Guest Post: It's Not Just Gasoline Consumption That's Tanking, It's All Energy

Tyler Durden's picture

Submitted by Charles Hugh Smith from Of Two Minds

It's Not Just Gasoline Consumption That's Tanking, It's All Energy

It's not just gasoline consumption that's declining--petroleum and electricity consumption are also dropping. Is that indicative of economic growth?

A number of readers kindly forwarded additional data sources to me as followup on last week's entry describing sharply lower deliveries of gasoline. (Why Is Gasoline Consumption Tanking? February 10, 2012)

The basic thesis here is that petroleum consumption is a key proxy of economic activity. In periods of economic expansion, energy consumption rises. In periods of contraction, consumption levels off or declines.

This common sense correlation calls into question the Status Quo's insistence that the U.S. economy has decoupled from the global ecoomy and is still growing. This growth will create more jobs, the story goes, and expand corporate profits which will power the stock market ever higher.

Courtesy of correspondents Bob C. and Mark W., here are links and charts of petroleum consumption, imports/exports, and electricity consumption. Let's start with a chart of total petroleum products, which includes all products derived from petroleum (distillates, fuels, etc.) provided by Bob C. The chart shows the U.S. consumed about 21 million barrels a day (MBD) at the recent peak of economic activity 2005-07; from that peak, "product supplied" has fallen to 18 MBD. The current decline is very steep and has not bottomed.

This recent drop mirrors the decline registered in 2009 as the wheels fell off the global debt-based bubble. Those arguing that the U.S. economy is growing smartly and sustainably have to explain why petroleum consumption looks like 2009 when the economy tipped into a sharp contraction.


A link of interest from Mark W.: Montly U.S. Product Supplied of Finished Motor Gasoline (Thousand Barrels per Day) showing gasoline "product supplied" from 1945 to 2011. This shows gasoline has declined about 700,000 barrels per day from 2007, from 9.2 MBD to 8.5 MBD in November 2011. This represents about a 13% decline.

A number of readers wondered if gasoline imports might account for lower domestic shipments. That is a good question, and Bob C. found the answer in other EIA (U.S. Energy Information Agency) charts.

Weekly U.S. Imports of Total Gasoline (Thousand Barrels per Day)

Weekly Imports & Exports of Petroleum and Other Liquids (Thousand Barrels per Day)

Exports of Petroleum and Other Liquids

Here we see that of 8.5 million barrels a day of gasoline supplied, roughly 500,000 barrels are imported. In other words, the percentage of imported gasoline is modest.



The U.S. imports and exports petroleum products, but the net result is imports of around 8 million barrels a day. The U.S. imports about 10.5 MBD and exports almost 3 MBD for a net import total of 7.5 MBD. The secular decline in net imports from the 2006 top is consistent with the view that consumption has declined as a reflection of economic activity.

Mark W.also forwarded these charts of Electrical power consumption. Not only has electrical consumption never recovered the levels of mid-2008, it peaked in mid-2011 and has begun a sharp decline in late 2011.



I marked recent recessions on a long-term chart of electrical consumption to show that the deep recession of 1981-83 barely registered, while the recessions of 1990-91 and 2000-2002 are essentially noise.



That makes the secular decline from 2006 peaks all the more striking. (It is perhaps no coincidence that the housing bubble peaked in 2006-07 along with the extraction of home equity craze.)

Clearly, electrical consumption is in a downtrend with no recent historical precedent. Those claiming that U.S. growth is sustainable and the Dow is heading for 15,000 must square their rosy projections with sharply declining energy consumption. The two simply don't match up.

As a lagniappe, here is a link from correspondent Joel M. on downward revisions to shale oil estimates. This injects a note of realism in the recent euphoric depiction of the U.S. as having essentially boundless supplies of petroleum equivalents. Substantial, yes, virtually unlimited, no.

Shale gas estimates continue downward: Energy Bulletin.


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redpill's picture

Smells like defeat


If energy consumption is tanking why are gas prices so damn high?

Conman's picture

Why is the sky blue?

Why are diamonds so expensive?

Who does a ipad cost 500 when the parts only cost 300?


brewing's picture

why does radio shack ask for your phone number when you buy batteries...

dwdollar's picture

I have no doubt the DOW is going to 15,000. My concern is whether it will be relevant as the government will be the biggest holder of everything.

Spigot's picture

Quote: "This common sense correlation calls into question the Status Quo's insistence that the U.S. economy has decoupled from the global ecoomy and is still growing. This growth will create more jobs, the story goes, and expand corporate profits which will power the stock market ever higher."

OK, here's the paint on the pig. Corporate profits ARE INDEED expanding ... because they firing a huge # of people, and are selling off chunks of their own flesh (think Bain Capital), getting massive infusions of Federal cash, etc.

The COVER STORY SPIN that the MSM and the .GOV are running here (the above story line) is to cover the bare asses of the .CORP elites who ARE making money hand over fist across the dead and dying corpses of Main St peeps.

Think about it: If everyone is suffering while the 0.01% are eating their guts and calling it "wealth" then there would be a tad increase in over all resentment by to 99.99%.

So, a cover story has been adopted. To wit "!!RECOVERY IS ABROAD IN THE LAND!!" and that's what we have been force fed for the past 3 years. Obviously.NOT!

Archon7's picture

With the kind of inflation the Fed's cooking these days, I wouldn't be surprised to see the Dow hit 50,000

Long-John-Silver's picture

Batteries are required for remotely controlled explosive devices. Always remember that you can be arrested and detained if you have ANY bomb making materials in your home like batteries, plumbing pipe, and electrical wire. 

RafterManFMJ's picture



As I'm not Amish, my house is full of electrical wire as well as plumbing pipes.

Janice's picture

Yes, energy consumption is down. I am freezing my butt off because we can't afford a $500-$600 electric bill.

Just Observing's picture

Pre-pay your electric bill by putting in solar.  My bill this month was minus 14 bucks.

Silver Dreamer's picture

In all seriousness, consider a kerosene heater.  It will run you about $130 to buy one.  Check Tractor Supply.  Then you can run it only when you need it, and you'll save a ton of money in the end compared to the house's electrical heating system.  If the grid goes down too, you'll have an alternative heat source.  Kerosene is more clandestine compared to a fireplace or wood stove as well.  The scent is far more difficult to detect, and it does not produce a plume of smoke.

engineertheeconomy's picture

carbon monoxide is not exactly the same as breathing oxygen

Silver Dreamer's picture

And your point is what exactly? Very few homes are sealed well enough for it to be a problem.  My father used one when I was a child, and I use one today.  It's not a problem unless you live in a bubble.

RafterManFMJ's picture



Pretty sure we all are living in a bubble. Treasury, Student loan, faith in .gov...more bubbles than Don Ho could count.

Esso's picture

Janice, you might want to consider a NatGas or propane vent-free fireplace, heater or log set. They're 99.9% efficient and don't require electric power to operate.

I'm a contractor and have installed six of them now, including a vent-free fireplace in my house, a blue flame heater in the basement and a portable propane heater in the shop.

My NatGas bill to heat the house and cook now runs less than $30/month in NE Indiana in the winter.

trav7777's picture vent NG ftw

Silver Dreamer's picture

Do you have a natural gas tank, or is it utility provided?  I'd consider NG if I were able to install a tank.  From what I understand, most residential folks cannot afford the cost and it simply isn't done?  You'd be the expert on it, and I'd love to know what you think.

EndTheMedia's picture

Having a beard is suspect so even the Amish are suspected terrorist.

GeezerGeek's picture

And they're often seen growing their own food!

sun tzu's picture

Amish are a national security threat. Just ask the USDA and DOJ.

Archon7's picture

Well, if you're Amish, you're safe from the DHS, but not the FDA:

You'd be one of those fresh-milk-selling domestic terrorists...

Silver Dreamer's picture

I fly a Gadsden (see my icon), have months worth of food and water stored, and am heavily armed.  From a past injury, I happen to be missing part of a finger too.  They can come get me any time they want, for I apparently fulfill many of the requirements to be a terrorist without even adding "bomb making materials" to the list.  Oh, and to the government agent now reading this comment: fuck you!

zerotohero's picture

Livin' in a paranoid state o' mind? How fun is that?

Silver Dreamer's picture

Paranoid? Please explain.  I do not depend on the grocery store to feed my children, so that makes me paranoid?  Have you ever heard of the Boy Scouts?  What's their motto again?  I suppose they are all paranoid too, ehh?  Is our government paranoid as well?  Wake the hell up.

aerojet's picture

I say do as you please, but reading that does make you come off sounding more than a little paranoid--maybe it's the Gadsen thing.  The problem with all those kinds of symbols is that they have been hijacked by fringe elements to promote an agenda of hate.  So as soon as you display a Gadsen or whatever, you are making an association with fringe, far-right elements of society, e.g. the paranoid fringe. 


Also, all the bluster about being "heavily armed."  Yeah, it's the US.  Nobody cares that you're some kind of badass.

Silver Dreamer's picture

You do not know what the hell the Gadsden even stands for let alone how to spell the word.

Toolshed's picture take a deep breath. Feel better now? Good........but no one cares.

GeezerGeek's picture

Some of us do care. If nothing else, American citizens should understand American history and be familiar with the concepts underlying the Gadsden flag. It is a tragedy that far too many do not care. Most of them are too young or too oblivious to understand how much our liberty has decreased over the decades.

Imagine the reaction to the text on another flag popular prior to the revolution: "Appeal to Heaven".

fxrxexexdxoxmx's picture

You need to worry about the far left much more so than the far right. The left will kill your children and then tell you it was the best thing for everuyone. The left will spend eight years screaming that you support hate and war and then when their guy is in charge tell you it is peace.

The left produces leaders who say " 6% uemployment is a disgrace", yet when their guy has over 8% the economy is the bestest ever.

The left writes laws and then demands the laws passage before you can read it.

The left what a bunch of national socialists.

wee-weed up's picture



"The left will spend eight years screaming that you support hate and war and then when their guy is in charge tell you it is peace."


Great quote!

TheFourthStooge-ing's picture

fxrxexexdxoxmx said:

You need to worry about the far left much more so than the far right. The left will...[blah blah blah]

-1 for still viewing the world through left/right liberal/conservative democrat/republican blinders.


Archon7's picture

The left has the disturbing Orwellian ability not only to say with utmost sincerity that black is white, up is down, good is bad, truth is a lie, etc, but also to firmly believe it in the core of their being, and are unable to imagine it ever being another way...  that is, until their Dear Leader calls on them to believe in there being another way...

Cathartes Aura's picture

obviously "the left" side of your reality offends thee - best cut it out/off before the "right" side notices. . .

zerotohero's picture

zzzzzzzzzzzz - I prefer to dream of better times not live in a bunker state of mind.

NidStyles's picture

In other words you prefer to live in a delusional state and pretend that the real world doesn't exist around you.

zerotohero's picture

We all live in the real world - how you choose to live in it is a personal choice - dream for better times ahead or lock and load mentality - whatever turns your crank.

sun tzu's picture

Maybe the people in concentration camps should have just dreamed of a better world while they starved to death

Silver Dreamer's picture

You are like most, and you accept ignorance to remain blissful.  It's your choice.  The ignorance works as long as the system does, so why question it, right?  I do not have a bunker by the way, but the government has thousands of them--many newly built.  Boy Scouts make a lifestyle out of being prepared too, but those boys must all be crazy however.

zerotohero's picture

PLEASE do not get me started on the Boy Snouts organization where grown men go to play.

wee-weed up's picture

Sandusky for Scoutmaster!

Cathartes Aura's picture

actually Toolshed, "gay men" are verboten in the Boy Scouts - hence the hidden abuse, rather like religious priests - but hey, what's a little abuse among men?

sun tzu's picture

So if they allowed gay men into the Scout there would be no abuse? It must be all the hetero scout leaders and priests who are molesting BOYS. Makes perfect sense in the politically correct world

Cathartes Aura's picture

makes more sense in the repressed sexuality of phallic worshipping cultures forced to use females as their go-betweens.

and I'm sure you'll find most males molesting young boys pass as hetero in their culture.

Stuck on Zero's picture

Being paranoid doesn't make him cranky.  His hemorroids are making him cranky.

TheFourthStooge-ing's picture

zerotohero asked:

Livin' in a paranoid state o' mind? How fun is that?

Ask Janet Napolitano.


GeezerGeek's picture

See Something: I saw a picture of her.

Say Something: Does the sound of gagging count as saying something?

This is not a comment about her appearance, but what she represents.

engineertheeconomy's picture

Her creepy appearance speaks volumes about the lack of integrity of HLS, NSA, FEMA, etc.

sun tzu's picture

Maybe he's taking after the Department of Homeland Security under Mr Napolitano. See something, say something and let someone stick their hands down your pants to make sure there's no bomb in your underwear