Plunging U.S. gasoline consumption

This is really interesting and significant. My first reaction was that it might have to do with the fact that the older gas guzzlers are disappearing but it is shown here how that only accounts for about 6 percent of an amazing decrease in gasoline deliveries in the U.S.

http://www.zerohedge.com/news/guest-post-why-gasoline-consumption-tanking?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+zerohedge%2Ffeed+%28zero+hedge+-+on+a+long+enough+timeline%2C+the+survival+rate+for+everyone+drops+to+zero%29

Let's start with some simple minded factors:

If you don't have a job, you don't have a commute.

If money is tight, you don't take pleasure trips

If money is tight, your teenager doesn't get a car, and takes the bus. In fact, some people have become "one car" families altogether. Some are probably even doing things "on foot" ....like in the olden days.

Then, for those who are still doing okay, if not in the 1%, the "image factor" of the big SUV has tanked. They're happy to get rid of those gas guzzlers and buy something more fuel efficient to go to work or the supermarket.

There are probably a few other reasons why less gas is consumed. If you are utterly homeless, you don't have to drive anywhere much, but it works for shelter better than a cardboard box.

I only account for one person, so what we do doesn't affect the gasoline consumption at all. In fact we are doing our damnedest to get the consumption up. I don't drive since my injuries, so we have one vehicle, which my wife drives to work and all our errands. It is a Chevy Avalanche. Since we've had it, we have averaged 15 mpg. My wife drives to work about 40 miles one way. We pay probably $320.00 a month in gasoline for her to go to work.

With going to Trader Joes (25 miles one way), Sprouts (about 20 miles one way) and the regular grocery stores in our town and doctor appointments and lab work which seem to be a constant for us, you can add another $160.00 to our outflow. I envy those who are able to cut back and have. We don't take pleasure trips anymore, plus we saw all of our state when we lived here before.

The "image" of the SUV has not tanked where we live. There are more Avalanches than any other single vehicle that I've seen. They are everywhere. We even had someone place a note on ours asking to call him because he wanted to buy it. It's crazy, here. The traffic is a nightmare with too many cars on too few highways. I know consumption is down and for the most part I think Gringal hit the nail on the head, except for my wife and I and where we live.

I think that Gringal's post reflects the conclusion of the article with the exception that improving efficiency of the fleet as a whole (and that includes downsizing from gas guzzlers) only accounted for 6 percent of the drop.

The main point being made here IMO is that the "recovery" and "improving employment" is a crock. There is no recovery and as I previously posted, there is no "improving employment" either. There is a bunch of BS from the government trying to pretend that the economy is getting better when it isn't.

BTW, other reports show that income tax collections are declining, not increasing. This makes sense when you understand that most of the jobs figures are for part time jobs and that they deliberately omit the millions who have given up looking for work.

And those same people are using a lot less gas. Pretty logical, eh?

While MC's article could explain the following from WSJ:
"U.S. exports of gasoline, diesel and other oil-based fuels are soaring, putting the nation on track to be a net exporter of petroleum products in 2011 for the first time in 62 years."
I don't get why they are projecting the price of gas will rise approximately 25% in the coming 2 to 3 months.

Not that there is any manipulation going on but are they going to now say that we are using less, so they have to charge more?

It's an over consolidated, uncompetitive industry. What mainly drives the prices, however, is the price of crude which is largely determiined by government cartels like OPEC.

It sounds like the reduced domestic consumption is being sold back out of country. Correct me if I'm wrong, but I believe much of Pemex's gasoline is refined in the U.S. I wonder where the other places are that this is going? Canada maybe? I don't see how it could be economic to ship crude to the U.S., refine it and then ship it a long distance back overseas but I don't claim to understand the economics of the petroleum industry.

Now you know why I got rid of my RV. It got to the point where it cost nearly $600 to drive the thing RT between the Rio Grande Valley and Dallas Texas.

That's one business I'd hate to be in............selling RV's

There was a time before we escaped to Mexico that you could drop $150K and up on one of those babies. What was really a joy was getting behind one of them on the long, winding, one lane each direction road on the California coast in Big Sur, where the drop down to the rocks was long and had no turnoffs. You could see the raw panic on the driver's face if one was coming the other way. "Geez, Myrtle, this was supposed to be FUN!". LOL

My wife drove one of ours on the Million Dollar Highway in Colorado. Parts of that make the Big Sur road look like a cake walk.

We drove our Country Coach on that road too. Loved it! Really, our best RV trip ever was the CA, OR and WA coasts and then inland to ID.

Really miss it, actually.

"It sounds like the reduced domestic consumption is being sold back out of country. Correct me if I'm wrong, but I believe much of Pemex's gasoline is refined in the U.S. I wonder where the other places are that this is going? Canada maybe? I don't see how it could be economic to ship crude to the U.S., refine it and then ship it a long distance back overseas but I don't claim to understand the economics of the petroleum industry."

I believe that you are correct about the Pemex gasoline. As for what the US is exporting, I am guessing that most of the product starts from domestic crude production rather than the imported crude. Even though all petroleum products have their individual DNA's, it probably is just a shell game as to where refined product goes.

Mainecoons wrote: . Correct me if I'm wrong, but I believe much of Pemex's gasoline is refined in the U.S. I wonder where the other places are that this is going? Canada maybe? I don't see how it could be economic to ship crude to the U.S., refine it and then ship it a long distance back overseas but I don't claim to understand the economics of the petroleum industry.

Pemex invested with Shell in a refinery in Texas. It was cheaper to buy into that refinery than to build one in Mexico. I am not sure what you mean by "ship it a long distance back overseas". Mexico is just a hop, skip and a short sail through the Gulf from Houston.


"U.S. refineries are selling for less than the cost of building a new one after prices of such assets fell 80 percent from what they fetched in 2006, according to Dahlman Rose & Co."

FYI, Canada is totally self sufficient energy wise. We do not import oil because we don't need to. We do export it.

ferret wrote:FYI, Canada is totally self sufficient energy wise. We do not import oil because we don't need to. We do export it.

They do use a loy of hay, however, to get to the general store and feed the goats on the back 40 used pork & bean cans after the daily family feast. They have found that dried cow patties heat the igloos quite sufficiently. After all, Canadians break into a sweat at 12 degrees celcius.

Dried cow patties do heat nicely...better than hot air. :)

hound dog wrote:

ferret wrote:FYI, Canada is totally self sufficient energy wise. We do not import oil because we don't need to. We do export it.

They do use a loy of hay, however, to get to the general store and feed the goats on the back 40 used pork & bean cans after the daily family feast. They have found that dried cow patties heat the igloos quite sufficiently. After all, Canadians break into a sweat at 12 degrees celcius.

Well if burning BS is the way of the future, you Yanks will be just fine......

Ferret person. All oil in Canada east of the Manitoba/Ontario border is imported from overseas and refined in eastern Canada. Yes, there is an east west Canadian pipeline. Currently who knows what the F*K is up with that. Used to supply the refinery in Sarnia, Ont. Western Canadian oil and gas production is totally locked into the US market through an extensive pipeline distribution system. Apparently, we're trying to diversify by shipping to Asia (read China), mainly cause Obama stiffed us on the Keystone pipeline project (he'll never win Kansas). So, we can import foreign oil from way overseas, refine it in eastern refineries, and sell gas at the pumps cheaper than in western Canada. The bottom line is, it's not about the feedstock, it's about the refineries. Everybody (read Yanks) gets there shorts in a not about Hugo Chavez and Venezuelan oil. He'll be dead soon. But here's the deal. He pumps Venezuelan oil, (after stiffing all those oil multinationals), ships it to the US, and China, refines it in Venezuelan refineries in the US (that's the crunch), and sells it through what are basically Venezuelan gas stations. He then takes those profits, props up his regime, ships off oil products to Cuba at pennies on the dollar and thumbs his nose at the US and other nations. Ya gotta love it. Just watch this saga unfold.

Update on the origiinal with a more in depth analysis. Conclusion is the same.

http://globaleconomicanalysis.blogspot.com/2012/02/petroleum-3-month-rolling-average-turns.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+MishsGlobalEconomicTrendAnalysis+%28Mish%27s+Global+Economic+Trend+Analysis%29

Wallace writes "Gasoline and petroleum demand recently has plunged more than at any time in the recession. When you see petroleum usage back to numbers in the 1990's, you know there is serious economic trouble no matter what the talking heads say."

Also in this analysis is a discussion of shipping rates which are plunging despite high diesel prices.

Rather, the huge dropoff in gasoline and petroleum usage in the US, coupled with falling shipping rates, a drop in Japanese Exports Three Consecutive Months, and a European Recession poised to get much worse, makes a strong case that a collapse in global trade is underway.

Obama and the thoroughly dishonest and incompetent U.S. government and media aren't going to be able to lie their way out of this one.

Oh, and BTW, the Greek deal is imploding too. It was never more than a sham.

ferret wrote:FYI, Canada is totally self sufficient energy wise. We do not import oil because we don't need to. We do export it.

Mexico doesn't import oil, it imports gasoline.

David wrote:

ferret wrote:FYI, Canada is totally self sufficient energy wise. We do not import oil because we don't need to. We do export it.

Mexico doesn't import oil, it imports gasoline.

And the gasoline is refined from its own oil.

borderreiver wrote:Ferret person. All oil in Canada east of the Manitoba/Ontario border is imported from overseas and refined in eastern Canada. Yes, there is an east west Canadian pipeline. Currently who knows what the F*K is up with that. Used to supply the refinery in Sarnia, Ont. Western Canadian oil and gas production is totally locked into the US market through an extensive pipeline distribution system. Apparently, we're trying to diversify by shipping to Asia (read China), mainly cause Obama stiffed us on the Keystone pipeline project (he'll never win Kansas). So, we can import foreign oil from way overseas, refine it in eastern refineries, and sell gas at the pumps cheaper than in western Canada. The bottom line is, it's not about the feedstock, it's about the refineries. Everybody (read Yanks) gets there shorts in a not about Hugo Chavez and Venezuelan oil. He'll be dead soon. But here's the deal. He pumps Venezuelan oil, (after stiffing all those oil multinationals), ships it to the US, and China, refines it in Venezuelan refineries in the US (that's the crunch), and sells it through what are basically Venezuelan gas stations. He then takes those profits, props up his regime, ships off oil products to Cuba at pennies on the dollar and thumbs his nose at the US and other nations. Ya gotta love it. Just watch this saga unfold.

Thank you for the clarification. I should have said that Canada is a NET exporter...we export more than we import.
From this website: http://www.nrcan.gc.ca/energy/sources/crude/1287

"Canada is both an importer and exporter of crude oil and refined petroleum products. In effect, Canada is a net exporter of crude oil.

We currently produce about 2.5 million barrels of oil per day and consume about 1.85 million barrels per day. Overall, Canada imports about 930,000 barrels per day and exports about 1.63 million barrels per day"

Can you tell me why a pipeline west to east couldn't just go to the top of Lake Superior and then get tanked down through the great lakes to the eastern refineries? I would be interested in your opinion.

borderreiver wrote:Ferret person. All oil in Canada east of the Manitoba/Ontario border is imported from overseas and refined in eastern Canada. Yes, there is an east west Canadian pipeline. Currently who knows what the F*K is up with that. Used to supply the refinery in Sarnia, Ont. Western Canadian oil and gas production is totally locked into the US market through an extensive pipeline distribution system. Apparently, we're trying to diversify by shipping to Asia (read China), mainly cause Obama stiffed us on the Keystone pipeline project (he'll never win Kansas). So, we can import foreign oil from way overseas, refine it in eastern refineries, and sell gas at the pumps cheaper than in western Canada. The bottom line is, it's not about the feedstock, it's about the refineries. Everybody (read Yanks) gets there shorts in a not about Hugo Chavez and Venezuelan oil. He'll be dead soon. But here's the deal. He pumps Venezuelan oil, (after stiffing all those oil multinationals), ships it to the US, and China, refines it in Venezuelan refineries in the US (that's the crunch), and sells it through what are basically Venezuelan gas stations. He then takes those profits, props up his regime, ships off oil products to Cuba at pennies on the dollar and thumbs his nose at the US and other nations. Ya gotta love it. Just watch this saga unfold.

The funny part about Venezuelan oil company in New England is they supply low cost or free fuel oil for people in need. What a PR coup!! Yep when you shop in the
US at Citgo stations you are helping Chavez and the other leftist countries. It really is a scream and in spite of all the bad language between the US and Venezuela
they do need each other but they sure don't want each other:-)

Z

An interesting article from EL UNIVERSAL discusses the Pemex position related to exports to the US along with Canada and Saudi Arabia:
http://translate.google.com/translate?hl=en&sl=auto&tl=en&u=http%3A%2F%2Fwww.eluniversal.com.mx%2Fnotas%2F829630.html

[b]"The average price for a gallon of gasoline in the United States rose nearly 12 cents in the past three weeks to about $3.51, due in part to higher prices for North Sea crude oil, according to the nationwide Lundberg Survey.

The national average for a gallon of regular gasoline rose 11.57 cents to $3.5101 as of February 10, the survey of about 2,500 gasoline stations in the continental United States found.

That was a greater change than the 3.5-cent rise in the previous survey, which covered the two weeks that ended January 20..........

http://www.msnbc.msn.com/id/46360396/ns/business-oil_and_energy/#.Tzh5x2VdmqE

This is an interesting article which in simple terms discusses the current gasoline "crisis" we are and have been having:

http://ppjg.me/2012/02/12/dependence-on-foreign-oil-and-other-oil-industry-hoaxes-and-scams/