Oil Industry Braces for Drop in U.S. Thirst for Gasoline

[bananas]

Source: Wall Street Journal

Among those who say U.S. consumption of gasoline has peaked are executives at the world's biggest publicly traded oil company, Exxon Mobil Corp., as well as many private analysts and government energy forecasters.

The reasons include changes in the way Americans live and the transportation they choose, along with a growing emphasis on alternative fuels. The result could be profound transformations not only for the companies that refine gasoline from crude oil but also for state and federal budgets and for consumers. Much of contemporary America, from the design of its cities to its tax code and its foreign policy, is predicated on a growing thirst for gasoline.

<snip>

Right now, the recession is curbing U.S. gasoline consumption, as laid-off workers stop commuting and budget-conscious families forgo long road trips. Drivers filled their cars with 371.2 million gallons of petroleum-based gasoline every day in 2007, according to the U.S. Energy Information Administration. It expects that to fall 6.9% to 345.7 million gallons in 2009, as demand at the pump declines and the use of plant-based ethanol increases. Even if usage climbs after the recession ends, it won't exceed 2007 levels, according to EIA forecasts.

<snip>

Exxon believes U.S. fuel demand to keep cars, SUVs and pickups moving will shrink 22% between now and 2030. "We are probably at or very near a peak in terms of light-duty gasoline demand," says Scott Nauman, Exxon's head of energy forecasting.

<snip>

Read more: http://online.wsj.com/article/SB123957686061311925.html

[AndyA]

1. Congratulations oil companies! You priced yourself out of demand.

With gas at record highs last year, people were forced to look at how they used it. The greed of the oil companies, no doubt working in concert with the Bush Administration, caused many to rethink how they use gas. And people are finding other ways of getting around, and they've figured out how to use less gas when they do need it.

I still want an investigation into oil company profits the last few years.

[Missy Vixen]

2. +1

Suck it, oil companies!

In the meantime, I'd be all up for those investigations, too. Aren't price-fixing and gouging illegal?

[lutefisk]

9. Investigations? Unfortunately, this administration wants to look to the future, not the past.

Only negative-Nelly backward-lookers want to investigate treasonous Presidents and criminal corporations.

[4_TN_TITANS]

21. Priced themselves out of demand by

giving Americans on the edge in 2007-2008 a good push over the cliff to exacerbate the recession. People were quitting better paying jobs for ones more close to home here.

[Sinistrous]

3. Looks like it is time to close a few more refineries, so

big oil can create fake shortages and the accompanying price gouges.

[SlowDownFast]

4. Yep. Don't think that this means that gas prices are going lower or flatlining.

They're about to go higher for the considerable future.

Maybe much higher.

Lower demand means shut-down of drilling, supply, refineries, etc., which will probably lead to gouging and perhaps even shortages.

The price of crude oil may (read: will probably) dislocate from the price of refined fuel.

Based on this thesis (and a potential complete collapse of the economy), I just filled a 500 gallon fuel storage tank with unleaded recently.

[No More Bushbots]

7. That would be an incorrect assumption

The current Congress and the Obama Administration will not hesitate to pass a Windfall Profit tax on Big Oil if we see a run up like we saw last summer.
Big Oil wont risk it.

[SlowDownFast]

8. Sure. Just like they did "not hesitate" to protect our Treasury from being looted...

And "not hesitating" to prosecute all the rest of the financial fraud and the war crimes and violations of the Constitution perpetrated these last 8 years.

Uh-huh.

[imdjh]

14. well to be fair

We also have to revive the original peak oil theorists from the 1920's to declare that even though demand has dropped off we're running out by next week even if the scientists who actually make their living from oil say that there is a 100+ year supply even with India and China getting their drivers licenses.

[BeFree]

19. To really be fair

We are importing more oil than ever. Why? Because we in the US use more oil than we can produce. No expert ever said we will run out of oil next week, so that is a lie. But there is a peak of oil supplies and we may have already reached it. That means the glass is full and it's getting drawn down at over 371mgd in just the US alone.

We've used up 100 years of supply and that means that at this peak we have just 100 years supply left.

&&&&&&&

I've been posting here for years that the government didn't want gas consumption to decrease because that would mean a decrease in tax revenue. Good to see others seeing that sad fact.

[L0oniX]

5. Didn't Exxon just post record profits?

[SlowDownFast]

6. Indeed they did. n/t

[pleah]

10. Oh, I think this calls for one of these.

:nopity:

[PSPS]

11. Drill baby drill!

Oh, wait...

[One_Life_To_Give]

12. i.e. With the prices were going to charge, consumption will

i.e. With the prices were going to charge, consumption will only be 78% of the $2/gal level.

[imdjh]

15. They have been gouging us for the last six months haven't they?

Was there any reason for the price of gasoline to go from $1.50 to $2 ?

[azul]

13. Oh dandy, the narrative from EXon and the Lizard of Oz's WSJ

to define the discussion on energy supply and demand for the next 30 years?

The narrative that should be dominating this news should go something like:

Every barrel of oil burned now contributes to cooking the planet and supporting terrorist extremists, opposite the direction of a stable and peaceful world. We all should be abandoning this dead-end oil power as fast as possible and put all traction and effort behind using alternatives now. This is the opportunity to create jobs and infrastructure to replace the defunct ones that we have ventured into at our peril.

We need to set a higher, more realistic price on gas to help with economic planning for businesses that are currently at the mercy of oil cartel and energy trader manipulations, and to use the higher taxes on gas to fund and subsidize sustainable, less destructive alternatives.

Say set the price at $5/gallon: the cost paid to pumpers and peddlers would vary $1-$4 to cover their costs and the difference to be the alternative funding tax.

Phase out oil as quickly as possible. National security and world wildlife crisis.

[sarcasmo]

16. Exactly what the Greedy oil companies need..

[IrishBuckeye]

17. Unfortunately India and China will more than makeup for any decrease from the U.S. /nm

nm

[depakid]

18. It NEVER fails impress how parochial Americans are about petrol prices

as if they don't get that they pay relatively lower prices than other western nations- or that other nations don't aren't hit by international price increases that they think are aimed at gouging them.

If the OP is to be believed though- it's at least some small indication that habits and behaviors are changing, and that's a positive thing, because around 5% of the world's population can't keep on using around 25% of the worlds' energy resources while petroleum reserves slide down the depletion curve over the next two decades.

[NickB79]

22. "China record car sales beat US for third month: state media"

http://www.google.com/hostednews/afp/article/ALeqM5idtzSUSVnnCk-GNsLNzin4_33H6Q

"SHANGHAI (AFP) — China's car sales hit a monthly record of 1.08 million units in March, state media reported Wednesday, outstripping the US as the world's largest market for a third month running.

China's March new car sales beat the previous record of 1.06 million units set a year ago, the official Xinhua news agency reported Wednesday, citing China Association of Automobile Manufacturers figures.

The association said vehicle sales in the first quarter rose almost six percent from a year earlier to 2.64 million units, the report said."

Chinese demand for cars continues to grow despite the economic downturn. That means their demand for oil will continue to grow.

[KillCapitalism]

20. Ding ding ding...they hit the nail on the head here.

"Right now, the recession is curbing U.S. gasoline consumption, as laid-off workers stop commuting and budget-conscious families forgo long road trips."

Insanely high unemployment rates = less miles driven.

[NickB79]

23. If global oil supplies begin to fall, then there is the potential for gas prices to shoot back up

And if actually have reached Peak Oil (as the Oil Drum has publicly stated), future oil supplies have nowhere to go but downward.

Then, it becomes a race to the bottom. Does the demand for petroleum products fall faster than the supplies do?

[Hannah Bell]

24. Breaking: US Oil Industry Expects Americans to be Poorer by 2030.

[SKKY]

26. I'm glad I wasn't the only one who got that impression from the article...

[rollingrock]

25. Profits not obscene enough this year?

don't worry, Geithner will award them with a $100 billion bailout and mega bonuses for all the executives.