Tuesday, December 21, 2010

US Gas Demand Should Fall For Good After '06 Peak

Yet no one questions how Ohio will pay an average of $471 million PER YEAR in extra highway M&O costs over the next decade. Ohio keeps adding more highway infrastructure to maintain while gas tax revenues fall and Ohio fails to respond to this greatest change in transportation needs in decades....
 
US Gas Demand Should Fall For Good After '06 Peak
Cars More Fuel-Efficient, People Driving Less
 
UPDATED: 6:12 am PST December 21, 2010


....The decline is expected to accelerate for several reasons.
 
- Starting with the 2012 model year, cars will have to hit a higher fuel economy target for the first time since 1990. Each carmaker's fleet must average 30.1 mpg, up from 27.5. By the 2016 model year, that number must rise to 35.5 mpg. And, starting next year, SUVs and minivans, once classified as trucks, will count toward passenger vehicle targets.
 
- The auto industry is introducing cars that run partially or entirely on electricity, and the federal government is providing billions of dollars in subsidies to increase production and spur sales.
 
- By 2022, the country's fuel mix must include 36 billion gallons of ethanol and other biofuels, up from 14 billion gallons in 2011. Put another way, biofuels will account for roughly one of every four gallons sold at the pump.
 
- Gasoline prices are forecast to stay high as developing economies in Asia and the Middle East use more oil.
 
There are demographic factors at work, too. Baby boomers will drive less as they age. The surge of women entering the work force and commuting in recent decades has leveled off. And the era of Americans commuting ever farther distances appears to be over. One measure of this, vehicle miles traveled per licensed driver, began to flatten in the middle of the last decade after years of sharp growth.
 
"People wildly underestimate the effect that all this is going to have" on gasoline demand, says Paul Sankey, an analyst at Deutsche Bank. Sankey predicts by 2030 America will use just 5.4 million barrels a day, the same as in 1969. Aaron Brady, an analyst at CERA, predicts a more modest drop, to 6.6 million barrels a day.
 
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Ken Prendergast
Executive Director
All Aboard Ohio
12029 Clifton Blvd., Suite 505
Cleveland, OH 44107
(216) 288-4883
kenprendergast@allaboardohio.org
www.allaboardohio.org