Americans Will Burn Less Oil 25 Years From Now

The most lasting change in the U.S. energy landscape may not be that we’re producing more oil — but that we’re using less.

Demand for oil has fallen in recent years, as Americans drive less and buy more fuel-efficient cars. Daily consumption is down nearly 2 million barrels since 2005, a 9 percent decline. The drop is small in percentage terms, but it represents a remarkable shift, one that few people saw coming.

For most of the post-World War II era, Americans burned more oil each year, a trend broken only briefly by the price shocks of the late 1970s. This time, the shift appears to be more lasting: In a new report released this week, the Energy Information Administration (EIA) said the U.S. will burn slightly less oil in 2040 than it did in 2010. Overall energy consumption per person is set to fall even more steeply, to the lowest level since 1965.

Long-range forecasts are inherently uncertain, especially for commodities like energy that depend on so many variables — prices, demographics, technology and, crucially, overall economic growth. The EIA hedges against that uncertainty by publishing a range of projections based on different scenarios that assume varying levels of economic growth, regulation and driving behavior, to name a few factors. But when it comes to oil demand, the various projections turn out to be relatively consistent.¹ Even in the case of the highest demand growth, the U.S. would burn only a million more barrels of oil per day in 2040, an 0.3 percent annual rate of increase.

Moreover, under every single scenario, the EIA expects American drivers to burn less gasoline in 2040 than they do today. There are two major factors driving the decline in gasoline demand: Americans are driving more fuel-efficient cars, and they’re driving them less.

The fuel efficiency piece is pretty straightforward. The average car on the road today gets nearly 22 miles per gallon, and the average new car gets more than 30 miles per gallon. As older cars get replaced, and as new cars improve, the overall fleet will get more efficient. In 2040, the EIA estimates, the average car will get 37 miles to the gallon; new cars will get 47 due in part to stricter environmental standards.²

The more surprising change is in Americans’ driving habits. For decades, Americans drove more miles each year — even the ’70s oil shocks did little more than slow the rate of growth for a few years. But “vehicle miles traveled,” a measure of total driving, fell in the latest recession and has been roughly flat ever since. On a per capita basis, driving has fallen steadily since 2005 and is now at its lowest level since the mid-1990s.

The slowdown in driving is partly a reflection of the lackluster economic recovery. People tend to drive less during recessions, both to save money and because people without jobs don’t need to drive to work. But the economy alone can’t explain the recent pattern in driving, the EIA says.

“Before the 2007 peak, travel behavior in the United States tracked closely with economic growth,” the agency notes in a report on the issue. “Since 2007, trends in U.S. [driving] have not followed the trends in economic indicators such as income and employment as closely.”

Demographics are also a factor. The aging of the baby boom generation means that more Americans are entering their retirement years, when they tend to drive less.³ At the same time, young people are driving less, likely due to the rise of telecommuting and online shopping and, to some degree, the increasing popularity of urban living.

This mix of factors makes the long-term future of American driving hard to predict. Under one EIA scenario, driving rebounds, with total vehicle miles traveled rising 1.1 percent per year in coming decades. Under another scenario, driving hardly picks up at all, and falls on a per capita basis. But because of the gains in fuel efficiency, total gasoline consumption falls under either scenario.

And yet oil will maintain its dominance. The EIA forecasts only a modest role for renewable energy in its baseline scenario. Even under alternative scenarios in which Congress imposes a tax on carbon emissions, renewables do little to offset oil demand, although they play a larger role in electricity generation. The EIA does see some role for natural gas as a transportation fuel, mostly in trains and heavy-duty trucks, but estimates it will account for only 3 percent of total transportation energy consumption in 2040. Nonetheless, decreased demand for oil will have significant environmental benefits. The EIA sees per capita carbon emissions declining 12.5 percent by 2040.

The decline in U.S. oil demand has gotten relatively little attention in recent years, in part because of the far more rapid increase in domestic oil production. That boom has indeed been remarkable. In a mere five years, the U.S. has reversed nearly three decades of production declines — declines virtually all energy experts considered permanent just a few years ago. The EIA now says production will near its all-time peak within the next few years and may even exceed it.

But the oil boom’s longer-term prospects are far from certain. The EIA expects production to level off after 2016 and to begin to fall after 2020. In the short-term, production rises under all of the EIA’s main scenarios, but from there the projections diverge sharply. Under the most optimistic projection, daily oil production rises by 1.8 million barrels from 2020 to 2040; under the most pessimistic, it falls by 2.2 million barrels.

Even if the oil production boom continues, the plateauing of demand may prove just as significant, if not more so, simply because in a global context U.S. demand matters more than its supply. Americans use 20 percent of the world’s oil and produce just 12 percent of it; even under the most optimistic production scenarios, the U.S. won’t account for more than 16 percent of global oil production in coming decades. Unless the U.S. cuts back its share of consumption, it will remain reliant on foreign sources of oil — sources that are looking both more uncertain and more expensive as the age of “easy oil” comes to a close.

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15 Comments on "Americans Will Burn Less Oil 25 Years From Now"

jedrider on Fri, 9th May 2014 6:24 pm 



Give this guy an award for an accurate prediction!

Plantagenet on Fri, 9th May 2014 7:05 pm 



The claim that no one foresaw the drop in US oil consumption is absurd. People in the peak oil community have been predicting higher oil prices resulting in lower oil consumption for decades.

Newfie on Fri, 9th May 2014 7:05 pm 



LOL!

peterjames on Fri, 9th May 2014 7:24 pm 



Is the article in around about way saying, gas prices are high, people are using less, and it is screwing the economy?

Dave Thompson on Fri, 9th May 2014 7:25 pm 



Lower demand and demand destruction are being used in the lexicon more and more. Not being able to afford something does not mean the consumer does not want it.

Makati1 on Fri, 9th May 2014 7:26 pm 



“Americans Will Burn Less Oil 25 Years From Now”

That is a safe prediction. They will be lucky if they can afford ANY oil in 25 or even 10 years.

paulo1 on Fri, 9th May 2014 7:34 pm 



re: “Americans Will Burn Less Oil 25 Years From Now”

No shit, Sherlock.

Beery on Fri, 9th May 2014 7:44 pm 



Another “Peak Demand” article. This is the latest excuse cornucopians use when faced with the reality of peak oil. Essentially, the argument goes something like this:

“Peak Oil Theory is wrong because, although it looks lie a peak, the reality is that we’re all just bored with using oil.”

Yeah, right. And when people catch pneumonia, they’re just bored with feeling healthy and they want to try running a high temperature, feeling like crap and staying in bed for weeks.

GregT on Fri, 9th May 2014 7:54 pm 



The vast majority of human beings, not just Americans ( there are other people on the planet) in all likelihood, won’t be burning any oil at all by 2039. They probably won’t be eating much food either, those that make it through the bottleneck.

Perk Earl on Fri, 9th May 2014 8:48 pm 



It would be fun to do an experiment by releasing a large portion of the SPR to be refined and sold at $1.50 a gallon. Would the peak demand crowd stand by their claim demand would not increase? LOL.

GregT on Fri, 9th May 2014 11:39 pm 



Ya Perk,

Just like yeast in a Petri disk, intelligent yeast.

Norm on Sat, 10th May 2014 1:30 am 



….what Beery said.

jimmy on Sat, 10th May 2014 2:57 am 



oh they’ll be burnng a lot less oil alright; but their not gonna like it.

jimmy on Sat, 10th May 2014 2:58 am 



Maybe you can render Rush Limbaugh down and make candles?

Kenz300 on Sun, 11th May 2014 7:30 am 



Buy a bicycle, walk more or take mass transit…….

Your use of oil for transportation purposes will drop substantially.

Why do RepubliCONS hate mass transit and bicycle trails, and walkable cities…….. maybe because they are funded by the fossil fuel industry.