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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 - 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... 

Fri, 05/30/2014 - 22:09 | 4811757 Calmyourself
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.

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