choose.

  • Simon Leo

    Oil is not only consume as petrol in vehicles but the plastic products you held in your hands.

    An alternative source can come from palm oil which essentially can be make into buckets, cups and other plastic products.

    The growing use of plastics in China and india also help drive up prices of oil. Unless alternative source such as palm oil is taken seriously oil will always be more than $100 for the long term.

    America’s big three needs to make small sub compact cars with good fuel efficiency without having to be hybrid. Cheap sub compact cars can help consumers switched from SUV more easily without feeling more pain in their pockets.

    US government must stat to explore alternative source of energy e.g build more nuclear plant, solar thermal plant and wind power station. The dependence on foreign oil is what makes USA weak. A strong USA makes a better world than one in heavy debt, busy fighting in IRAQ and slowing economy. Less expenditure on foreign OIL can channel more needed money to help managed the US economy and improve the life of americans.

    Simon, Singapore

  • Curious Mind

    Wow! I came here for a little research on hybrid cars, but have now lost all interest. Many of you who comment on this site are just as bad as those you poke fun of. Making fun of people who don’t think just like you and believing that you are somehow superior is hypocritical, to say the least. It’s a big turn-off for those who were once interested in moving into a smaller hybrid vehicle. SUVs, minivans, and trucks are talked trash about, despite that this very site offers information about hybrid SUVs, minivans, and trucks, hmm… Some of you have the nerve to stereotype those who don’t drive a hybrid vehicle by saying that they are selfish for wanting a larger, safer, more luxurious vehicle. Well, I’m sure if we looked beyond automobiles you would find at least one thing that we could do without. Everyone is their own worst hypocrite. If you really want to help the planet and want everyone to consider more fuel-efficient vehicles then start by changing your attitude. Otherwise people are going to associate hybrid cars with the jerks on this site. How can you expect people to change by calling them all idiots?! How did you expect them to react? It’s like pushing some in the hallway and expecting them to apologize for being in your way…doesn’t happen. Grow up people.

  • Stan

    Yes! Thank you for your thoughts.

  • John Jangle

    The problem with hybrids is that they take 3 times the amount of oil to manufacture compared with a non-hybrid similar in size. If every car was built a hybrid than we would run out of oil in 15 years, not 45. Not to mention that we will eventually peak oil and then it will become too expensive to burn.

    I hope that the ignorance of the people in this country, will stop listening to the news, and actually think logically about the truth.

    Fuel Cells are an absolute joke. Any Chemist or Scientist knows that Hydrogen does not come naturally by itself. You must rip it off of a Carbon or Oxygen. It takes energy to rip that off, more energy than you get from the Hydrogen itself. Therefore, you invest more energy than your return. Where do you get this energy to rip off the Hydrogen? We don’t have enough wind mills, hyrdro-electric dams, or solar panels to equal the amount of Hydrogen to fuel this nation.

  • MXD

    While conservation is good and should be pursued as much as possible (smaller cars, hybrids, etc), at this point we in the US need to do two things – loosen the ban on nuclear reactors and the storage of it’s eventual radioactive waste (btw – Yucca Mountain can NOT be the only safe place – this is a BIG country!) and, second, loosen the ban on domestic oil drilling. I love nature as much as anyone, but we’ve reached the point where we have no choice – we in the US have GOT to become energy independent ASAP. And while scaling up the nuclear and domestic oil machines will take 5 years (at least), we have very little choice. In the meantime, it appears that any and all conversation done domestically by environmentally and, more importantly, price concious Americans will be MORE than offsett by the increasing use of oil abroad (China and India, especially). So oil prices will continue to rise. So, buy an feul efficient car, turn down the AC, (though, for me, fans are fine), become more practical about how much of Northern Alaska (the part NO ONE ever sees…) will remain pristine, and write your congressman about spending MORE government funds on alternative energy research, especially solar. (I doubt wind energy is scalable enough to be significant, but who knows…). Let’s face it – In the short term (the next 10 years), we in the US will see a continuing decline in our standard of living. Basically, due to globalization, the rest of the world is catching up, at our expense. The “two ocean buffer” that has allowed this country to prosper in isolation is no longer enough.

    In the meantime, we also need to start not only balancing the US Federal budget, but PAYING OFF OUR 9 TRILLION IN NATIONAL DEBT. We pay over 300 Billion a year alone in servicing that debt, but, I’m afraid, most politicians don’t have the GUTS to speak about it. And WHO do you think is holding much of our US 30 year bonds? How about the same countries who are getting rich from our foreign oil dependence??

  • Uncle B

    If the U.S. had decided to be a moral people, and leaving Iraqi oil alone, decided to develop the South Western deserts, with the technology of the times, solar/thermal installations, for the same amount of money as that war cost, today, we would be tapping into the largest, renewable, sustainable, energy source the world has ever known. It would have paid every energy bill in the U.S.A. for maintenance fees only – FOREVER! It is an oil well that can NEVER run dry! After the millions of murders, and billions of dollars, borrowed from our children’s futures and spent, with thousands of our own and others maimed and disfigured for life, millions of families utterly destroyed, ours and theirs, we are no closer to Iraqi oil production than the Iraqis are!
    The next time you hear a blithering idiot spoiled brat, drunken, drug addicted, sociopathic, rich daddie’s boy, stand at a microphone and threaten YOUR safety with someone else’s weapons, remember what you lost America, remember, and weep!