US gasoline demand declines after 2006 peak – ‘U.S. motorist is no longer the king of the road’
NEW YORK, 21 December 2010 (AP) — The world’s biggest gas-guzzling nation has limits after all. After seven decades of mostly uninterrupted growth, U.S. gasoline demand is at the start of a long-term decline. By 2030, Americans will burn at least 20 percent less gasoline than today, experts say, even as millions of more cars clog the roads. The country’s thirst for gasoline is shrinking as cars and trucks become more fuel-efficient, the government mandates the use of more ethanol and people drive less. “A combination of demographic change and policy change means the heady days of gasoline growing in the U.S. are over,” says Daniel Yergin, chairman of IHS Cambridge Energy Research Associates and author of a Pulitzer Prize-winning history of the oil industry. This isn’t the first time in U.S. history that gasoline demand has fallen, at least temporarily. Drivers typically cut back during recessions, then hit the road again when the economy picks up. Indeed, the Great Recession was the chief reason demand fell sharply in 2008. But this time looks different. Government and industry officials — including the CEO of Exxon Mobil — say U.S. gasoline demand has peaked for good. It has declined four years in a row and will not reach the 2006 level again, even when the economy fully recovers. … The decline is expected to accelerate for several reasons. … — Gasoline prices are forecast to stay high as developing economies in Asia and the Middle East use more oil. … Environmentalists are looking at the trend with a mixture of disbelief and delight. A decade ago they thought demand would continue to grow 1-2 percent a year far into the future. “Now you look and, wow, we’ve actually bent the curve,” says Roland Hwang, transportation director at the Natural Resources Defense Council. … While America’s diminishing demand will temper global demand, it will be more than offset by rapidly growing demand in China, India, the Middle East and Africa. As a result, declining U.S. gasoline demand will not bring lower pump prices. Worldwide oil demand will hit a record 88.3 million barrels per day next year, according to the consulting firm Wood Mackenzie. Put simply, “we’re entering a period where the U.S. motorist is no longer the king of the road,” Yergin says.
