Wednesday, May 1, 2013

Have We "Solved" the US Energy Crisis? Update: No!

In the last couple of weeks I stumbled through some blog articles (e.g., These Charts Better Not Reflect The True State Of The US Economy) that describe an astonishing development: Gasoline consumption has collapsed! (... Not really: See update at the bottom.)
  • Feb. 1993: 57 million gallons per day
  • Feb. 2003: 61 million gallons per day (+7%)
  • Feb. 2013: 28 million gallons per day (-54%)
See the data for yourself at the U.S. Energy Information Administration. I captured the graph below.

If this is not a hacker's job, we are witnessing momentous changes in the energy field. No wonder that Tesoro-Hawaii cannot find a buyer for its refinery at Campbell Industrial Park for over a year.

Also, the implications for the Highway Trust Fund and State DOTs are enormous. Their funding has been cut in half.

If this pattern is sustained, then all climate initiatives need to be shelved... "2040 targets" are already met!

The following reasons may explain this trend in part. I guestimate that the factors I list below can cause an one third reduction but I am not convinced that they can cause a staggering 54% reduction:
  • Gas price: A 10% increase in fuel price may cause a 2% to 5% reduction in trips and/or trip length. High gas prices reduce discretionary trips but do not reduce trips with an important purpose such as work, school, trips to doctor and grocery store, etc.
  • Persistently high gas price may lead people to change location; they move closer to work or school and they may replace a low efficiency car with a high efficiency car.
  • Unemployment in the US is much higher than officially reported since people who have given up looking for work are no longer counted as unemployed.
  • There is some evidence that ties with unemployment that younger Americans drive less.
  • Hybrid cars, electric cars and cash-for-clankers cars replaced thousands of low MPG cars so roughly speaking the same thousands of vehicles now consume less than half that their predecessors did.
  • HOT lanes (that promote carpooling and provide uncongested travel) and transit may have caused a marginal reduction. 

UPDATE: Colleagues on the mainland and I are still investigating this because the data shown above are suspect. This EIA dataset of gas consumption is much flatter. Using these data, the annual consumption differences are as follows:
  • 2002 to 2012 = -1.6%
  • 2005 to 2012 = -8.2%
2005 was the year with the highest consumption, according to this set.

Better MPG across most light duty vehicles classes, Hybrids, EVs, Cash-for-clankers and a little less driving did cause a drop. An 8% drop is much more believable than a 54% drop. We still do not know if these are "data we can believe in."