Friday, February 10, 2012

California Gasoline Consumption

There are a lot of posts out on the Web about gasoline consumption in Q4, 2011. The data from the Government regarding Vehicle Miles Traveled, and California's gasoline tax receipts are probably better, more accurate, and more truthful.

Quarterly Peak Consumption was Q3 2005 - 4,067,963,214.  Q3 2011 gasoline consumption - 3,727,070,122, which was slightly lower than the 2009 Q3 in the midst of the Great Recession.

2005 was the peak year - 15,937,855,020. 2011 consumption will certainly come in lower than 2010's  consumption of 14,868,892,787.

Keep in mind that U.S. gasoline "supply" increased by nearly 10% with the development of corn ethanol.  Said another way, absent ethanol, the supply/consumption of gasoline decline would have been closer to (just under) 4% than (just under) 2%. But ethanol was a one off... there is no 880,000 bpd increase in ethanol available to the market over the next 6 or 7 years as there was in the previous 6 or 7. That does not assure an increase in the decline rate... but it certainly increases the likelihood.

If Peak Oil has not hit the world, it sure seems to have hit California's gasoline supply... and California is home to 1 out of every 8 Americans... likely a large enough sampling to be applied to the U.S. as a whole.

This is not the only thing wrong with the U.S. (and the other industrialized nations) economy... but its a biggee.


westexas said...

(This touches on both of the top two posts.)

I am frequently reminded of one of Jay Hanson’s interviews from years ago, in which he noted that the real problem with a post-Peak Oil environment is how do you control men when there is no job growth?

Regarding our current economy, it is clear that, to quote Dickens, "It was the best of times, it was the worst of times."

It's really the best of times for US oil producers--flat global crude oil production, declining Global Net Exports (GNE), with Chindia consuming an increasing share of a declining volume of GNE, all leading to high global crude oil prices--while US producers are able to show increasing crude oil production. But it was the worst of times for US consumers, as global crude oil prices doubled in six years.

By the way, I have frequently posted a link to what is, in my opinion, a brilliant essay by Kurt Cobb that shows the entire economy being supported by the food & energy producers:
Upside Down Economics

The problem I foresee is that if food & energy (especially oil) producers are the only healthy portions of the US economy, what happens as consumers become increasingly angry at rising food & energy prices, especially oil prices, as they compare rising gasoline prices to the promises from the oil industry that we don't have to worry about supply problems for decades to come?

If the "Haves" are increasing defined as the net food & energy producers and the "Have-nots" are increasingly defined as the net food & energy consumers, what happens to society in future years?

The alleged comment by Marie Antoinette to "Let them (hungry French people) eat cake," didn't end so well for her.

However, I am most concerned about young people who are graduating from college, frequently with heavy debt loads, with degrees very poorly prepare them for a post-Peak Oil economy.

In my opinion, we need to advocate for reinvigorated vocational and agricultural training in US high schools and community colleges. I have frequently noted the fact that in Swiss high schools 70% of students are on the vocational track, and all of the vocational students graduate with job skills

Stephen B. said...


Regarding college, instead what we see are schools all over, closing down vocational programs. Indeed we see states and the federal government pushing college and community college education like never before. I think just this morning I saw some Obama headline saying something about $8 billion for more community college something or other.

In MA, schools are closing their vocational programs left and right because our state education competency testing program, the so-called MCAS (Massachusetts Comprehensive Assessment System) doesn't test any of that and doesn't reward school systems that produce students with vocational competency, thus, the educational $$ go to other things.

It really is a classic case of society really lagging in its response and understanding of rapidly changing social, economic, and ecological situations.

I see it even in my agency. We do talk up some of our vocational, agricultural, and shop programs with development prospects, but our few shop teachers get redeployed to academic classrooms to support those teachers because we won't/can't pay enough there. Then we lose what few vocational teachers we have because they spend half their time in somebody else's classroom.

We have one program with an auto shop, but haven't had an auto shop teacher in a year because we drove the last one crazy with non-vocational work.

Now, perhaps it is true that we won't need so many auto mechanics in the future, at least for gas engines, but I think we can agree that learning the way cars work, or how electrical outlets are wired, gives students a better mechanical understanding of our world that may be very valuable in the coming years as the office cubicle jobs dry up some. Even if the students take the mechanical aptitude they gained and use it on something else (such as fixing their back yard greenhouse, etc.) I'm sure they, and everybody, would be better off than if we trained yet more sociologists.

Manish Kumar said...
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Anonymous said...

The great flood of money in the form of 0 and 1's is coming from the vault of central banks guys. Japan, Europe and the fed are kicking that can again, one time that can is going to kick back. I think the whole thing might go Kaput before peak is even noticed, though if these delivery charts are correct it might just be the shadow cause.

Jeffers do you think this is bullish for gold/silver? I think we might get another 10% bump, but with so much paper gold they might be able to hold the price down.


Greg T. Jeffers said...


I am back in the Neutral camp in the Deflation/Inflation argument... I have been a deflationista for years and years... but it would appear to me that there may never again (in my lifetime, but I am older than you) where the Fed and the other Central banks will ever tighten monetary policy... if that is true, then gold, silver, homesteads, livestock, timber are to be owned.

I am still own all the bullion I ever bought, but I am not long paper and have not been for some time... really thought SIlver was on its way under $20 on that last trip down, but it bottomed at $26 and I did not get long...