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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runthenumbers's picture

Clearly this means that the experiment of offshoring manufacturing in favor of a service economy is a success.  You jsut don't need the energy when you don't make anything.  On the other hand it doesn't take a whole lot of enerygy to make a very profitable MBS, CDO, CDO^2, you know.  Bravo America you are a resounding success.

Archduke's picture

yes, there's more to energy return than the raw thermodynamic joules.

there's energetic order.  fuel powers the grid which power computers,

networks, and trading systems which produce much more than the

raw btus would imply.



WhiteNight123129's picture

funny reverse logic comment, quite witty. Reversing case and effect and de-dollarization of oil.


bonderøven-farm ass's picture

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

Great question.

I'd also like to ask how in the Hell the DOW continue to rise with BDI plummeting, record low market volume, global currency devaluation, does this market keep itself in the green with everything that's happening right now?

What the fuck am I missing....? 

Bobbyrib's picture

When you close refineries for "maintenance", the price of gasoline increases. This has been going on since 2008. The oil companies refuse to allow the price to go down too much.

Bringin It's picture

RedPill If energy consumption is tanking

Good question.  Asian consumption is growing remarkably fast.  What's that bit about humans and exponential function comprehension ability?

kridkrid's picture

You know some day this war's going to end.'s picture

"Someday this war's gonna end...

That would be just fine with the boys on the boat. They weren't looking for anything more than a way home.

Trouble is, I've been back there, and I knew that it just didn't exist anymore."

- Captain Willard

kridkrid's picture

Such a great movie, on so many levels.  The scene that made Redux- the French plantation- was fantastic commentary as well.'s picture

Agreed! Even better if you read "Heart of Darkness" prior to (or even after) seeing the movie.  History, in spite of our intentions, repeats itself... over and over and over. 

When "Redux" came out in the theaters, my friend and I were the only ones in the theater the night we went to see it.  A telling sign about the dumbing down of American culture, IMHO.

Randall Cabot's picture

Heating oil/natural gas usage has got to be way down because of the absence of winter this year.

Spastica Rex's picture

Proving global warming is real.

Fair, right? I mean when we have a cold winter somwhere it's alway accompanied with gleeful shrieks of "SEE! SEE!"

A pox on both your houses.

donsluck's picture

Update your phrasing, it's global climate change, not necessarily warming everywhere.

bigerny's picture

*sigh*And in the mid '70s it was global cooling.All with the same dire predictions of death and disaster.Some of the same predictors of cooling death are in the warming death camp today.

Esso's picture

I remember that "coming ice age" stuff when I was a schoolboy.

But we do have "Global Climate Change." They're called "seasons," I think.

Matt's picture

Update your phrasing, it's global climate change, not necessarily warming everywhere.

Global Warming means warming, on a global scale. That means that the average temperature over the area of the entire planet, is increasing.

Regional climates may be warmer or cooler, or warmer in winter and cooler in summer, wetter, dryer, or simply have heavier rains and longer dry periods. All that matters is whether the average temperature over the surface of the entire planet as a whole is changing or not.

If you have an audited source of data showing that the average temperature globally is not increasing, please provide it.

Whether or not this warming is caused by humans at all, or if so, to what degree, is a seperate issue.

Cathartes Aura's picture

if you really want to "update your phrasing" - take into consideration the global aerosoling of skies, and the stated objective to "own the weather" - oh, and the Rothschild purchase of weather central

connect the snowflakes?

here's an interesting interview with Lord Rothschild re: his interest in China, including their "weather":

Vince Clortho's picture

Best indicator for Global warming is to measure the arctic ice cap, followed by the large northern latitude glacial ice fields over a period of decades.  There has been a global warming going on for well over 100 years.

Larry Darrell's picture

You could reverse global warming by increasing the hole in the ozone.


Not saying that it's a good idea to do so, but you can decrease the global temperature a few degrees if you destroy the atmosphere which makes life here possible.


tired1's picture

I've been doing my small part, I burn every piece of plastic I can.

"Paper or plastic?"

- "Plastic, please. It burns much better."

Oh the looks I get at the check-out counter.

Matt's picture

I don't follow, how do you propose that allowing more radiation from the sun to reach the planet's surface, would make the planet cooler?

Diogenes's picture

"There has been a global warming going on for well over 100 years."

You mean 10,000 years, since the end of the last Ice Age.


Jumbotron's picture

There has been a global warming going on for well over 100 years.

Off by 10 my friend.....since the last ice age.....10,000 years ago.

_ConanTheLibertarian_'s picture

Sure there is global warming but there have been much more severe warm (and cold) periods in the past. This is perfectly normal.

And then it's supposed to be *man-made* also? BULLSHIT! The human arrogance is pathetic. Look at what a volcano can do. Now were talking and still nothing severe happens.

The elite is trying to indoctrinate the sheeple so they can tax them. That's the real reason. They have already been exposed. HELLO?! WAKE THE FUCK UP!



ONO47's picture

You should check out eastern europe. Record cold and snow fall.

Randall Cabot's picture

The article is clearly about the US-look at the charts.

Hedgetard55's picture

Caused by "climate change", no doubt!

BW's picture

There is no business volume because of devaluation (inflation).  Once prices drop volume and business will increase in the real (physical) economy.  The virtual economy not so good.

Gully Foyle's picture

Jevons paradox

In economics, the Jevons paradox (sometimes Jevons effect) is the proposition that technological progress that increases the efficiency with which a resource is used, tends to increase (rather than decrease) the rate of consumption of that resource.[1] In 1865, the English economist William Stanley Jevons observed that technological improvements that increased the efficiency of coal-use led to the increased consumption of coal in a wide range of industries. He argued that, contrary to common intuition, technological improvements could not be relied upon to reduce fuel consumption.[2]

The issue has more recently been reexamined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency lowers the relative cost of using a resource, which increases the quantity demanded of the resource, potentially counteracting any savings from increased efficiency. Additionally, increased efficiency accelerates economic growth, further increasing the demand for resources. The Jevons paradox occurs when the effect from increased demand predominates, causing an increase in overall resource use.

The Jevons paradox has been used to argue that energy conservation is futile, as increased efficiency may actually increase fuel use. Nevertheless, increased efficiency can improve material living standards. Further, fuel use declines if increased efficiency is coupled with a green tax that keeps the cost of use the same (or higher).[3] As the Jevons paradox applies only to technological improvements that increase fuel efficiency, policies that impose conservation standards and increase costs do not display the Jevons paradox.

trav7777's picture

c'mon man, you're pissing on parades here....IONIC LIQUIDS!!!!!11 are going to save us all, ok?  Just 'cuz

tmosley's picture

Yeah, stupid ionic liquids increasing EROEI!

trav7777's picture

you have obviously done the science to support that assertion, right?

Oh wait, forgot who I was talking to...OF COURSE YOU HAVEN'T.  It's another bold assertion from straight outta your ass

tmosley's picture

How many times do I have to post this?

The bitumen comes off with not much more than a little agitation.

"But that's just one lab group." was your last reply.  It is such a stupid assertion, I don't even know how to address it.  Tar sand in, oil and clean sand out.  Reduces or eliminates the need to add heat, which is a major cost associated with production in oil sand fields now.

But hey, there is no such thing as technological advance.  Who you gonna beleive?  Trav or your lying eyes?

trav7777's picture

I'll add "EROI" analysis to the littany of things about which you are totally incompetent.

Do you REALLY BELIEVE that "a little agitation" is the SUM of all EROI that goes into this process?  Of course you do, because you're an idiot.

Your original statement about EROI is unsupported by any science you have cited.  That is a fact.  You pulled it straight out of your ass.

You ASSUME based upon a tiny edge-case anecdote that it should be lower EROI...and hell, it MIGHT BE.  But you have established no persuasive evidence to support this assertion.

I know the notion of even having a cogent argument, much less compelling evidence, is alien to you.  Why?  It's because you're stupid.

NEVER MIND the issues of scaling this process and whether or not it is reproduced elsewhere or any of the technical issues inherent in it.  This is why smart people call you an idiot, cliff.

tmosley's picture

Right, so reducing the amount of energy it takes to process the oil sands into usable materials has no impact on the amount of energy it takes to process the oil sands into usable materials.

That is EXACTLY what you are saying.  Own that shit, or change your fucking tune, douchebag.

Also, good job on YOUR ASSUMPTION that it hasn't been reproduced anywhere, which is among the dumbest fucking crocks of shit you have laid out on this forum and called them caviar.

It's not like it takes a bunch of work here, doofus.


trav7777's picture

did on any of those links, Mr. Argumentum ad Googlum?

You might want to do perhaps a smidgeon of DD before you post 50,000 links to the same paper from Penn State, along with a bunch of links totally irrelevant to tarsands.  Did you really think you could get away with typing "ionic liquids" into google and pass that bullshit off as a rebuttal?  HAHAHAHAHAHAHA.

But, way to open with ANOTHER strawman,'re like batting 1.000 on that shit.

I never at any point made the claim that you attribute to me, which was a fucking tautology.

I said merely that you have marshalled NO EVIDENCE as to YOUR claim of reduced EROI NOR the technical feasibility of adopting this lab process to the real world.

These statements stand.  They will remain true no matter how many strawmen you throw up, how many times you lie, weasel, and dissemble, and how many times you post google searches as "evidence" of something.

Are you sure you're not Hal from RMA?  Because GFD you remind me of that idiot.

tmosley's picture

Uh-huh.  Nevermind that this is one of thousadns of technologies, used PURELY as an example of technological advance.

You really need so many words to say that you hate me?  You really are a soulless, witless bastard, aren't you?

trav7777's picture

hate you?  Dude, I couldn't give a shit if you live or die; you mean absolutely nothing to me

However, your concession on this point too is noted

tmosley's picture

What concession?  It is a REAL technology.  One which you deny exists.  So fucking what if it is in its infancy?  I never said it wasn't!

And yes, you do hate me, personally.  Your tone changes when you reply to me.  You become more aggressive.  You CAPITALIZE more WORDS.  You call me names more than you do others.  

Not that it matters.  I stopped reacting to your BS a long time ago when I realized how pathetic and alone you are.  If you would stop with the lies and the death worship, I would let you be.  But you won't, because you have a personality disorder.  So I will keep fighting your lies until you cross the line and get yourself banned.

So watch that line, bitch.

GoinFawr's picture

you and Trav sure bring out the best and the worst of each other; can't you two just get this over with by hooking up after dinner and a movie?

Great link btw.


GoinFawr's picture

shouldn't some moonbeam absolutist be tatooing 'collectivist statist' on your forehead right about now?

tmosley's picture

Note that this paradox was found in an era of increasing population, not one of stead/decreasing population such as the one we are preparing to enter.  A levelling off in population caused by economic SUCCESS.  Imagine that.

Mr Lennon Hendrix's picture

The population trend follows available energy?  Amazing....

trav7777's picture

no shit, it's almost so simple a caveman could understand it.  Which is why mosely-claven consistently falls short

tmosley's picture

Right, so birthrates HAVEN'T declined in all western societies, and aren't negative in many.

You LOVE throwing out evidence that goes against your thesis.  As suspected, you are a death worshiping zealot.  Too bad.  I thought you might have some sense buried somewhere deep between your ears.

trav7777's picture

wake me up when population rates go negative...moron

And the idiocy of you to claim that lowered birthrate (when population still increases) is salvation when ENERGY CONSUMPTION PER CAPITA is what matters and it went BALLISTIC.

The people in western countries with no kids consume more oil than entire GENERATIONS of the non-western societies.

It's because the west is filled with morons like YOU

dugorama's picture

WELL, wake up then.  Germany and Japan now have neg population growth rates.  All of Western Europe has negative (below replacement) birth rates.  For that matter, so does the native born US population.

tmosley's picture

Wakey wakey, dumbass.

People consume more because of artificially low interest rates.  Ever think of that, doofus?

trav7777's picture

HOLY SHITZEZ batman!!!!  .02 % decline rates since 2009!!!!!!!  WTFZEZ

Did you, um...look at the MAP on your link?  No, of course not.  Do you even fuckin READ this shit you cite or do you enjoy giving other people the ammo to make you fall on your face yet again?

People consume more because of interest rates?!?!?!  WTF...idiot....have you ever bothered to research consumption per capita versus time?  In the days BEFORE ZIRP?