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Guest Post: U.S. Gasoline Consumption Plummets By Nearly 75%

Tyler Durden's picture




 

Submitted by Jeff Nielsen via BullionBullsCanada blog,

Regular readers are familiar with my narratives on the U.S. Greater Depression, and (in particular) some of the government’s own charts which depict this economic meltdown most vividly. The collapse in the “civilian participation rate” (the number of people working in the economy) and the “velocity of money” (the heartbeat of the economy) indicate an economy which is not merely in decline, but rather is being sucked downward in a terminal (and accelerating) death-spiral.

However, even that previously published data, and the grim analyses which accompanied it could not prepare me for the horror story contained in data passed along by an alert reader. U.S. “gasoline consumption” – as measured by the U.S. Energy Information Administration (EIA) itself – has plummeted by nearly 75%, from its all-time peak in July of 1998. A near-75% collapse in U.S. gasoline consumption has occurred in little more than 15 years.

Before getting into an analysis of the repercussions of this data, however, it’s necessary to properly qualify the data. Obviously, even in the most-nightmarish economic Armageddon, a (relatively short-term) 75% collapse in gasoline consumption is simply not possible. Unless we were dealing with a nation whose economy had been suddenly ripped apart by civil war, or some small nation devastated by a massive earthquake or tsunami; it’s simply not possible for any economy to just disintegrate that rapidly, without there being some ultra-powerful exogenous force also at work.

So how can this raw data, produced by the government itself, be explained? To begin with; the government chooses to measure U.S. gasoline consumption in a very odd manner: by measuring the amount of gasoline entering the domestic supply-chain rather than by measuring actual consumption at the other end of the supply-chain – i.e. “at the pump”.

Why does the U.S. government, which (among other things) leads the world in the manufacture of statistics not produce any simple/direct measurement of gasoline consumption? How can the St. Louis Fed produce nearly 100 different charts on gasoline and diesel prices (for any/every price-category which can be imagined by these statistics geeks), but not a single chart on gasoline supply/demand?

There are several reasons for this unbalanced, anomalous, and simply absurd statistical methodology. First of all; the reason why the U.S. government produces a near-infinite number of charts on prices is because prices are what the Gamblers (i.e. bankers) use as the basis for their $100’s of trillions in gambling in the rigged casinos which the bankers call “markets”.

While supply/demand data is of utmost importance in the real world; the banker-gamblers don’t dwell in the real world. As regular readers already know; their derivatives casino, alone, is roughly twenty times as large as the entire global economy. To the bankers; the “real world” is nothing but fodder for their insane gambling.

Why use this data, at all, since it is such an inferior/distorted means of measuring U.S. gasoline consumption? Because the EIA uses exactly the same data to publish its own “estimates” of U.S. gasoline consumption:

Note: Product supplied measures the amount of gasoline that went into the supply chain and is used as a proxy for gasoline consumption. [emphasis mine]

The other half of this ridiculous statistical hodge-podge, where endless quantities of trivial/irrelevant price data are trumpeted, while any/all data which actually measures the (real) economy is suppressed (if not buried entirely) displays a government desperately trying to hide this massive economic collapse.

 

If you choose to measure the amount of gasoline leaving U.S. refineries and entering domestic inventories and call this “gasoline consumption”; you can hide the actual collapse in gasoline consumption – until those retail inventories are overflowing, and there is simply no more room in the storage tanks.

This is what we see today in the U.S.: a gasoline market which had been deliberately-and-dramatically over-supplied with gasoline at the wholesale end of the supply-chain (the refineries) has now practically ground to a halt. The same nation which previously amazed the world as it accumulated more automobiles and more miles of highways per capita than any nation on Earth (and by a huge margin) now has such an insane glut of gasoline that it’s massive chain of refineries have had to simply turn off the taps – until this pathetically anemic economy manages to burn-off some of that glut.

This conclusion becomes even more visible/obvious when we view the gasoline data just from the start of the mythical “U.S. economic recovery” to the present. At the start of the “U.S. recovery”; U.S. gasoline consumption was at a rate of 52 million gallons per day (already more than 20% below the 1998 all-time peak). In the five years since the start of this pretend-recovery; U.S. gasoline consumption has fallen all the way to 18 million gallons per day.

Since the beginning of “the U.S. economic recovery”; U.S. gasoline consumption has plummeted by nearly 2/3. As the pseudo-recovery began, and supposedly “strengthened”; U.S. refineries were ordered to fill up the inventories of their dealer network, in anticipation of the increased gasoline consumption which would have occurred in any real “recovery”.

But there never was an increase in U.S. gasoline consumption, because there never was a U.S. economic recovery. Rather, the Greater Depression has simply (and relentlessly) continued to pulverize the U.S. economy like a meat-grinder. To hide this devastation (as well as is possible), the government produces a wide array of its pseudo-statistics, that all contain myriad “adjustments” – which make it possible for these liars-with-numbers to distort the statistical picture of the U.S. economy beyond recognition.

Meanwhile, any/all statistics which measure raw data (and thus cannot be perverted with “adjustments”) are either suppressed (like the civilian participation rate), or not even measured, at all – as is the case with U.S. gasoline consumption. At the retail end; none of the “sales” statistics are adjusted for inflation, not even with the absurdly-fraudulent “CPI” numbers.

By not deflating sales data (at all) the collapse in U.S. gasoline consumption “at the pump” is hidden within all this unreported inflation. As explained in previous commentaries; it is this same, unreported inflation which allows the U.S. to convert its large, negative, GDP readings (which would otherwise reveal the Greater Depression) into “economic growth”. It is this same, unreported inflation which allows the government (and employers) to hide the fact that U.S. wages have collapsed by more than 50%.

But what the liars-with-numbers cannot hide (any longer) is the collapse in U.S. gasoline consumption which has accompanied the continued, downward spiral of the Greater Depression. The storage tanks are now all full. The only way to (temporarily) hide the collapse in U.S. gasoline consumption any further would be to construct even more storage facilities. However, there is no possible economic justification for increasing storage capacity in a market of steadily/relentlessly declining demand.

Indeed, the exact opposite is true. The U.S. economy of the 21st century (a mere hollowed-out husk of what it was only 20 years earlier) will require less and less gasoline storage facilities over time, reflecting a supply network for a steadily shrinking market. As the One Bank completes its plundering of the U.S. economy, and completes its transformation of the U.S. Middle Class into the Working Poor, it is also simply using up more and more of its economic lies.

The Great Inflation Lie will continue to allow the U.S. government (and other Western governments) to crank-out absurd/imaginary positive numbers for GDP. It will continue to allow the U.S. government to crank-out absurd/imaginary numbers for retail sales (and hide the ongoing collapse of the entire U.S. retail sector).

But it can’t hide the fact that U.S. refineries have nearly stopped producing gasoline for the most-motorized society/economy the world has ever seen. It can’t hide the fact that there haven’t been so few people working in the U.S. economy (on a percentage basis) in 35 years.

Readers who are stubbornly faithful to the plethora of pseudo-statistics which the U.S. government uses to hide this collapse may have been skeptical of my original denunciation of the “U.S. economic recovery”. They may have been more skeptical with assertions that this Wonderland Matrix of lies is being used to hide a Greater Depression.

However, there is no further room for skepticism when official, government numbers indicate a near-75% collapse in U.S. gasoline consumption over a mere 15 years, and a 65% collapse in consumption since the start of the (supposed) Recovery. Numbers such as this can only be encapsulated with acronyms like “DOA”.

When we look at the EIA’s “gasoline consumption” numbers, and when we see the St. Louis Fed’s chart of the U.S. velocity of money (heartbeat of the U.S. economy); we don’t see an economy which is dying. We see an economy which is already dead.

 

 

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Fri, 05/30/2014 - 18:33 | 4811175 TeamDepends
TeamDepends's picture

People are walking (dead) more....

Fri, 05/30/2014 - 18:46 | 4811212 Dick Buttkiss
Dick Buttkiss's picture

If you gotta channel stuff the cars, it makes sense that you gotta channel stuff the stuff they run on.

Fri, 05/30/2014 - 18:52 | 4811230 kaiserhoff
kaiserhoff's picture

Looked at a camper last week that's been modified to run on diesel or veggie oil.

Render the lard from a few fat banksters, and you're ready to go;)

Fri, 05/30/2014 - 18:55 | 4811245 SWRichmond
SWRichmond's picture

the Peak Oilers are not going to like this.

Fri, 05/30/2014 - 19:01 | 4811267 macholatte
macholatte's picture

 

 

Wasn't that article more about how government published bullshit statistics that can't be relied on rather than anything else, like the plausibility of a 75% drop in the consumption of gasoline? I think it was a complete waste of time to read and an even bigger waste of time to write.

 

 

There are lies, damned lies and statistics.

Mark Twain

 

I can prove anything by statistics except the truth.

George Canning

 

How do you nurture a positive attitude when all the statistics say you're a dead man? You go to work.

Patrick Swayze

 

Statistics say that I'm supposed to be in jail. And I'm not supposed to be alive.

Tyler Perry

 

 

The statistics on sanity are that one out of every four Americans is suffering from some form of mental illness. Think of your three best friends. If they're okay, then it's you.

Rita Mae Brown

Fri, 05/30/2014 - 19:03 | 4811272 centerline
centerline's picture

+1.  Calling BS on the figure quoted myself.

Fri, 05/30/2014 - 19:19 | 4811324 ACP
ACP's picture

Hey don't send this article to Obombya. He'll call it a victory for electric cars.

And people will believe him.

Fri, 05/30/2014 - 19:24 | 4811338 Caviar Emptor
Caviar Emptor's picture

Bi Bi (-flation) Miss American Pie

Biflationary (ie paradoxical) economic trend of the week: collapsing demand driving prices ever higher! For US gasoline just as with Japan inflation soaring just when retail sales are collapsing

Fri, 05/30/2014 - 19:28 | 4811357 LetThemEatRand
LetThemEatRand's picture

Funny how the stuff people need to live (fuel, housing, food) are excluded from CPI.

Fri, 05/30/2014 - 20:51 | 4811577 CPL
CPL's picture

And when they do, the sample set selected is hand picked.

http://www.amazon.com/How-Lie-Statistics-Darrell-Huff/dp/0393310728

Good book btw.

Fri, 05/30/2014 - 20:54 | 4811586 Shocker
Shocker's picture

Fall in Gasoline Comsuption..... umm maybe because the economy has not recovered.

Layoff / Closing List

http://www.dailyjobcuts.com

-

 

Fri, 05/30/2014 - 21:09 | 4811631 SafelyGraze
SafelyGraze's picture

"U.S. Gasoline Consumption Plummets"

Because Tesla

Fri, 05/30/2014 - 22:28 | 4811783 0b1knob
0b1knob's picture

Chart is bullshit as others have pointed out.   Miles driven per year has been flat since 2007.  See:

http://advisorperspectives.com/dshort/charts/indicators/miles-driven.htm...

But are still near all time highs.  No one is buying what the author of this article is selling.

Sat, 05/31/2014 - 00:23 | 4811975 bonin006
bonin006's picture

I think I would have noticed an improvement in my commute time if there were only 1/4 as many cars on the road as 10 years ago

Sat, 05/31/2014 - 05:10 | 4812157 svayambhu108
svayambhu108's picture

This is not cosumption data this is data only for the sales from US refineries, now US imports more from other refineries around the world to keep the consumption the same. You should look into it I am amazed nobody saw the error. 

 

Sat, 05/31/2014 - 06:24 | 4812184 negative rates
negative rates's picture

This is utter nonsense, and coming from a jeff no less.

Sat, 05/31/2014 - 08:45 | 4812285 Oh regional Indian
Oh regional Indian's picture

It's the cadillac ELR I'm telling ya! It's put the freeze on fuel.

Since this is vehicle thread, if you've ever heard of Chris Pfiffer, you will forget cars.

And anyways, the end of th eage of oil is nigh.

Finally. The US and allied and axised countries are using it, burning it in the most insane display of how EROEI does not matter.

Yesssss, let's spend 50 billion in fuel and machinery to get us a 10 billion dollar supply!

Enjoy this...

http://aadivaahan.wordpress.com/2011/09/28/the-dance-of-man-and-machine/

 

Sat, 05/31/2014 - 01:10 | 4812025 Paveway IV
Paveway IV's picture

Weekly Motor Gasoline Stocks reported by the U.S. Energy Information Administration since 1990: essentially flat. The article uses the wrong graph, but gasoline consumption has been declining slightly since 2006.

 

Refiners Motor Sales Gas Volumes are broken down into two categories of sales types:

1) U.S. Total Gasoline Retail Sales by Refiners (Sales to End Users) used in article - refiners are just leaving the retail channel since 2006.

and

2) U.S. Total Gasoline Wholesael/Resale Volume by Refiners

Reporting for 2) in total stopped in 2006, so the chart is deceptive. Totaling each of the subcategories shows a subsequent decline of 20 million gallons/day to 2014. You can see the approximate effect in Weekly U.S. Product Supplied of Finished Motor Gasoline chart.  Early 2005 was when retail prices solidly cracked the $2.00/gallon average.

Sat, 05/31/2014 - 01:18 | 4812030 daveO
daveO's picture

Most of the FUV's, here, have been replaced with Honda's and Kia's. It's a lot better being tailgated by a Kia, these days. 

Fri, 05/30/2014 - 23:39 | 4811906 TrustbutVerify
TrustbutVerify's picture

LOL

Fri, 05/30/2014 - 21:46 | 4811716 Pickleton
Pickleton's picture

And prolly to some extent because people are opting for the Camry instead of the Suburban.  When gas was $4+ a couple years back, I bought a POS little camry because it didn't cost me $150 to fill every week like my F-150.

Fri, 05/30/2014 - 23:02 | 4811846 prains
prains's picture

....it has more to do with zombies not being able to drive

Sat, 05/31/2014 - 00:22 | 4811971 I MISS KUDLOW
I MISS KUDLOW's picture

demand was artificial for 40 plus years,,,,free gas from overseas plus the last 15 years people were tapping their houses for gas and food money everything was fake

Fri, 05/30/2014 - 21:56 | 4811736 Pumpkin
Pumpkin's picture

Anti-Christ = Anti-Truth.  You don't expect them to speak the truth do you?

Sat, 05/31/2014 - 09:54 | 4812396 Greenskeeper_Carl
Greenskeeper_Carl's picture

Everyone NEEDS a new flat screen. And as cheap as they have gotten, along with the new iPad, clearly offsets any little bit on inflation you might have seen in food. I mean come on, not only do these TVs play shows, they also spy on you for the govts! It's like 2 for the price of one

Sat, 05/31/2014 - 09:38 | 4812376 ejmoosa
ejmoosa's picture

IF we lose our economies of scale, we will not be able to afford the lifestyles we have become accustomed to.

Sat, 05/31/2014 - 23:25 | 4813734 boogerbently
boogerbently's picture

Green shoots !!

Fri, 05/30/2014 - 19:33 | 4811366 kaiserhoff
kaiserhoff's picture

Yeah, this is bad data.

Doesn't compute with pricing pressure or vehicles on the road.  The trend may be right, but 75%?

I think we might have noticed, even without the media mavens and goobermint drones.

Sat, 05/31/2014 - 08:59 | 4812316 sessinpo
sessinpo's picture

macholatte     Wasn't that article more about how government published bullshit statistics that can't be relied on rather than anything else, like the plausibility of a 75% drop in the consumption of gasoline? I think it was a complete waste of time to read and an even bigger waste of time to write.

---

So last week the government reported a 95% drop in CA oil shale (which would be bulllish with less supply)

Now the government reprorts a drop in demand (bearish).

Which BS government report are you going with? I would suggest that actual retail sales is a better indicator then projected guestimates of whta is underground.

Sat, 05/31/2014 - 09:14 | 4812339 SheepDog-One
SheepDog-One's picture

Yea I think they're just clearing out a bullshit set of data so they can repump it later.

Fri, 05/30/2014 - 19:01 | 4811268 centerline
centerline's picture

For the record, I am not a "peak oiler" as everyone like to label them.  I am more of a "growth cannot continue forever" sort of person.

For the record, that was a real odd statement.  Demand destruction is an expected outcome as EROEI peaks, no matter how you look at it.

Just saying...

Fri, 05/30/2014 - 19:18 | 4811319 cougar_w
cougar_w's picture

And demand destruction leads eventually to good old fashion wholesale destruction.

The destroyer happens to be a buddy of mine. She's not in a big hurry but I happen to know she's keeping her axe sharp for the day just say'n.

Fri, 05/30/2014 - 19:24 | 4811340 centerline
centerline's picture

Yup.  Considering the whole damned system is predicated on growth, social complexity, nasty-ass long JIT supply lines, etc...

damn...

Fri, 05/30/2014 - 21:24 | 4811538 dryam
dryam's picture

Peak cheap oil is much different than peak oil. We have hit peak growth because we are past peak cheap oil / fossil fuels. The world will be in a state of contraction forever. It's a nasty concept and an extremely unpleasant truth but it's reality.

I would propose that almost all of the manipulated parts of the economy and government numbers are an effort to obfuscate the fact we are past peak cheap oil.

Fri, 05/30/2014 - 23:22 | 4811872 centerline
centerline's picture

We are definately on the same page.  This is a perfect storm scenerio as a result of relentless "growth."

Sat, 05/31/2014 - 03:03 | 4812116 Bloody Muppet
Bloody Muppet's picture

Oil is more expensive and so everything that requires energy, which is everything, is also more expensive. So people are driving more normal cars instead of tanks with shitty mileage. Quelle surprise.

Sat, 05/31/2014 - 07:36 | 4812228 holmes
holmes's picture

"The world will be in a state of contraction forever."

O, great and powerful OZ can you tell me how to get to Kansas?

Dorothy

Sat, 05/31/2014 - 10:16 | 4812426 Oracle of Kypseli
Oracle of Kypseli's picture

Bicycle?

Sat, 05/31/2014 - 10:14 | 4812423 detached.amusement
detached.amusement's picture

I love it when people write that, but conveniently leave out the fascism

Fri, 05/30/2014 - 19:33 | 4811365 max2205
max2205's picture

Where are all those tankers sitting waiting to off load at $300 per barrel

 

Oil and gas don't go bad

$4.25 on the east coast. ...what a rip off

Fri, 05/30/2014 - 20:02 | 4811441 JohnnyBriefcase
JohnnyBriefcase's picture

Gasoline will slowly deteriorate over time and eventually be worthless.

 

Not that I'm defending the retail price especially since...

 

"The U.S. will surpass Russia and Saudi Arabia as the world's top oil producer by 2015, and be close to energy self-sufficiency in the next two decades, amid booming output from shale formations, the IEA said."

-Bloomberg

 

Fuck everyone.

Fri, 05/30/2014 - 23:42 | 4811911 BeanusCountus
BeanusCountus's picture

Not sure this is correct at all. These are projections. And they are based on all of our "shale" resources. They are certainly there. But they are going to be more expensive to extract than initial estimates. Good news: we have it if we need it. Bad news: price is going to be higher than we thought. "Booming output" will only happen if there is "booming input". As in booming "capital" input. But its still way better than bein a hostage to OPEC.

Sat, 05/31/2014 - 03:12 | 4812121 Rock On Roger
Rock On Roger's picture

I'm sure it is not correct at all.

 

http://www.zerohedge.com/news/2014-05-22/us-shale-oil-miracle-disappears

 

Stack On

Sat, 05/31/2014 - 03:04 | 4812118 Bloody Muppet
Bloody Muppet's picture

Fuck yeah!

Fri, 05/30/2014 - 20:37 | 4811546 Flakmeister
Flakmeister's picture

Any idiot sitting off the coast with a tanker full of oil when the futures curve is in backwardation is a moron on par with the clown that wrote the article at the top of the page... 

Sat, 05/31/2014 - 03:14 | 4812123 Rock On Roger
Rock On Roger's picture

It rained today.

Climate change...

Sat, 05/31/2014 - 15:01 | 4812781 Flakmeister
Flakmeister's picture

Keep trollin' buddy, maybe you'll catch something...

Sat, 05/31/2014 - 20:01 | 4813407 Ident 7777 economy
Ident 7777 economy's picture

Almost forgot 17+ yrs no warming and FLAK is still all-in for GOBULL WARMING.

Flak must be govt fLACKEY. 

Sun, 06/01/2014 - 00:54 | 4813811 Flakmeister
Flakmeister's picture

zzzz....

Mon, 06/09/2014 - 05:34 | 4836387 Lore
Lore's picture

Flak will come around. It's just going to take more in-your-face data, exposure of lies and climategates.

Sat, 05/31/2014 - 09:40 | 4812379 Raging Debate
Raging Debate's picture

Flakmeister - That did happen in 2008 or 2009. Goldman leased 26 miles of tankers stored with oil. I will post that link in a couple weeks from my site. I have some old archives worth posting. So Max225 is right to question how much scarcity is artificially created.

I agree with you on the posted article numbers of decline. AAA publishes some decent info on consumption. Anyways, whatever is published believe it is less than 20%. I imagine one factor not discussed much is how much consumption has declined from telecommuting in addition to the high price. Having it cost $15 for a joy ride or see a bud the next town over even with a car that gets 30 mpg is a consideration for many I am sure.

Sat, 05/31/2014 - 10:24 | 4812436 Flakmeister
Flakmeister's picture

Yes, it did happen to some extent, but it wasn't 26 miles of tankers leased by Goldman...

It did squat to effect the market, simply do the math, at any point there is about 2 billion barrels of oil sitting above ground in tanks/transit etc...  Adding a few million barrels does little to change the balance. It was arbitraging day rates and the futures curve...

Goldman made few bucks, BFD, this ranks with the most benign of their sins...

Fri, 05/30/2014 - 19:05 | 4811281 Redneck Hippy
Redneck Hippy's picture

And yet I still paid $3.50 for a gallon of gasoline today.  If demand sucks so bad, why doesn't the price go down, I wonder.  The Fix is in.

Fri, 05/30/2014 - 19:15 | 4811308 Redneck Hippy
Redneck Hippy's picture

The figures quoted are "Retail Sales by Refiners."  Now maybe back in the day, when every oil company was vertically integrated, refiners sold a lot of retail gas.  But I'm pretty sure that most gas sold by refiners today is wholesale.

Fri, 05/30/2014 - 20:16 | 4811482 kaiserhoff
kaiserhoff's picture

Good catch.  Oil companies have been selling off retail operations.

Also, Europe went to diesel big time thanks to their high taxes and greenies.   You can't build a new refinery and they can only be reconfigured to a point.  Sooooo... Europe exports gas to us, we export diesel to them.  Headline has nothing to do with the real world.

Fri, 05/30/2014 - 21:19 | 4811657 Rubbish
Rubbish's picture

The refined oil is loaded on tankers, paperwork switch-a-roo and then brought in as an import. Just a little mark up won't hurt but will certainly hurt for the middle class at the pump. See the increase in this scam, they all do it now. How do you think the oil companies increase profits?

 

Just load it on the tanker, the CEO needs a bigger bonus.

Fri, 05/30/2014 - 21:03 | 4811612 Rooster68
Rooster68's picture

Of course it is. The EPA and ethanol push refining cost ever higher. Get the EPA to quit putting your "tacos" in your gas tank and the cost would drop to $1 a gallon from the refinery.

Fri, 05/30/2014 - 21:51 | 4811723 Pickleton
Pickleton's picture

"Get the EPA to quit putting your "tacos" in your gas tank "

It must be Friday. That took me a second to figure out how the hell I'm putt ing tacos in my tank.  LOL

Sat, 05/31/2014 - 16:14 | 4812908 Flakmeister
Flakmeister's picture

If it was only so easy....

Sat, 05/31/2014 - 03:07 | 4812119 Bloody Muppet
Bloody Muppet's picture

If demand sucks so bad, why doesn't the price go down, I wonder.  The Fix is in.

 

Oil is a GLOBAL commodity, just because Americans are driving fewer miles doesn't mean Indians and Chinese are.

Sat, 05/31/2014 - 08:20 | 4812264 MachoMan
MachoMan's picture

If demand sucks so bad, why doesn't the price go down, I wonder.  The Fix is in.

Because the quantity demanded is dictated by the price, not vice versa...

Fri, 05/30/2014 - 19:20 | 4811328 Dick Buttkiss
Dick Buttkiss's picture

I'm a Peak Oiler myself, at least in the sense that peak cheap oil is upon us. Therefore, if the oil industry can't make money at $3+ a gallon, and if Joe Six-Cylinder can't afford any more than that (because he either doesn't have a job or doesn't have one that he can make ends meet on), then gas simply won't be produced, and down The Road we'll go.

To say nothing of what the real cost of oil is — http://www.evworld.com/news.cfm?newsid=11520 — and this was eight fucking years ago!

 

 

Fri, 05/30/2014 - 22:38 | 4811799 dryam
dryam's picture

The man who was behind that article died 2 years later.  I wonder if he owned a nail gun, spent much time in his hot tub, or had trouble falling off enbankments.

Fri, 05/30/2014 - 20:19 | 4811490 Jumbotron
Jumbotron's picture

"the Peak Oilers are not going to like this."

That's a completely horseshit answer.  You can and have done MUCH better.  Oil consumption is global.  Where as the west is declining and some of that evidence is showing up in decreased gasoline usage in America.....it is MORE than made up for in the emerging economies.

No matter the gasoline usage in America....the facts remain.  At one time it was easy and cheap to get oil like this......

http://www.croatianhistory.net/gif/spindletop1902b.jpg

http://ww2.hdnux.com/photos/17/65/55/4152181/6/628x471.jpg

This is what has to be done now to keep Utopia and the Debt Ponzi going.

http://www.awarmerworld.com/images/tar-in-hand.jpg

https://1.bp.blogspot.com/-CIqhX1l3yHc/Ui9ycqtmXnI/AAAAAAAAIq0/ANN0saSWO...

http://blogs.scientificamerican.com/plugged-in/files/2012/05/dumping.jpe...

http://theenergycollective.com/sites/theenergycollective.com/files/tar%2...

Sat, 05/31/2014 - 03:45 | 4812135 Oliver Jones
Oliver Jones's picture

Why? I'm a peak oiler, and I'm loving it.

75% less consumption by the US means a lot more for the rest of us.

Sat, 05/31/2014 - 07:27 | 4812217 Sudden Debt
Sudden Debt's picture

well, it might have dropped in the US and EU but not in Azia.

And it's normal that it has fallen.
I used to drive a Land Rover 7 years ago and honestly, I though it was normal to have a fuel bill for the car that was about 1000 dollars a month.
Suddenly I crashed tat car and bought a new Alfa and my fuel bill dropped down to 250 dollars a month overnight and that is for a sportscar.
So cars have changed a lot in those years and even now, the new new cars even use half of what mine now uses.
It's just the end of fuell gusling cars. those 20 liter cars per 100 kilometers are history now.

Sat, 05/31/2014 - 09:41 | 4812381 Landrew
Landrew's picture

Your logic is faulty. With cheap energy in short supply, wages fall, cost of production and transport of good goes up. The higher the cost of energy the consumption goes down extending the ever more expensive energy. Peak oil production does not mean the end of oil, it means the end of CHEAP oil. When the 1% are the only ones with funds for energy, the amount of recoverable oil will last what would seem forever.

Sat, 05/31/2014 - 09:45 | 4812386 outamyeffinway
outamyeffinway's picture

Peak oil'ers predicted this.

Sat, 05/31/2014 - 09:54 | 4812397 anti-republocrat
anti-republocrat's picture

Actually, it fits rather well with peak oil.  If there's a glut of gasoline in storage, the "laws" of supply and demand should dictate low gasoline prices, right?  But are they low?  No, they're high and rising, because the costs of producing that gasoline have risen dramatically.  Producers can not affort to lose money on every gallon of gasoline or barrel of crude they produce, nor do they want to see the value of their assets (gasoline and crude stocks) decline, so prices remain high.  Gasoline prices reflect the cost of production, which rises ever higher as producers turn more and more to extracting more expensive non-conventional sources like tar sands.

Of course, "free-market" theory would say that if producers are hoarding a glut in the supply, new producers should come online and undercut the prices.  But we don't live in a "free-market" economy.  We live in an economy dominated by .1%.  They don't want to see a decline in the value of their assets, and the rest of us don't have the capital to start up production.  As the author points out, this also goes way beyond gasoline.

Sat, 05/31/2014 - 13:33 | 4812669 Matt
Matt's picture

"Of course, "free-market" theory would say that if producers are hoarding a glut in the supply, new producers should come online and undercut the prices"

Unless the price is too close to the cost of production. The new producers would have to operate at negative income, after investing hundreds of millions of dollars. No cartel conspiracy theory required.

Fri, 05/30/2014 - 19:01 | 4811265 espirit
espirit's picture

Oh noes, the oil execs are gonna starve.

Maybe they can modify jets to run on gas.

http://www.flightradar24.com/RSD49/3357e12#/60,15/6?&_suid=140149060160702358468214765167

Sat, 05/31/2014 - 01:26 | 4812035 IronForge
IronForge's picture

Almost every city has a Plastic Surgeon, almost every town or village has a Butcher or Farm, and EVERY town in 'Muerica has a Fast Food Franchise.

 Does that Camper look better to you now?  ^_^

Sat, 05/31/2014 - 03:19 | 4812126 Rock On Roger
Rock On Roger's picture

Say it again, Sam.

Tue, 06/03/2014 - 14:46 | 4812036 IronForge
IronForge's picture

Dupe for the BioDiesel Post

Sat, 05/31/2014 - 05:55 | 4812174 DavidC
DavidC's picture

kaiserhoff,
Naughty, but funny!

DavidC

Fri, 05/30/2014 - 22:15 | 4811768 Peter Pan
Peter Pan's picture

"If you gotta channel stuff the cars, it makes sense that you gotta channel stuff the stuff they run on."

How is this for an idea.......fill the cars at the auto dealers with fuel before they are even delivered.

At least the Strategic Petroleum Reserve is being decentralized.

Sat, 05/31/2014 - 03:48 | 4812137 Oliver Jones
Oliver Jones's picture

It's a fine idea, provided you have nothing against the idea of the fuel in all those tanks turning into shoe polish after a few months...

Fri, 05/30/2014 - 19:03 | 4811274 JLee2027
JLee2027's picture

Didn't this just get debunked? It's the refiners being sold off, so the new owners don't report. It's not a drop in consumption...geez. I think people wouldn't notice if the traffic jams just disappeared.

Fri, 05/30/2014 - 20:06 | 4811448 CrashisOptimistic
CrashisOptimistic's picture

Almost.

It's that retail outlets owned by refiners have been getting sold off because the refiners didn't want to tie up capital in downstream, low margin business.  The retail outlets are now independent and They Don't Report.

Jesus Tyler, why don't you just ask your commenters before you post such total bullshit.  This is embarrassing.

Fri, 05/30/2014 - 21:37 | 4811702 ebear
ebear's picture

This is the same trend in Canada.  You still see the company name, but the gas station is on a lease arrangement where the operator, not the major takes most of the risk.   The rest (about half of existing stations) are independent and buy from the majors.

Also worth mentioning, all but one company (Chevron) is out of the truck transport side as well - that's all contracted out these days.  Same goes for bulk transport by barge and ship.  Imperial, for example, had 5 ships working out of Halifax circa 1980.  Now they have none.  Texaco and Shell, same thing.

"This is embarrassing."

Yeah, it sure is.  I'm this >.< close to giving up on this site.

Fri, 05/30/2014 - 21:54 | 4811732 JLee2027
JLee2027's picture

"This is embarrassing."

 

Ditto. Aren't the Tylers paying attention?

Fri, 05/30/2014 - 23:52 | 4811926 Apply Force
Apply Force's picture

Now you you've gone and done it - home visits for all of you!  Perhaps some articles are posted to see who can get what correct despite the BS and propaganda, you know - - just to test the waters and see where DHS should be visiting next.

Some guest articles are surely click bait - others may be fishing in a different sense, maybe ? ?

Sat, 05/31/2014 - 01:51 | 4812062 IronForge
IronForge's picture

Calling Tyler Durden.

Is it time for a few "Petrol Tylers" to join the ZH Staff?

You gentlemen appear to be well suited for the Role of Contributor...


Sat, 05/31/2014 - 08:20 | 4812263 machineh
machineh's picture

BullionBullshit from some hockey-lobotomized canucklehead.

If I wanted to read fictional horseshit like this, I'd buy a supermarket tabloid with 'alien greys' on the cover.

WORST ZH POST EVAH ...

Sat, 05/31/2014 - 18:22 | 4813222 PhilofOz
PhilofOz's picture

"As the One Bank completes its plundering of the U.S. economy, and completes its transformation of the U.S. Middle Class into the Working Poor, it is also simplyusing up more and more of its economic lies."

Whatever ridiculous statements might be made in this article, the reference and the link to "the One Bank" is something I think we should all ponder over. One family owns 40% of the world's wealth yet can manage to stay off the "world's richest" billionaires list as if they do not exist! 

Fri, 05/30/2014 - 20:27 | 4811512 BuddyEffed
BuddyEffed's picture

Disappearing throughput and inputs at the malls, strip malls, and shuttering ups expanding space availables are a big indicator on the real story.

Sat, 05/31/2014 - 05:57 | 4812176 DavidC
DavidC's picture

That may be true (I don't know), but the tenet of the piece is still correct - if CONSUMPTION was the measure we would have a better idea of what's really going on.

DavidC

Fri, 05/30/2014 - 20:18 | 4811487 AGuy
AGuy's picture

The Author is confused. Retail refires are getting out of selling fuel to consumer directly. They are selling off gas stations because the margins are too low. They are just selling refined fuels. the EIA shows consumption is flat:

Scroll to bottom of the page:

http://www.eia.gov/oog/info/twip/twip_gasoline.html

Fri, 05/30/2014 - 21:47 | 4811719 ebear
ebear's picture

"The Author is confused."

Worse.  He's cherry picking to make his case.

Any rational person would have questioned that number just on the evidence of their own eyes.

Feh.


Sat, 05/31/2014 - 08:22 | 4812268 machineh
machineh's picture

Even worser, the lying skank's got something to sell.

Fri, 05/30/2014 - 22:29 | 4811784 seek
seek's picture

This should be appended to the story. I saw this scare number before and researched it, and this is exactly the case -- refineries getting out of the business.

In addition, you'll find that gasoline (not oil, but processed products) imports are higher now too. This data set doesn't show demand falling apart, but the supply chain reconfiguring and it captures only a small part (the part that's going away, and not the replacements.)

Sat, 05/31/2014 - 07:53 | 4812236 schatzi
schatzi's picture

Thankfully there are critical thinkers amongst the posters here which still make it worthwhile to read the comments section. Gems amongst the race to be the first to post some inane one-liner mentioning Obama, GS, 1%ers, soylent green or the first amendment. Something I tell myself often enough, is that to seek the truth you need to look beyond that which only supports your existing opinion. Only through challenging your own viewpoint and being willing to adapt, will you be able to grow intellectually.

Sat, 05/31/2014 - 09:58 | 4812402 Raging Debate
Raging Debate's picture

Schatzi - Well said sir. I have learned much of how the world works here. But I like to read banking publlications and obscure government reports as well. Follow the money if you want to escape serfdom through knowledge.

As alternative media grows I imagine the value could increase with fact checking of articles. A digital publisher could request commentators to do the fact checking and as I see many here attempting to educate I bet a few would bite.

Fri, 05/30/2014 - 20:46 | 4811569 mt paul
mt paul's picture

driving dead....

Fri, 05/30/2014 - 23:29 | 4811869 YellowJacket
YellowJacket's picture

This is the most misleading article I have ever read on zerohedge...The data shown on gasoline sales is refering to sales of branded refiner gasoline (i.e. Shell, BP, Valero).  The branded refiner channel of sale has continued to lose market share over the years to sales from non-refiner branded outlets (think grocery stores, Quicktrip, Joe's gas station, etc...)  The refiners are still selling gasoline, just not through their own branding.  A much more accurate way to view sales would be to look at ALL Gasoline sales by Prime supplier, found here - 

http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=C100000001&f=M

 

It is laughable to think the author truly believes the entire US only consumes 20 million gallons of gasoline a day, or roughly 430,000 bbls/day.  The state of California alone consumes more than that.  I understand his view that the US economy is in trouble, but gasoline consumption in this country has not fallen by 75% from the peak, far from it.  The true peak was seen back in 2005 when Hummer was leading SUV sales.  Since then, fuel economy has improved YoY, and not many people drive 10 mpg Hummers anymore...true consumption decline from the 05 peak is closer 10%, partially due to less driving, but mainly due to less demand as a result of more fuel effecient cars. Any refiner that has shut down in the last 5 years has primarily been in the North East where refiners high input costs of Brent cannot compete with gulf coast production with much lower input costs.  With the expansions of the Colonial Pipeline, the the transport capacity and relatively low costs have made continuing operations uneconomical.

Sat, 05/31/2014 - 16:36 | 4812964 Jumbotron
Jumbotron's picture

Uh oh.....this just hit the news wires.

Peak Cheap Tar Sands.....

http://www.fool.ca/2014/05/30/the-oil-sands-crisis-nobody-is-talking-abo...

 

Fri, 05/30/2014 - 18:37 | 4811182 alfred b.
alfred b.'s picture

 

    no job to drive to!

Fri, 05/30/2014 - 18:48 | 4811216 yogibear
yogibear's picture

People don't need any stinking jobs they can just trade stocks and front-run the fed.
More carbon credits for the US. Consume and defecate debt. Like roaches do with food. Produce nothing.

Yellen and the Fed will keep back-door (Belgium) QEing until the US dollar crashes.

Fri, 05/30/2014 - 18:38 | 4811183 Pairadimes
Pairadimes's picture

What is the octane number of Soylent Green? Will it burn in a diesel?

Fri, 05/30/2014 - 18:40 | 4811194 LetThemEatRand
LetThemEatRand's picture

99.99%

Fri, 05/30/2014 - 18:38 | 4811184 LetThemEatRand
LetThemEatRand's picture

So prices are falling due to lower demand then?

Fri, 05/30/2014 - 19:01 | 4811269 disabledvet
disabledvet's picture

Yeah, no shit. Prices have shot up again and everyone I see now are riding motorcycles.

This article completely ignores the truly massive amount of fuel being exported out of the USA right now as well.

A better start would be the collapse of the European refining business "and take it from there."

We also have had a truly massive increase in the price of natural gas...up well over 100 percent in just a year or so due to it being used to generate electricity.

We haven't hit the 80's yet...and nickel has absolutely soared in price...but any sudden fall in natural gas, oil or gasoline will have an immediate impact on the debt markets in my view.

2 billion for the Kings?! Unbelievable.

Fri, 05/30/2014 - 19:20 | 4811326 cougar_w
cougar_w's picture

Prices cannot fall so they do not.

Fri, 05/30/2014 - 18:38 | 4811188 SheepDog-One
SheepDog-One's picture

But.....it's 'summer driving season' and whatnot.

Fri, 05/30/2014 - 19:18 | 4811316 oddjob
oddjob's picture

'summer driving season' has been changed to 'seasonal interstate TSA gestapo checkpoint tours'.

Fri, 05/30/2014 - 18:39 | 4811189 Seasmoke
Seasmoke's picture

Double the Gas tax. That will balance it out. 

Fri, 05/30/2014 - 18:40 | 4811192 johngaltfla
johngaltfla's picture

So now THEY WANT US to buy 1969 Z28 Camaros and cruise around? Sheesh, make up your mind greenies....

Fri, 05/30/2014 - 18:57 | 4811241 LetThemEatRand
LetThemEatRand's picture

I went to my local GM dealership and told a salesman I'm interested in a Hummer.  Salesman looked around at his unsold inventory, saw his manager was not around, and asked me how much I'd pay him.

Fri, 05/30/2014 - 18:58 | 4811256 FredFlintstone
FredFlintstone's picture

Good one.

Fri, 05/30/2014 - 19:06 | 4811264 TeamDepends
TeamDepends's picture

Would you like the Invisibra upgrade?

Fri, 05/30/2014 - 19:21 | 4811304 LetThemEatRand
LetThemEatRand's picture

Good one.  Had to look it up.  And fitting (metaphorically speaking).  From invisbra.net:  "When it comes right down to it, personal pride and dedication to the job makes all the difference; and at Invisibra, the finished job is what is most important."  Put another way, they swallow.

Fri, 05/30/2014 - 19:14 | 4811307 BlindMonkey
BlindMonkey's picture

Those are cool. My car has one.

Fri, 05/30/2014 - 19:21 | 4811332 cougar_w
cougar_w's picture

You can drive whatever you can afford to feed.

Fri, 05/30/2014 - 18:41 | 4811195 Seasmoke
Seasmoke's picture

Ahhh 1998. Those were the good old days. 98¢ a gallon. 

Fri, 05/30/2014 - 18:48 | 4811218 angryBuddhist
angryBuddhist's picture

Ahhh 1968. Those were the good old days. 28¢ a gallon. :)

Fri, 05/30/2014 - 18:52 | 4811234 Flakmeister
Flakmeister's picture

28 cents a gallon was ~1/100th of an oz of gold...  

Not cheap...

Whereas 1998 was more like 1/250 of an oz...

People have no idea how much the refiners bent the american people over in the "good ol days"...

You get the same conclusion when you compute the price in # of a hours worked at the prevailing min. wage...

Fri, 05/30/2014 - 19:19 | 4811314 robobbob
robobbob's picture

barclay getting called out only proves what GATA and KWN have been saying for a long time, gold and the COG/oz is just another gamed statistic in the central planners toolbox. there was simply no way they could allow an accurate and unadulterated yard stick out there for people to use.

was 1/250 an accurate measurement, or just a measure of the level of effort being exerted at surpressing inflation data, at that particular moment in time?

Fri, 05/30/2014 - 19:39 | 4811385 Flakmeister
Flakmeister's picture

What you fail to understand is that the only real yard stick is BTU...

A pure number such as the Gold-oil ratio or the wheat oil ratio is far better to identify value that the price in some ill defined metric such as the USD....

Fri, 05/30/2014 - 21:35 | 4811698 post turtle saver
post turtle saver's picture

could not agree more

Fri, 05/30/2014 - 20:53 | 4811585 mt paul
mt paul's picture

1974 gas was 40 cents per gal

minimum wage was 2 dollars

or 5 gallons of gas per hour worked....

today minimum wage 7 dollars

or less than 2 gallons per hour worked...

be here now ....

Fri, 05/30/2014 - 20:33 | 4811536 PacOps
PacOps's picture

And a decade before ... in 1958 it was still $0.28 a gallon. What was that price stability all about?

Fri, 05/30/2014 - 21:52 | 4811725 ebear
ebear's picture

How much was a bale of hay?

Fri, 05/30/2014 - 21:53 | 4811728 FredFlintstone
FredFlintstone's picture

How much was a hooker (street level).

Fri, 05/30/2014 - 18:51 | 4811226 yogibear
yogibear's picture

Bernanke started killing the dollar, Yellen and her banksters will finish the job. wouldn't be surprised to see $6/gal gas with higher taxes before long.

Fri, 05/30/2014 - 18:53 | 4811239 Flakmeister
Flakmeister's picture

Yet another easily fooled sheeple....

Fri, 05/30/2014 - 19:39 | 4811361 cougar_w
cougar_w's picture

You will never see $6/gal. because at that price the entire planet goes bankrupt.

Which is too bad, because unless it gets to $6/gal a lot of these tight oil plays go bankrupt for lack of capital.

Stuck between Scylla and Charybdis. Not good.

Fri, 05/30/2014 - 20:24 | 4811501 Jumbotron
Jumbotron's picture

Absolutely correct.  $6.00 is an impossibility.  Nobody's pocketbook can sustain the commutes that must be taken just to go to work to make a wage that is stagnant or falling with energy prices zooming to $6.00 / gal.

Fri, 05/30/2014 - 20:39 | 4811556 Flakmeister
Flakmeister's picture

Explain Europe....

Fri, 05/30/2014 - 21:02 | 4811614 Jumbotron
Jumbotron's picture

Flak...I usually, if not always upvote you....so I won't downvote you on that comment.

Here's the difference.  They have GREAT mass transit systems.  Each individual European country is TINY compared to the United States...therefore...when one does drive it's on average not nearly as far as the typical commute for Americans who are (un)happily motoring around to EVERYTHING including going to get their slave wage every day.  The cities are more compact therefore the cars needed are on average smaller and more fuel efficient.

Plus...with cradle to grave healthcare in most places and other social services....Europeans have more left over to spend on gas....if they want or have to....than us.  Not saying that socialized healthcare is the answer to our pain in the pocketbook when it comes to fuel prices.  But it does make a difference.  Probably doesn't make up for the loss of freedom.....but one man's freedom is another's $250,000 healthcare bill.

Fri, 05/30/2014 - 23:44 | 4811915 Matt
Matt's picture

Americans choose to live in suburbs and drive to work. People over time, each persons individual choices adding together incrementally to bring about the current situation.

I don't think it is the socialized healthcare over there, I think it is America's corporate welfare over here that causes things to cost much more. Some of it is due to the corporations lobbying, and some is just politicians meddling. 

Sat, 05/31/2014 - 04:41 | 4812153 Incubus
Incubus's picture

THere is no OPTION.

 

Us Americans are going to have to accept the fact that in a global world, cheap gas is not a possibility.  The suburban dream that was spawned on cheap fuel is not sustainable.

 

Urbanization is in the future.  

Sat, 05/31/2014 - 09:40 | 4812380 Chief Kessler
Chief Kessler's picture

Holy shit. The biggest piece of BS article has spawned some of the most eye opening replies I've seen at ZH, 'mungst 'Muricans, and others. People actually recognizing peak oil! actually saying Hummers are not a good ride to own. Truly amazing, is the tide turning? Do people actually realize gluttony of energy is not necessary? What's next on ZH? The sacred cow of 24/7 central air and heat?

Sat, 05/31/2014 - 09:58 | 4812401 Citxmech
Citxmech's picture

Is that you Mr. Kunstler?

Sat, 05/31/2014 - 00:39 | 4812001 Flakmeister
Flakmeister's picture

Thanks for the effort...

Yeah, a great mass transit enables it...

The single payer HC systems not so much so...

At least their gas taxes cover the cost of the roads unlike the subsidized ones in the US...

Fri, 05/30/2014 - 21:08 | 4811629 Oldwood
Oldwood's picture

Inbreeding?

Fri, 05/30/2014 - 21:04 | 4811618 gilligan
gilligan's picture

We pay approx. $6/gal. here in Australia and have done so for some time. It's a non-event here. Never hear petrol prices being discussed. Of course, average wages are a lot higher here, so I get that these prices have a more significant impact in the US.

Anecdotal observation: i've never seen more new Mercs and BMWs on our city's roads. Odd given our economies underlying weaknesses.

Fri, 05/30/2014 - 21:09 | 4811635 Oldwood
Oldwood's picture

Got credit?

Fri, 05/30/2014 - 21:55 | 4811733 ebear
ebear's picture

"$6.00 is an impossibility."

That's when the 100 mpg carbuerators the oil co's have been sitting on will come out, no?

At least thats what someone told me;)

Fri, 05/30/2014 - 22:52 | 4811829 skepsis101
skepsis101's picture

Just FYI.  I saw $5.99 for premium (albeit with service, as in 'Service Station') in downtown Los Angeles just 6 weeks ago!  Guess we're getting mighty close to your collapse number.  

Fri, 05/30/2014 - 18:42 | 4811199 Mentaliusanything
Mentaliusanything's picture

You can afford a Car? How middle class is that ;)

Fri, 05/30/2014 - 18:43 | 4811202 docmac324
docmac324's picture

Well, it Sure ain't the Chevy Volt.  It catches fire without gas!

Fri, 05/30/2014 - 20:35 | 4811540 Jumbotron
Jumbotron's picture

I can start fires with mine after chili with beans.....LOL !!

Fri, 05/30/2014 - 18:44 | 4811204 SheepDog-One
SheepDog-One's picture

OH BTW, I just bought oil and a filter today so I can change it over the weekend, guess how much 5 quarts and a filter cost? $45

Fri, 05/30/2014 - 18:46 | 4811211 Seasmoke
Seasmoke's picture

Should just go to Jiffy Lube. 

Fri, 05/30/2014 - 18:49 | 4811223 TeamDepends
TeamDepends's picture

aka "The Affordable Care Act".

Sat, 05/31/2014 - 09:23 | 4812349 SheepDog-One
SheepDog-One's picture

Yea well I don't drive a POS though.

Sat, 05/31/2014 - 16:11 | 4812902 malek
malek's picture

But please don't tell us you change the oil every 4000 miles.

Fri, 05/30/2014 - 18:48 | 4811220 greatbeard
greatbeard's picture

>> guess how much

Oil change in the diesel truck is 3 gallons.  I make it a point to drive as little as possible.

Do NOT follow this link or you will be banned from the site!