Why Is Gasoline Consumption Tanking?

Of Two Minds ^ | 2/10/2012 | Charles Hugh Smith

[VA Voter]

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.

[SaraJohnson]

For sure, people can not afford money for extra gas because it is so expensive now. People can not afford to shop, either. Then we have millions uemployed... The watermelons are very happy with their nasty selves. This is what Obama said he was going to do.

[Jack Hydrazine]

But you don’t see the cost of gasoline and diesel in this country dropping to a level on par with the drop in demand.

[Oberon]

Another reason: My family bought a 2009 Hyundai Accent (dinky little econobox) to replace our full-sized Chevy conversion van in long-distance driving. The conversion van was consigned to in-town service; the savings in fuel costs pays the car payment.

[Publius6961]

Also, 11% fewer people driving to work.

Well, D'UH!!

Only actually the number is closer to 20%, if you count ALL adults who have exhausted their unemployment, given up on finding a job, underemployed, or recently "joined" the job market.

[fredhead]

Here’s how I decreased my gas consumption. We have two drivers (wife and I) and three vehicles, They are:
2010 Ford Focus
2007 Nissan Titan
1969 VW Beetle

The Titan sits in the driveway. Wife drives the Focus, uses about 9 - 10 gallons a week. I drive the VW, use about 5 - 7 gallons a week. If I drove the truck, I would burn between 12 - 15 gallons a week.

So now the truck is used only when a truck is needed, and I suffer the wonderful anemic engine smelling lack of heat of a classic air cooled Volkswagen.

[NRG1973]

Is gasoline consumption really tanking or, is this just another case of “funny numbers” from the government?

After all, its easy to reach 8.3% unemployment if over 1,000,000 people are dumped from the workforce in one month.

[Capt. Tom]

Here is my take.
We know from past experience Americnas will continue business as usual when gasoline is $3/gal. Been there done that.

We know when gasoline hit $4/gal they won't readily pay it; and they slowed down the consumption. Been there done that.

So somewhere between $3 and $4/gal is the right sweet spot for gouging.

However Americans cut back driving at $4/gal when the economy was fairly good.
The economy is not good now so anything over $3/gallon is going to see a pullback in gasoline consumption.

If gasoline goes up to $4/gallon it will further criple the weaker economy.
If it were ever to reach $5/gal as some predict, we would end up in a depression. - Tom

[Tallguy]

The big gains in fuel efficiency are behind us. Used to be a typical car averaged say 12 mpg combined highway/local driving. Then it jumped to 18-22 mpg. Now the automakers are using every kind of expensive gimmick as well as drastic weight reductions to squeeze a few marginal mpgs more to meet congressional mandated fleet mileage figures.

In addition, many of these little sedans can transport more that 2 adults and 2 children making the car of low utility except for basic work commutes.

[woodenickel]

I moved my office to less then a mile from my house.

$3.50 a gallon is insane only if a Republican is in the white hut. You don’t hear the left complain about the price of gas now. Why is that?

[weeder]

Lawnmowers. It’s the lawnmowers. Last July, they were heard from dawn to dusk. Now, I open my window, I don’t hear a single lawnmower. Wait until May. Those numbers will climb again.

[VA Voter]

Lawnmowers? lol.

[radioone]

“Because we’re all driving our new Volts?” /sarc

I, too, was amazed that 600 “O”-Volts being sold each month would have this much impact on the use of gasoline. Now, if they would just add a teeney weeney windmill on top....what, another 20 to 30% drop???

[C. Edmund Wright]

I totally agree with your assessment.

[blueunicorn6]

Brilliant! It’s like a bright light shone and I could see the truth of it all. Wait a minute.......what about snowblowers?

[JediJones]

I second that emission.

[bicyclerepair]

These upgrades have long paid for themselves.

K&N Air Filter
Mobil 1
Insulated air intake
50psi High-perf tires/wheels
Low restriction exhaust
5-speed (orig equip)

[mountainlion]

I am tired of being ripped off and have found other ways and things to do.

[weeder]

Their gas consumption is cancelled out by weedwhackers and outboard motors in the summer. That’s my theory, and I’m stickin’ to it.

[nascarnation]

Yes the low hanging fruit has been picked.

My new Chevy Cruze Eco gets similar mileage to my 15 yr old Saturn - about 40 mpg highway.

The Cruze is actually about 400lb heavier though, and it is far quieter and smoother riding, and likely much more crashworthy.

[Wuli]

The “alternative” locomotions are not going to benefit from either major drops in gasoline demand, or major improvements in MPG for gasoline powered vehicles (which helps reduce demand forces), either, or both which will tend to influence the retail gasoline market (over time) to lower prices or less steep increases or both. (that’s without even mentioning the coming rise in domestic supply of crude)