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Guest Post: Why Is Gasoline Consumption Tanking?
Submitted by Charles Hugh Smith from Of Two Minds
Why Is Gasoline Consumption Tanking?
Gasoline deliveries reflect recession and growth. The recent drop in retail gasoline deliveries is signalling a sharp contraction ahead.
Mish recently posted some intriguing charts depicting a significant decline in gasoline consumption. Then correspondent Joe R. forwarded me this stunning chart of gasoline retail deliveries, from the U.S. Energy Information Administration: (EIA)
As Joe noted, this data is interesting because it is un-manipulated, that is, it is not "seasonally adjusted" or run through some black-box modifications like so much other government data.
Retail gasoline deliveries, already well below 1980 levels, have absolutely fallen off a cliff. Is the plunge inventory-related, i.e. are storage facilities so full that retailers are simply putting off deliveries?
Though I don't have data on hand to support this, I know from one of my correspondents who is in the gasoline distribution/delivery business that gasoline is very much a "just in time" commodity: gas stations are often close to running out of fuel when they get a delivery. Stations aren't holding huge quantities of surplus gasoline; that's not how the business works.
Given the absence of "extra storage" in gas stations (and the fact that the number of gas stations has fallen dramatically since 1980), it is reasonable to conclude that retail delivery is largely a function of demand, i.e. gasoline consumption.
Even if you dismiss the recent plunge as an outlier, the declines in retail gasoline deliveries are mind-boggling. If you look at the data from 1983 to 2011 on the link above, you will note that delivery declines align with recessions.
For example, deliveries jumped from 50.1 million gallons per day (MGD) in November 1983, when the nation was emerging from the deepest postwar recession then on record, to 58 MGD the following November (1984).
Deliveries steadily rose to a peak of 67.1 MGD in July 1998, declined marginally in the 2001-2 recession and then surged to 66.8 MGD in August 2003. If we just look at one month--say November--then we see that deliveries remained in a remarkably consistent channel from 1994 to 2008, between 54 MGD and 63 MGD, with the higher numbers occuring in the "peak bubble years" of 1998 and 2003.
In 2010, gasoline deliveries declined to the low 40s--literally falling off the charts. In November 1983, deliveries were 51.1 MGD; in November 2010, they were 42.8 MGD, and in November 2011 they were 30.9 MGD.
Does this reflect higher fuel efficiencies in the U.S. vehicle fleet? To examine fuel efficiency and other macro-trends, I assembled some charts of fuel efficiency (courtesy of the Early Warning blog) and a graph of employment, a commonly used proxy for economic activity/growth.
Let's start with some basic data about population and vehicles. There are 254 million passenger vehicles registered in the U.S. Some percentage of these are classic cars and other vehicles that aren't driven much, but nonetheless the number of vehicles that are in regular use is large.
U.S. population in 1983 was approximately 234 million. The U.S. Census Bureau estimates the current population at 313 million.
Vehicle sales declined from a record 17.4 million in 2000 to 11.5 million in 2010.
People are driving less: The Road... Less Traveled: An Analysis of Vehicle Miles Traveled Trends in the U.S.. (2008)
Driving, as measured by national Vehicle Miles Traveled (VMT), began to plateau as far back as 2004 and dropped in 2007 for the first time since 1980. Per capita driving followed a similar pattern, with flat-lining growth after 2000 and falling rates since 2005. These recent declines in driving predated the steady hikes in gas prices during 2007 and 2008. Moreover, the recent drops in VMT (90 billion miles) and VMT per capita (388 miles) are the largest annualized drops since World War II.
Here are two charts of U.S. employment which show two periods of strong expansion: in the late 1990s and in 2002-08.
If the number of jobs were correlated to gasoline deliveries, then we would expect deliveries to be close to those registered in 2003 and 1999, since the number of jobs has declined to the levels of those years.
Instead, we find deliveries are dramatically lower:
November 1999: 59 MGD
November 2003: 63.8 MGD
November 2010: 42.8 MGD
Once again, this is not an outlier: deliveries for all of 2010 were between 42 and 46 MGD, compared to deliveries in the high 50s/mid 60s in 1999 and 2003.
There are all kinds of other things that influence the number of miles driven, but there is little evidence that any one factor can account for a 47% drop in retail gasoline deliveries. For example, it is well-known that the U.S. economy has shifted to a digital, service economy in the past 30 years, and since more people can "consume" (via shopping at amazon.com, etc.) and "produce" (work from home) without driving, then it makes sense that people are driving less.
But if we examine the data, it's difficult to attribute the massive recent drops to people ordering stuff online or working from home more. After all, people were working from home and ordering stuff online in 2003, when gas deliveries reached 63 MGD, and in November 2006, when deliveries were 58.8 MGD.
Deliveries in November 2011 were 30.9 MGD, a staggering 47% decline.
What about fuel efficiency? here are two charts from the Early Warning blog. They show a significant increase in the 1980s, but only modest improvement through the 1990s and 2000s.
If we use the same year as in the employment analysis, 1999, we see there was a 6% rise in efficiency from 1999 to 2010. This would suggest 6% of the decline in gasoline deliveries can be attributed to increased efficiency. But what about the other 40% of the decline? That cannot be attributed to higher efficiency.
I've marked up the first chart to show the secular trends in efficiency and employment.
There are no data-supported broad-based drivers for dramatically lower gasoline consumption other than austerity and lower economic activity. The code-word for "austerity and lower economic activity" that is verboten in the Mainstream Media is "recession." Indeed, if you examine the EIA data, the only causal factor that has backing in the data is recession--or if you prefer, austerity and lower economic activity.
Then there is the price of fuel. People have to go to work, pick up the kids, get their meds, etc., and few urban centers in the U.S. have mass transit systems that are up to the task of replacing autos. So most Americans have what we might call non-discretionary driving. But as the price of fuel rises, people find ways to lower their discretionary driving by combining trips, shopping less often, shortening or eliminating vacations, etc. Enterprises reduce costly business travel with teleconferences and other digital technologies.
Data supports the notion that high oil prices lead to recession. For example, Chris Martenson recently made a compelling case for this in Why Our Currency Will Fail ("Note that all of the six prior recessions were preceded by a spike in oil prices.")
Household income doesn't rise just because oil is climbing in cost, and so the extra money spent on fuel is diverted from other consumption or saving (capital accumulation). Higher fuel costs lower household capital formation and reduce consumption/economic activity.
Oil has been elevated for months, kissing $100 and rarely dipping below $90/barrel. Do higher oil costs explain the decline in gasoline consumption? Once again, they undoubtedly influence consumption, but that cannot explain the 40% drop in consumption. After all, when oil spiked in 2008 to $140/barrel, deliveries only dropped by a few million gallons: from 58.8 MGD in July 2007, before the spike, to 54.8 MGD at the point of maximum pain in July 2008.
The cost of oil has declined sharply from mid-2008, yet consumption has tanked from 54.8 MGD in July 2008 to 42.4 MGD in July 2011. That's a hefty 21% decline.
What other plausible explanation is there for the decline from 42.4 MGD in July 2011 to 30.9 MGD in November 2011 other than a dramatic decline in discretionary driving? That 27% drop in a few months in unprecedented, except in times of war or sharp economic contraction, i.e. recession.
If we stipulate that vehicles and fuel consumption are essential proxies for the U.S. economy, then we can expect a steep decline in economic activity to register in other metrics within the next few months.
Such a sharp drop would of course be "unexpected" given the positive employment data of the past few months. But as the data above shows, employment isn't tightly correlated to gasoline consumption: gasoline consumption reflects recession and growth.
In other words, look out below.
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Don't you wish you were one of those guys that could get laid homeless and hitchhiking?
For as much flack as men get, and for as much as the PC media and educational system claim that men are the shallower of the genders, anyone who has hung around or been exposed to (even dating or married to) an otherwise sensible woman knows that women can be as shallow as shallow gets when The Real Housewives of Beverly Hills (or Camden - but that's called 'Is it your baby or not?') comes on the imbecile tube.
Women and men are different in many ways, but default towards galactically pitiful shallowness isn't one of them.
oh dear, it should be obvious that for every dude that drives a 'vette to "get babes" there will be a "hot babe" who's looking for someone to fund her lifestyle?
it's less about the car itself, and more about the two shallow people meetin' in that vast mating gene pool - y'gets what y'pays for, and like attracts like. . .
you want a shallow chick to bang? they're out there looking for you(r wallet) - just don't complain about low quality when you've set your sights on it, sheesh.
you people are stupid. Or maybe just jealous that you can't afford this type of car.
ALL women are shallow. Haven't met one YET who claimed to not be into cars who didn't wanna be seen in a nice one. It's just in their nature. Golddigger or no, they like attention.
phew Trav, thanks so much for proving my point!
perception is reality.
So do black women perform on a ten speed?
Trav, there is a difference between horsepower and horseshit
(good job Cath)
Yay!
Traded my Camaro for a Volt. I use diesel to start my woodstove fires.
why not an e-Drive Prius? I don't get buying a volt, it's totally unexceptional in every way
Drive one, try sport mode plus "L" on the shifter, which has nothing to do with gearing. Find a twisty road...it kicks ass, is quiet, comfortable, and very cheap to drive on solar power or the power co if you're still stuck sucking their dick.
A friend has a Prius. One ride in the Volt and it's for sale - the prius is a crappy cheap-feeling ugly econo box by comparison. Noisy, lousy ride, bad handling, top heavy....I could go on, his reaction tells all. Cash talks, bullshit walks.
Volt mostly made in America, by Americans - the parts that aren't are German (Bosch). Could be worse. Shares the suspension and steering parts with BMW.
http://www.zimbio.com/Chevy+Volt/articles/0fccEeVNzcb/Chevy+Volt+runs+out+juice+Lincoln+Tunnel
Yeah, real peach 25 mile range.. What is sport mode, two squirrels under the hood chasing a peanut.. At only $47,000 you should buy two, no worries the neighbors are supporting it with girant tax subsidies.. What are you a UAW Union steward?
If the volt is a shitbox it is by design.
What are you, a dinosaur?
Unemployed people drive far less, and people in general right now are doing far less road trips. For myself as a good example too, I moved to within a mile of a new job. My old hour plus commute each way is gone, and I never plan to return to it. The $520 bucks in gasoline I spent last May will never be repeated again hopefully.
smart move, why people would willing contribute to TPTB via insane energy spending is a mystery to me.
Um, wait , given the dumbass merican now days, scratch that.
(Bloomberg) -- The International Energy Agency cut its 2012 global oil demand forecast for a sixth month as a “darkening” economic outlook reduced prospects for growth amid supply concern following sanctions on Iranian crude.
Worldwide crude consumption will increase by 800,000 barrels a day to 89.9 million barrels, from 89.1 million last year, the IEA predicted in its monthly oil market report today. That’s 300,000 less than its previous estimate. The agency cut its forecast after a “sharp deterioration” of economic growth projections by the International Monetary Fund last month to 3.3 percent from a September forecast of 4 percent.
If this is the best they can do in an election year 2013 should be pretty bleak.
Can we find a math major who can calculate real unemployment based on reduction in gasoline sales & consumption?
"Soon I'll be out of a drive and not driving to work every day."
And then more refineries shut down...
This is like the proverbial Foo-Foo bird that flew in ever decreasing circles 'till it flew up it's own asshole!
But they do drive to the coffee shop and to the mall.
even better, when you live in your car, you have a much shorter commute. How many miles from the back seat to the glove compartment?
Also, those who ARE employed, and ain't getting paid shit, resort to taking public transportation to work/leisure.
In MASS, the MBTA just had it's biggest year or ridership. Now, our economy and U3 number is decent at around 7.3%, BUT we still have 120K jobs and 250K people looking for them. In a state that is 4th highest to live in, behind CA/NY/HI. This means simply: people can't afford cars.
Not only that, since oil/gas is going to be at an all time high this summer, the MBTA (in order to meet its budget), will have to increase fares by 43% AND cut 1.4th of its bus fleet, AND cut Weekend commuter rail service.
Yes, this is going to go over well.
Bullish! Gives more money to spend on American products instead of sending money to evil brown people countries!
/amidoingthisright?
You my friend have just explained why inflation and oil prices are raging. How will they now export the inflation, when we are not sending as much money to the oil producing countries through oil consumption. ?
10 points to bullshit !
1. Drive NG investment down to drive investors into oil. Check
2. Never complete the comprehesive alternative green energy program they have talking about for 40 years. Check
3. Keep the MPG of new cars and trucks worse than they were in the 80's. Check
4. Create fear around Nuclear energy to drive everyone to oil. Check
5. Create war mongering in key areas of the world where oil comes from to keep the price for oil and demand for Petrodollars high. Check
6. Forbid the building of new refineries and shut down existing ones to drive the cost of energy and Petrodollars higher. Check
7. Forbid the building of the Keystone pipeline that could lower the price of oil and the demand for Petrodollars around other parts of the world. Check
8. Forbid the drilling and expansion of domestic oil drilling so that it has a 3 fold effect. Higher oil Prices, Higher demand for Petrodollars abroad and the ability to export inflation by purchasing oil abroad and shipping the freshly printed money there, using it as a throttle (tool) to try and control inflation growth domestically. Check
9. Keep the Peak oil issue front and center to keep oil prices high and the demand for Petrodollars expanding. Check
10. Keep everyone believing that oil is a Fossil fuel to keep it's understanding to be a rarety and therefor the price of it higher than any other fuel. Check
That's why prices will continue to rise (even if no one ever drives again) The U.S. Dollar depends on the demand that the Petrodollar commands.
Peak oil Bitchez..............................LOL !
5(a). Create war mongering in Iran, causing them them to make good on their promise to close the Strait of Hormuz thereby crippling Asian economies and protecting the world's reserve currency. Checkmate!!!
More like fabricate a warmongering Iran. Most everything I see in the news suggests the warmongers are the US and Israel.
yeah, cause islam means peace. An shit.
"submission"
Yeah, all doz muzzy aircrafts carryings in da GOM must be a reel koncern?
Any cursory research would reveal 1/2 of your points to be complete and utter bullshit...
In fact your logic is so fucked that some of your points are mutually contradictory....
Hey Flak,
You ever think about "maybe" explaining your views on my post instead of generally being an ass ? Maybe address them specifically and show some intellect ? I should have put in the post that it is helping to drive inflation instead of just the word inflation for you fanatic types.
Explain your post.
I know, it's to much work.................................. right ?
I have been posting here for nigh on two years about energy issues... I have repeatedly provided links to non-MSM information, typically from industry insiders and geologists... I cannot help it if you are too fucking lazy to follow up and show some intellectual curiosity on your own....Instead you spout off dogmatic bullshit that is tinged with ideological claptrap...
I bet that you were fooled and misled by the MSM shills about what the US being a net exporter of "Refined products" really means...
Fuck, why not just google "US Refinining capacity" and see what you find?
Or why not just fucking google "Oil Rotary Rigs in Operation"....
Why not try to understand where and how oil comes into the country? Maybe then you would understand a bit more about Keystone XL....
Hell go to the EIA website and spend 1/2 hour exploring the information on US oil production and use.... If you have a 1/2 modicum of analytic ability you claim, then you should be able to figure stuff out on your own...
I'll leave you to think carefully about what exactly a petro-dollar entails and what occurs as the amount of oil on the open market declines.... As a hint, start by googling up "Export Land Model" and "Net oil exports"
Or you can go to the oildrum.com every now and then....
Ding, ding, ding. We have a winner. Goto the Federal Reserve website and search petrodollar recycling.
Well, just taking #10 for example demonstrates that these argument(s) are not based on any science, fact or industry data. Statments like that run the risk of dismissive language from those who know their stuff.
#9 is another strange one. The powers that be do very little to put peak oil in the forefront. We do know however that they have been discretely obsessing over it for some time. (See Dicks meetings and SCOTUS block and a host of other hidden gems -the key word is hidden) They certainly don't talk about it when they coincidentally move into oil countries to save their "democracy"
#8 overlooks the fact that many more wells are drying up than coming on and that all the big fields were long found long ago
#7 ignores not only all the legitimate water table and environmental risks but the large debate on the ultimate efficency and return of what it NOT at all oil.
#6 see all the other factors to explain the phenomenon
#5 See #9 - as Flak says, the logic is a little backwards and self contradictiory - war mongering and petrodollars have nothing to do with suppressing supply. Despite all efforts, supply can not be and has not been increased since 2005
#4 How did Japan pull off such a stunt and organize that wall of water to hit just right?
#3 see the rest of the world, America's problem here is corruption but it is silly to suggest this drives oil scarcity
#2 is correct but again, see corruption, this does little to prove that oil is not getting dangerously scarcer
#1 Natural Gas conversions have a tremenous number of twists and turns and supply, with massive use would be short term
Thank you... I really did not have the patience...
Diesel is killing me
How about heating oil? A 200 gallon minimum delivery around here is going for $3.89/gallon.
I bought a pellet stove and have saved $3000
How much does one cost that can produce about 90,000 BTUs? I'm asking to get a handle on how long the payback period would be after purchase and installation of a pellet stove.
I bought the top of the line one and it was $5000, installation which I had to pay because, $750.. Three tons of pellets $600
I think it's the wrong question to start thinking in aggregate BTU's...
Think FIRST about modifying the heated living space (& make sure that space is properly insulated)...
It's really a waste bto just think about heating an oversized living space with a pellet stove... I have one, but re-configured the living space dynamics, got that space better insulated, and the thing pays for itself in not too much time...
Someone here gets it....
I am actually impressed at the increase in the number of people that are starting to figure stuff out...
It was not so long ago that the Hedge was no different than Yahoo! when it came to the quality of comments on Energy matters...
We come a long way, baby!
Still a way to go to get to theoildrum.
Well... TOD is not the place to have a serious discussion about some financial matters...
And I don;t know if discussions on fertilizing your backyard veggie plot with human waste will ever catch on here (not that it is discussed extensively there...)
There is no one-stop-shopping website....
True.
http://humanurehandbook.com/contents.html
Straw bale homes and other thick walled compositions. South facing windows. Big concrete slab to soak and release the passive heat. Kill the McMansion, expand the yard and garden. Walking to your organic food decreases petroleum at every stage of food production and increases nutrition at every stage of your health.
(Plus it fucks with the banks)
Terrorist!!
I'm not a terr or ist, I'm a tear this list. All our "priorities" suck.
"(Plus it fucks with the banks) "
And, if done right, it fucks with Monsanto!
When I was living in the UK I was taken by a friend to check out his mate's staw bale house. He had covered the outside of it with some sort of mud that baked hard in the sun to seal it all in. That didn't stop the livestock though and some sheep had got in to his yard and nibbbled a big hole in the corner of his house. Plus the water had got in around the window frames and started to rot the walls. Like living inside your own silage bin. Toasty!!
there are a lot of amateur jobs but plenty of folk who can do it right. Sealing is crucial. There are structures in nebraska 100 years old
Good design and proper execution are key to just about everything, no?
even in the bedroom
One thing to be taken into account before you go with the pellet stove - will you still be able to get fuel when TSHTF? Depending on your area, wood and/or coal may be a better choice.
Yeah, and most use electricity to feed the pellets. Gasifier design is more efficient and depending on design can burn a wider range of fuels, some including pellets. Coupled with efficiences in insulation of the home and adding thermal mass to reduce overall consumption, you'd do much better.
Since you are not supporting the economy, you are a terrist.
and if you actually show up to vote rather then just say that you did, you might be a terrist of the worst kind.
It's the ones that don't show up to vote because they don't like the choices that are offered that are the "terrists".
When you vote, you are taking part in the PTB's charade and agreeing to abide by the result.
Count me in, I use a woodstove and cut my own wood. Keeps my guns from rusting.
How does that keep your guns from rusting?
fired heat dries out the air in your house....
Ah, gotcha.
P.S. I didn't junk you DCFusor.
I rarely come back to see the junks anyway. And yes, the dry air keeps things from rusting in the gunsmith shop.
What? ... no ... higher temps correlate with higher humidity and lower temps correspond with lower humidity.
i.e. air at higher temp holds more water in suspension before it reaches saturation and precipitates out, which is what makes warm tropical downpours so much more intense than at cool higher-latitudes.
Metal oxidation is related to oxygen reactivity, which is enhanced by higher temp.
Water has little to do with this unless there is a slow electrolysis or micro salt crystal adhesion involved.
i.e. something like WD40 creates a thin film that keeps oxygen out of direct contact with metal, hence almost no oxidation.
'Blueing' a rifle barrel does the same thing, as blueing is simply a form of surface oxidation that prevents further oxidation from taking place.
You wanted to know that, didn't you?
(basic shit like this matters to me, otherwise you get brainless dipshits from GreenPeace and the IPCC tring to use GIGO computer models to tell you that a hotter Australia will be a drier Australia ... when all the geological evidence we have clearly shows the exact opposite will be and always has been the physical truth, in Australia's past)
Almost right. Hotter air holds more water - if and only if you put more water into it. If you heat cold air without adding water, the relative humidity goes down. Since in nature, there's usually water around, yeah, in nature when it's hot, there's often more water in the air, unless that is, you're in a desert. Or indoors...duh.
I cold-blue guns, and yes, it's partial oxidation, magnetite. You actually go all the way to rust first, Fe2O3, then reduce it to Fe3O4 by boiling in de-oxygenated water which wants oxygen so bad it steals it from the rust. It's pretty stable if done right, and doesn't re-oxidize easily.
Don't fuck with a real scientist.
Wood heating, I'm afraid, is not Politically Correct.
Burning wood for food preparation causes considerable particulate pollution, as does the heating derived thereby. Note that this does not include the Carbon Footprint of burning wood products for cooking or space heating.
People who burn wood are terrorists.
Your Carbon Footprint will be reduced - we have your ISP details on file for future attention.
You only have a scant window of opportunity in which to recant your evil, profligate ways....... otherwise people like the Flakmeister and his ilk will be after you, and baying for your blood.
Be warned.
So, I'm a terrorist. The wood I burn came from land I own, which got there by taking that carbon out of the air, from guys like you putting it there. I change some of that wood into lumber and sequester carbon that would otherwise go back into the air when the termites eat it. I have enough land to only have to burn the dead stuff or trimmings I do to keep the woodlot healthy - that shit was going back in the air, I just stole the heat out of it along the way.
You can suck my particulates. They probably don't even make it off my land, and not being stupid enough to live where there's a permanent inversion (LA), we don't give a flying fuck. Not being stupid enough to live nuts to butts in some big city, we have no smog, and actually think that nitrous oxides falling out of the sky in rain are free fertilizer.
You guys are the terrorists just by being alive and living a "normal life" whatever the fuck that is. All the world needs is less of ya - we smart people will do fine, without entitlements, help, cheap gasoline or any interference. It's too hard work for most numb nuts, but we like it.
Cooking with wood is too much work when the solar panels can easily run my stove and microwave.
And I don't give one flying shit about being green - this is about being self sufficient and free, and working with nature rather than fighting it - it fights back hard, as ignorant city dwellers are just now figuring out.
You hillbillies are loving this aintcha?
us city types with our soft hands and clean toilets finally getting our cummupance with rising crime and paranioa making the trigger finger itchy.
you knew this was gonna happen so you got outa dodge city.
yeah , all of us see ourselves tramping about the hills in a loin cloth with the kids having 10 of their own kids by 25. i'm jealous i admit it..
but the time for the hills is retirement.
for now you have to stay and fight and get things done.
we all maneuvre ourselves... i left a dying europe....
but now i make my stand in my new city.
no more retreat.
no further.
Hmm, I sometimes wonder about the value of a /sarc tag......
Serious question - what sort of kWh is required to get your Volt up to full charge? My 'leccy is 240V 10A, as opposed to yours @110V so I'm interested.
Cheers, spdrdr
You (R) a great poster! Pellet Stove! I Can't stop LMFAO!!!
Installed a wood stove/outer SS insulated chimney myself in 2008 for ~$4000. Paid for itself in two years. Today I ordered $100 in parts (new catalytic conbuster, new andirons) and I didn't even blink because i know I saved myself 2k this year in heating oil cost. I use my oil furnace for maybe 7 days all winter long, recently spent $141 on oil to top off my tank, which was 3 years worth of wood stove usage.
I can't believe more people aren't utilizing their fireplaces/hearths to put in an insert or stove. Even if you use it HALF of the winter, or during cold times, you'll still see the benefits. Just think how you'll feel when the ecnomy implodes.
You kick ass! I meant that in every good way! I can't wait to taste your " Home Suds" ! F..King awesome!
Not to be a downer but if anything happens those pellets are going to be hard to find, wood not so much..
Geesus/ all knowing? Buzz Kill!
Can you pelletize banksters? Politicians? Sheeple?
Refined petroleum (gasoliine) demand is tanking? Certainly not reflected in Brent price (or at my local pump) and neither in crude price really. What is GLOBAL demand again? the U.S. market is becoming less relevant every day.
They say the same about the US Constitution
I'd like to see total global demand numbers because I bet that even though we are hearing that the Chinese and Indians are driving so much more total gasoline usage isn't up but down.
The "price" of oil has nothing to do with demand, no matter what your econ text book says. That book presumes a stable valued currency and what you are seeing in price increase is really currency devaluation v. a real asset rather than some supply / demand dynamic.
Precisely, anyone with a link to global demand numbers?
... maybe this ...
http://www.eia.gov/cfapps/ipdbproject/iedindex3.cfm?tid=50&pid=54&aid=2&cid=&syid=2010&eyid=2011&freq=M&unit=TBPD
The price of oil is in fact very steady, it's around 15-16 barrels per oz of gold.
And the price of gas in silver dimes is $0.13. Less than half of the average cost in 1964 of $0.30.
You can pick one of Ag or Au to be your benchmark... Au to Ag was fixed by fiat...
If Au is used, the price of Au was $35 then or gas was ~1/100 of a oz of Au... that now translates to $17 bucks a gallon....
Don't misunderstand me, I agree with the basis of the thesis, just not how it is usually spun...
supply-demand-price equilibriums are long gone. distorted money rules now.
Very interesting and informative analysis. Thank you.
Chinese New Year. Duh.
Because the emperor says it should.. Obama has spoken, so let it be written so let it be done.. Drum roll..
oh in Chinatown of course...
Peak Everything .. The disintigration will continue and there is no power great enough to stop it. Do a report on Cattle herd... also collapsing. Welcome to a new dark age.
Peak social complexity and hence, population. The mathematics of funny money might keep the hamsters on the wheel pretty good. But, there isn't any escaping the mathematics of limited resources and the cyclical behavior of our species. What concerns me most is how it will unfold and how fast.
We need to increase our energy flux density.. and that isn't happening.. so we're in for some tough times ahead
Well, that's one way out. Of course, TPTB will choose the opposite route by eliminating all those useless energy consumers.
Either way, were left with...
Entropy, it's what's for dinner.
Google: Mizuno + LENR
There's a profound change in Civilization As We Know It coming. How this plays out is anyone's guess, but it is real and it's a Big Deal. Dr. Mizuno is real and he's not a crackpot.
It would be so good if we could have had demonstrable proof of cold fusion by now, however, we haven't.
Even the most recent positive tests of Andrea Rossi's E-cat haven't been scientifically validated. Mr Rossi is his own worst enemy as he still refuses to let anybody look inside his magic box. I accept that the following article could be a devious plot to further discredit him but I think it warrants reading by anybody who is interested.
Fraud claims over E-Cat "cold fusion" machine heating up.
Australian engineer says wiring errors may be responsible for alleged 'scam'.
http://www.msnbc.msn.com/id/46342612/ns/technology_and_science-science/#.TzWgAU6SfnM
I don't know about Mr. Rossi and his E-cat. There have been reports of excess energy, but something about Rossi makes me uneasy.
I'm pretty convinced that Dr. Tadahiko Mizuno has demonstrated proof of "cold fusion". He wrote a short book, The Reality of Cold Fusion, about 10 years ago detailing his experiments. He's written quite a few peer reviewed papers since then and he's considered to be an expert in the field. He's one of the few good experimental electro-chemists. He works at Hokkaido National University. He's not very good at self-publicity and it doesn't appear he wants to be.
Google Mizuno and read some of his papers. You might be surprised. I found him to be very believable. It helps if you have a chemistry or physics background.
There are some very large industries and very wealthy people that have a lot to lose if this is real and can be made to work.
Actually all those government sponsored new cars you rail about all the time get a lot better mileage than the old ones so while total mileage may be down I doubt whether it has fallen as fast as consumption. Also there are people like me. My wife wanted to move so we moved to a condo downtown and I work 4 blocks away and markets and shops are all within 10 blocks so we use less than one tank full of gas (we also cut back to one car) a month compared to three for how we used to live.
That's the best part of the foreclosure mess
Those who live in their car have a shorter commute home.
That brings up another interesting fact. How many people are like me and sold off second or more cars? We had a second car, and I sold it. There was very little point in having it. People may have less cars now than before. A lot of people who are unemployed are probably getting cars repossessed too. Hey, imagine the money you'll save not buying gasoline?! har har
But the increased repo men help the employment numbers...
Yes but tow trucks have terrible gas milage.
I just bought a third car and am thinking about a 4th.
Ahhh the Mormon approach. Do you stockpile fuel?
Does it matter unless he found a way to drive more than one car at a time?
One could argue that it's more fuel effecient to own multiple vehicles as to have several specific use vehicles instead of one general use one. If I were to have one vehicle with my wife, 2.3 kids and dogs I'd need a van or SUV. Fine for trips to grandmas, but a killer to drive to work every day at 20mpg. Instead, I have a dedicated fuel sipper for work, a dedicated "man" 4x4 for hauling kids and mid-sized jap bike for work & play when it's nice out. The average MPG of all those is 39mpg but the weighted average of use is closer to 46mpg. If I could only choose one vehicle, it would have to be the 4x4 at 18mpg all the time.
Comming off the peak consumption years as we are, its a great time to buy used vehicles for specific purposes to save fuel. 2nd Gen TDIs are around 10 years old now and can be had for maybe 2 0z of gold. They get 50mpg, don't rust and generally run a quarter to half million miles if serviced properly. The GM diesel trucks from the 80s get about 20mpg (on par with the new trucks), last forever and can be had almost free if you know where to look, assuming the crappy GM vehicle around them hasn't rusted apart. Everything else that could be wrong can be had from a junk yard for next to nothing. All in all, its a good time to prep for $300/bbl oil if you think outside the box a bit. If the world goes all to hell, the last people driving will be in old diesels that can be bought for less than 2 grand today.
nice
You can run a diesel on vegetable oil too.
Geico thanks you for your service.
yeah, that was my afterthought
The new insurance rates discourage this for most people that live in states like Nevada and Calif. that require active policies in order to possess license plates. Insurance costs per auto have increased more than any other auto expense for me. It's all part of the FIRE fraud that we sheep cannot easily avoid being victims of.
That brings us to consider the quality-of-life aspect. Is life better with or without that second car?
For me, my second car - my wife has her own - averaged about 8 mpg until the V-8 turned into a V-7 at around 7000 rpm. I've saved a bit of money since it died.
Fortunately (or not), I was forced into retirement last July and now use 1/5 as much gas as I once did (no, not the car that died). So the drop in national consumption has suffered in part due to my employment status and the death of my V-8. The economy overall will probably benefit once I drop some money into a V-10 to replace the v-8, but that's a separate issue.
7000rpm?????
Heh. Yeah, my old Caddie 472 V8 would've been traveling at about 370MPHs if I could've gotten the tach to 7000RPM.
Duh! It depends what gear you're in and what the engine redlines at and/or the rev limiter cuts in.
Your retarted.
Was that a 71' thru 73' Caddy you are refering to. ?
yeah, I've got a V8 that goes that high...a 6 that goes another 1000 higher and a v4 that goes to 12 something
Why stop at a V-10? During the last depression, American ingenuity produced the V-16. I don't know for sure that this was the reason America came out of the Great Depression, but it suspiciously coincided with her recovery.
http://auto.howstuffworks.com/1930-1940-cadillac-v-16.htm
/sarc
Hell, why stop there. Let's have a ground war in Iran, and then deploy a few armored divisions. Tanks and IFV's use tons of fuel!
/sarc off
Oh! I see what you did there...clever...very clever.
Can't wait for the Gov to start appointing jobs. They will need to be within walking distance,....
c
Actually all those government sponsored new cars you rail about all the time get a lot better mileage than the old ones so while total mileage may be down I doubt whether it has fallen as fast as consumption. Also there are people like me. My wife wanted to move so we moved to a condo downtown and I work 4 blocks away and markets and shops are all within 10 blocks so we use less than one tank full of gas (we also cut back to one car) a month compared to three for how we used to live.
its the Volt
and Solyndra
another 1000 off the road
You're just killing it.
Plus the new steam engine conversion kit for when it has caught fire.
I sell convenience stores. The numbers are real. Except for a few Interstate C-Stores & Truck Stops, gasoline sales are down accross the board.
Can you tell us why so many Indians (dot, not feather) own them? do they get grant money or special loans to buy them? I live out in the stix and even gas stations 50 miles from nowhere have been bought out from their former cracker owners by Indians in the last 3 years. It's not like you step off the boat, find a station in the middle of nowhere whitesville and get a million dollars together to get up and running do you? How's that work?
My understanding is that the Indian and Chinese ethnic communities have developed a system to help new arrivals. The money is loaned from a common fund to establish the new arrival in business with the requirement that said money is to be repaid in order to help with the next need.
This is true from my experience as well... however, if you're a creditor, then good luck collecting... the names get changed and the people skip town to be relocated... rinse repeat... this is great for a few times, but word gets out quickly.
An Indian family bought the little country store (once owned by a plaid-shirt wearing Yankee geezer) 1 1/2 mi. up the road from me. They're okay, open late, friendly service, and they still carry maps from the local snowmobile club. I think that they live in the office out back....
Same around here. I think it's because it's primarily a cash-rich business, has long hours but is relatively easy work, and they pool monies to buy-in. I'm good friends with the one closest to me and they basically run two registers, they cover each other's stores, and often the are owned in part by a relative(his is an in-law). I once went to 4 of them and all were closed on a particular day, had to drive to a Pik-kwik. Found out that one of the local owners had passed away and everybody else took the time off for the funeral. Overall they are a good benefit to the locals; extending credit, giving price/goods breaks, and using local people for their trades needs. This guy got burglarized and we had his store sealed up like a vault in a week, even got him a deal on a new gun. I think they have their own 'community' which we no longer have, that makes that possible.
Since unemployment is down, all the newly employed people buy Teslas and Leafs. No gas needed anymore. Gas consumption data support government data.
Is that you, Michelle?
...or maybe you're Ratner or Timmy.
Nice try. Come up with another howler.
So people buy Government Motor cars with government sponsored sub prime loans but don't drive? These truly are weird times, lol.
Well it's really just dealers buying those govt cars to make their lots look pretty and shiny. They need to be stocked for the next round of Cash for Clunkers so that all of those retired people who are 40 and no longer in the "workforce" can trade in the leased 2008 Pontiac G6 for a new Chevy Tahoe Hybrid........my God there really is such a thing!
"With an EPA-estimated 20 MPG city /23 highway, Tahoe Hybrid3 offers best-in-class fuel economy4, plus the capability you've come to expect from Tahoe. Towing. Hauling. Driving six kids around. With 332 horsepower, 367 lb.—ft. of torque and up to 6,200 lbs. of towing capacity5, Tahoe Hybrid rises to every challenge. Whether you're navigating the neighborhood or taking it off the beaten path, you'll have peace of mind knowing that you've chosen the most fuel-efficient full-size SUV out there4, and it's backed by a 100,000-mile/5-year powertrain warranty and a 100,000-mile/8-year warranty6 on certain hybrid components." http://www.chevrolet.com/tahoe-hybrid-mid-size-suv/?seo=goo_|_2008_Chevy_Retention_|_IMG_Chevy_Tahoe_Hybrid_|_Chevy_Tahoe_Hybrid_|_tahoe_hybrid&utm_source=Google&utm_medium=cpc&utm_campaign=Retention-Chevy-IMG_Chevy_Tahoe_Hybrid&utm_content=Search&utm_term=tahoe_hybrid
Plus, with those fake EPA numbers, expect real world 12/18 if the thing is empty, more like 8/14 assuming a few things inside, even worse towing the boat.
02' suburban with a 5.3L gets 16, 18 on the highway and towing hardly knocks it down.. Syn oil, good plugs, clean filters...
My '84 chevy blazer gets those numbers. Its not 300 HP but it can keep up with traffic. Its like time stopped in 1982 when it comes to detroit.
Must keep gas consumption high so there is more demand for Petrodollars as gas consumption plummets, inturn supporting the dollar.
Bernanke, looking at this chart, says: "hmmm, it looks like it supports my QEn decision".
Dude...it's because a lot of people are driving invisible solar powered cars.
Invisible cars run on Hopium, not solar, dumb-ass.
why wouldnt the drop in economic activity exactly coincide with the drop in gasoline usage? ie why would driving less be a couple month leading indicator rather than coincident? something not right
Is it because so many people now drive Chevy Volts? They get their energy from butterfly wings so we ought to see a reduction in gas usage.
Are butterfiles slaves?
Many have had the optional power assist wind mills installed to get even better mileage on those Volts.
Don't be a fool !
People have no money. People that have some money are driving less. I personally stay home Much more than I did before 08'. I now only drive my pickup truck only when I have to haul something that will not fit in a car. That is saving me about 10K miles a year. If I was smart I would get rid of the truck and all associated costs and have any big stuff delivered or rent a truck.
I still have my 1985 Ford F-250 but you have to have a pickup if you live on a farm. It gets used about 2,000 miles/year for short trips to haul big and bulky stuff like hay and equipment.
This one gets my vote. In this country driving is like cell calls, a good percentage is not necessary. Was talking to mom yesterday and she said Dad now plans ahead so all his daily tasks only require one trip out.
Father knows best
(not to be confused with a man of the cloth)
a number of ways to answer this, anecdotally the number of UPS Fed Ex trucks in my neighborhood is way down. what are their stats saying? and yes fewer people working means fewer miles driven, but fewer trips shopping? hmm? secondly there's an industry wide move to make you drive fewer miles, they call it the LEASE program, where they limit the number of miles you can drive without a penalty. (my cousin had to rent a car to visit me because his lease car had used up all their miles) thirdly a great many industrial users, schools, trash companies, buses, have gone to Natural Gas. shhh you know a conversion kit is about $500 dollars, and Natural Gas is only half as expensive as gasoline, but I if were the POTUS trying to push electric cars I wouldn't say anything either.
finally the new law of supply and demand demands they charge you more for something you use less of. their margins are thin, and they make it up on volume, no volume prices have to rise. if only a few thousand people wanted an Iphone what do you think it would cost?
your thought for the day...
grate,
got a website for that natgas conversion?
http://www.cleanvehicle.org/committee/technical/PDFs/Conversion_Press_Re...
I grew up on a farm in the seventies and my Dad switched everything over to natgas. Maybe it's better now but at that time, the fuel economy went waaaay south. A truck that got 15mpg was getting 5-6mpg on natgas.