U.S. Retools Economy, Curbing Thirst for Oil

The U.S. economy is starting to figure out how to curb its legendary appetite for energy.

Consumers are buying fewer sport-utility vehicles and more energy-saving washing machines. Some trucking companies have rejiggered their engines to max out at lower speeds. Gridlock is easing in California. Americans drove 9.66 billion fewer miles in May than they did a year earlier, a 3.7% decline, according to the Transportation Department.


With shipping costs surging, companies are rethinking overseas production, slimming down packaging and retooling distribution networks. Yogurt maker Stonyfield Farm is only sending out fully loaded delivery trucks. Procter & Gamble Co. is filling smaller bottles with more-powerful laundry detergent. Locally made products, from beets to beer, are becoming a more attractive choice.

“Four-dollar gas is the best marketing tool I have,” says Betsy Kachmar, assistant general manager of Fort Wayne Public Transportation Corp. in Indiana. Bus ridership in that city was up 16% in the first half of this year, compared with the year-ago period. Mass-transit ridership nationwide rose 3.4% in the first quarter, according to the American Public Transportation Association.

Hard evidence is emerging that the changing behavior of consumers and businesses may be making a dent in the oil market. The Energy Department reported last week that demand for gasoline for the four weeks ended Aug. 1 was 2.3% lower than in the same period last year. Declining demand is the prime force behind the oil market’s recent slide. Crude oil closed Monday at $114.45 a barrel in New York trading, the lowest since May 1. Crude oil has fallen 21% from its July peak of $145.29.

Wall St. Journal