Forget Peak Oil; Peak Gasoline is Already Here - WSJ

[bananas]

http://blogs.wsj.com/environmentalcapital/2009/04/13/green-ink-forget-peak-oil-peak-gasoline-is-already-here/

Green Ink: Forget Peak Oil; Peak Gasoline is Already Here
By Keith Johnson

Crude oil futures fell below $51 a barrel as the market reacted to the IEA’s bearish oil-demand forecast, Bloomberg reports.

And the demand picture is indeed weak, especially in the U.S., where gasoline demand apparently peaked in 2007 and won’t return. That’s due to a cocktail of higher fuel-efficiency, shifting transportation habits, and the growing role of biofuels, in the WSJ. Speaking of which, the University of Texas boasts what could be the world’s largest collection of algae, suddenly in demand as a biofuel feedstock, also in the WSJ.

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

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

By RUSSELL GOLD and ANA CAMPOY

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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.

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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.

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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.

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[HamdenRice]

1. Huh? This is almost the exact opposite of the peak oil phenomenon

This is saying that demand for gasoline has peaked, not that supply has peaked. In effect, it's saying that the peak oil projection of increasing demand and limited supply and a crash is not going to happen.

[Terry in Austin]

2. Really! That was quite a slick switcheroo, no? nt

[NickB79]

3. It all depends. If oil supplies start to fall quickly, gas prices could very well skyrocket again

And some of the numbers thrown around on The Oil Drum are pretty scary (4-6% global production declines per year).

[Javaman]

4. it works like this...

people are broke. They by less and less. travel less and less. thus demand for gas goes down. but, why hasn't the price gone down?

Because the refineries are holding back refining to maintain gas prices which doesn't help the people because they are broke and buy less and less and travel less and less, so therefore, demand will continue to go down as long as the prices don't reflect the income of the average person in a depressed economy.

In other reality, where fossil fuels don't contribute to global warming, the price of gas should be mandated to reflect demand, thus allowing the people with no money to buy gas at lower prices. (deflation) but given the fact that our energy policy over the last 100+ years has allowed the monopoly of various fossil fuel corps to dictate what the price can be and what it can't based upon their ever wanting investor base, they must maintain a price by which it makes their bottom line happy: the investor.

So here we are living under the false pretense that gas demand has peaked. no, the economy has peaked and is tanking along with everything else that it's taking down with it.

Oil will rise once again, but it will only rise again once US economy "recovers", because oil, world oil, it based upon the US petro dollar. Which replaced the gold standard.

The US economy improves, the dollar gets stronger, the price of oil goes up, people have jobs, need to drive (or feel the need to drive), demand goes back up.

But this time around, things will be very interesting, why? because there is a glut of gas and oil at the moment. And so even with a recovery, technically speaking the price of both oil and gas should remain low for a while until the world catches up, if it ever does, with its gross over use.

if and when that ever happens, then you will see, what I like to call, the last hurrah. The price of fossil fuels will begin in earnest, it's last run up. Finally, peaking when the world has either: had enough, started a massive war for the last few remaining drops or got a clue and figured out that we have to live with less (like right now) and switch over to alt fuels, what ever they wind up being.

See, easy, right? LOL

see you all on the other side!