US Demand for Gasoline Dropping

[rickaren]

US Demand for Gasoline Dropping



Dec 21, 2010

The United States is using less gasoline, and the cars many Americans are beginning to invest in -- hybrids, electrics and fuel efficient gasoline cars -- are one of the reasons why.

“In an interesting twist on conventional wisdom, Associated Press energy writer Jonathan Fahey reports today that America's demand for gasoline has declined four years in a row and will not reach the 2006 level again, even when the economy fully recovers,” USA Today says.

This news may be surprising because the US is the one of the world’s biggest gas guzzlers, but when you look at the facts, it makes sense. “The country's thirst for gasoline is shrinking as cars and trucks become more fuel-efficient,” the Associated Press explains, “the government mandates the use of more ethanol and people drive less.”

Other factors that have decreased our need for oil. “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,” the Associate Press continues. “Also, the popularity of SUVs began to wane, and the government started requiring refiners to blend corn-based ethanol into every gallon of gasoline.”

Then there’s the rise of hybrids and electric vehicles like the Nissan Leaf, which over time, will decrease our consumption and dependence on foreign oil. ‘’'People wildly underestimate the effect that all this is going to have on gasoline demand,’” says Paul Sankey, an analyst at Deutsche Bank who spoke with the AP. Sankey says that “by 2030 America will use just 5.4 million barrels a day, the same as in 1969. Aaron Brady, an analyst at CERA, predicts a more modest drop, to 6.6 million barrels a day.”

Ironically, the decrease should continue even though nearly 254 million cars on the road by 2020. Left Lane News points out that gasoline consumption could increase. “Although a sudden resurgence in the nation’s economy coupled with lower gas prices could lead to a small bump in fuel consumption, the current trend is expected to continue indefinitely – despite the fact that there will be 27 million more cars on our roads by 2020.”

LINK: US Demand for Gasoline Dropping - U.S. News Rankings and Reviews