U.S. Gasoline Demand Is At A Decline, Not Likely To Go Up Ever Again

While America has spent the past several decades being unapologetic about its oil use, all that is changing. By 2030, Americans will burn at least 20 percent less gasoline than today, even as millions of more cars hit the roads, AP reported.

Apparently the country’s gas usage is shrinking thanks to more fuel-efficient cars and government policies supporting more ethanol usage and increased public transportation.

Unlike 2008 when fuel consumption had fallen considerably and then picked up, industry officials think U.S. gasoline demand has now peaked. According to AP, it has declined four years in a row and will not reach the 2006 level again, even when the economy fully recovers.

In fact, the ground was shifting before the recession. The 2001 terrorist attacks, the war in Iraq, Hurricane Katrina and pump prices rising to a nationwide average of $3 a gallon for the first time in a generation reignited public debates about the political and economic effects of oil imports and climate change. Also, the popularity of SUVs began to wane, and the government started requiring refiners to blend corn-based ethanol into every gallon of gasoline.

According to government data, Americans are burning an average of 8.2 million barrels — 344 million gallons — of gasoline per day in 2010. That is less than 8 percent less than 2006.

The decline is expected to accelerate for several reasons:

* Starting with the 2012 model year, cars will have to hit a higher fuel economy target for the first time since 1990. Each carmaker’s fleet must average 30.1 mpg, up from 27.5. By the 2016 model year, that number must rise to 35.5 mpg. And, starting next year, SUVs and minivans, once classified as trucks, will count toward passenger vehicle targets.
* The auto industry is introducing cars that run partially or entirely on electricity, and the federal government is providing billions of dollars in subsidies to increase production and spur sales.
* By 2022, the country’s fuel mix must include 36 billion gallons of ethanol and other biofuels, up from 14 billion gallons in 2011. Put another way, biofuels will account for roughly one of every four gallons sold at the pump.
* Gasoline prices are forecast to stay high as developing economies in Asia and the Middle East use more oil.

As we’ve talked about in the past, Generation Y is also not as interested in owning a car as their parents.

Faced with the increasing environmental concerns, high unemployment rates and a preference for gadgets, most teenagers and twentysomethings are choosing to not own a set of wheels.

For one, technology allows them to stay in touch and communicate with one another, without leaving the comforts of their home. And lot of their work gets done online too, making them significantly less dependent on a car.

Secondly, several twentysomethings have faced financial set backs in the past couple of years, due to the job market, and don’t want to invest in a car.

Most importantly, they are now faced with the environmental consequences and oil dependency of generations before them.

Car manufacturers, on their end, are even marketing smaller, more fuel efficient cars to cater to this generation.

According to AP, vehicle miles traveled per licensed driver has begun to flatten in the middle of the last decade after years of sharp growth.

Just the shift away from SUVs, which began in 2004, has saved Americans $15 billion in gas, reported NRDC.

Of course, our decline in use will be more than offset by rapidly growing demand in China, India, the Middle East and Africa, but we’re definitely entering a world — where the U.S. is starting to see beyond gas, which is a HUGE step up.

source: alttransport