June 30, 2008
US Oil Consumption Falls Back To 2002 Level

For most of the post-WWII era US oil consumption went up year after year. One deviation from that came in the early 1980s. An even longer lasting and probably permanent deviation from that trend is developing. Americans have traveled back in a sort of time machine to 2002 levels of oil usage.

The U.S. Energy Information Administration revised downward U.S. April oil demand by 863,000 barrels per day (bpd) to 19.77 million bpd -- 3.9 percent below year-ago levels. The revision, which showed April demand was the lowest for the month since April 2002, came even before gasoline prices surged to new records in June.

But on a per capita basis the reduction in oil usage is even larger since the US population grows about 1% per year. So has US oil usage per capita gone down 10% since 2002? Can someone check me on this?

Back in 1959 the United States used about 6 million barrels of oil per day. The US had a population of about 150.5 million in 1950 versus about 304.4 million at the time of this writing. Okay, with 2 times more people we would use almost 12 million barrels a day if we used oil at the same rate as in 1950. But we use about 20 million barrels a day. So once prices go high enough to cut US demand by 8 million barrels a day we will have traveled back in time to 1950 in terms of oil usage.

A 1950 level of oil usage will be easier in the future than it was in 1950 because we have much more efficient cars and other higher efficiency equipment. Plus, we have nuclear power plants, wind turbines, and other sources of non-fossil fuels energy. As we hit each point of our future journey into our oil consumption past we will make other gains in technology for fossil fuel replacements. Now, I do not expect those advances to come fast enough to prevent a decline in total per capita energy usage. But those other energy sources will at least allow us to maintain an industrial society.

Update: In the comments Donkatsu explains how far off our peak per capita oil consumption we've already fallen:

The data tell the story, from 1998, oil use per capita in the US has risen steadily from 25.06 barrels per person to a recent peak of 25.9 bbl/capita in 2004. In 2005 per capita consumption fell by about 0.6%, falling further for the full years 2006 and 2007 to 97% of the 2004 peak. The 2008 levels, if maintained for the entire year, would put per capita oil consumption at about 91.6% of the 2004 peak.

If you find yourself driving less, driving a smaller car, flying less, and otherwise using less energy since 2004 it is not surprising.

Update II: Vehicle traffic is down on New York City bridges and tunnels.

In May, with gasoline at more than $4 a gallon, traffic at the Metropolitan Transportation Authority’s bridges and tunnels dropped 4.7 percent compared with the same month the previous year.

Preliminary data for June shows a similar decrease in traffic, and officials say the change is largely because of higher prices at the pump.

But public transit ridership is up.

Weekday subway ridership was up 6.5 percent in April, compared with the same month a year ago. April ridership increased 5.5 percent on the Long Island Rail Road, 4.3 percent on the Metro-North Railroad and almost 9 percent on PATH trains between Manhattan and New Jersey. Use of the subways and rail lines also increased in May, compared with the previous year, but in most cases by smaller amounts. New Jersey Transit ridership, including bus, commuter rail and light rail, was up about 4.6 percent in April and May combined.

When gasoline hits $6 per gallon the trains and buses will be full.

Share |      Randall Parker, 2008 June 30 11:02 PM  Energy Fossil Fuels


Comments
Tushar said at July 1, 2008 7:10 AM:

If consumption is same as 2002, and population is 6% higher (1% growth per year), per capita consumption has gone down by roughly 5.6 percent.

(1 - 100/106) * 100 = 5.6%


justreadingglenn said at July 1, 2008 7:30 AM:

Instapundit links to this article suggesting that "pricing signals work." What a remarkably glib comment to make.

I don't need anyone giving me "pricing signals" as if I'm supposed to "take the hint" and "not drive." I have to feed my family, thank you.

Not everybody gets paid handsomely by Amazon to sit on their ass at a cushy law school and get paid to make pithy links to other people's content and take pictures of the local girls as they walk by his latte stand. Would that us mere proles could garner such a gig.

These "pricing signals" mean that poor people's lives are now signicantly worse off, as they have now been priced out of the individual transportation market. They can no longer get their kids to daycare so that they can then get to their job in the city from the suburbs. This will force them back into inner city ghettos and into the slavery of government transportation government housing and government subsidized crime.

This is certainly not something we should be celebrating as some sort of signal success ... and this is certainly something that our politicians had better get up off their asses and solve now, or they are in for a rude awakening.

I, for one, will not vote for a single incumbent who got us into this goddamned mess.

AlsoReadingGlenn said at July 1, 2008 7:42 AM:

Owww. 'Justreadingglenn' needs his diaper changed.
I don't think anyone handed Glenn Reynolds his cushy number (either his law professorship or his Instapundit gig). I think he got off his a** and did it from scratch. Would that JRG might do that. The price signals Mr. Reynold's is referring to may sound academic but they will probably push politicians, that useless breed, to support various paths to more available/more affordable energy. The politicians will do this precisely because they will be clamoring for the vote of JRG and others like him (and others less whiny and envious than him).

Tushar said at July 1, 2008 7:46 AM:

justreadingglenn,

read a book on economics, learn the meaning of "pricing signal", and think twice before ascribing motives to a simple comment by others.

The comment, "Pricing Signals work" means that demand goes down in response to price rise. How did you read any glibness into that simple citing of laws of economics?

Ben in Boston said at July 1, 2008 7:47 AM:

justreadingglenn:

Politicians most definitely did *not* get you into this mess. This is an economic problem pure and simple, though somewhat more complicated than it's usually portrayed as supply versus demand. Throwing out the incumbents (while a laudable goal) for this "offense" is like saying I'm going to cut off my hand because I got a bug bite.

I don't think Glenn would argue with you that poor people are harmed by the rise in prices. I think if you actually took the time to ask him rather than just spew flames, he would probably say that he was speaking from a strictly macroeconomic viewpoint. It's not ignoring the problem of the poor, it's just looking at the bigger picture.

The point is not that high gas prices don't hurt. The point is that people are ingenious and will find ways around the prices to get what they need done.

Mark B said at July 1, 2008 7:50 AM:

Hey justreadingglenn,
Chill. For the record, Instapundit is on record numerous times for advocating more oil, more coal, more nuclear, more wind, more solar, more anything to bring the cost of energy down. Believe me. I've been reading him for years and he understands that the poor are getting slammed hardest on this oil price rise. He's just saying that the laws of supply and demand are still in effect and we don't need the gov't to make us to conserve, thankyouverymuch.

People on the right know that bad economic circumstances hurt the poor first and worst. It's time to drill. It's time to build nuke plants. It's time to open ANWR and our coasts to drilling and oil shale and our clean coal reserves in Utah and...

tim maguire said at July 1, 2008 7:50 AM:

Glenn Reynolds has the gig he has because he earned it. If you want it too, go out and earn it. His point about pricing signals working is accurate and valid. No matter how angry it might make you that markets work, markets nevertheless work.

Shannon Love said at July 1, 2008 7:53 AM:

justreadingglenn,

Glenn Reynolds is refuting the idea popular on the left that people are mindless drones who will mindlessly consume unless the government holds a gun to their heads and tells them not to. Instead, the free market communicate to everyone by prices that the supply of oil is not keeping up with demand. People will consume less without threats from the government.

Not everybody gets paid handsomely by Amazon to sit on their ass...

Not everybody can write a blog that garners 150,000+ hits a day. If you could do that, while being a full time law professor, then Amazon, Popular Science etc would fall all over themselves to pay you as well. Everybody who actually knows all that Glenn Reynolds does is absolutely amazed that one human being can do it all and do it well. Unless he is a conspiracy of clones, he must be one of the hardest and smartest working persons in America. Sullen, childish, envy is an evil thing.

..and this is certainly something that our politicians had better get up off their asses and solve now..

No, its something they should have solved 10 years ago when it would do some good today. Oil doesn't fall from the sky. Don't you understand that oil has to be explored for, drilled for, pumped, transported, processed and then the processed products transported to where you need them? All that takes time. It takes years. To ensure oil supplies in 2013 or 2017 we need to start drilling today. Unfortunately, politicians in the late '90 thought that rich peoples concerns about their beach front property or some scruffy bit of tundra were more important than making sure that poor people could get to work 10 years in the future.

I don't know how old you are but regardless you need to grow the hell up.

Donkatsu said at July 1, 2008 8:37 AM:

The data tell the story, from 1998, oil use per capita in the US has risen steadily from 25.06 barrels per person to a recent peak of 25.9 bbl/capita in 2004. In 2005 per capita consumption fell by about 0.6%, falling further for the full years 2006 and 2007 to 97% of the 2004 peak. The 2008 levels, if maintained for the entire year, would put per capita oil consumption at about 91.6% of the 2004 peak.

MattE said at July 1, 2008 8:46 AM:

I'm going to jump in here and defend JRG. There is clearly a belief out there, primarily coming from the left, that high prices are a good thing because it will wean us off fossil fuels and into some sort of utopia. This may or may not be the position that Glenn holds, but that is what JRG is reacting to. Obviously the slam against Glenn was unnecessary, but the frustration is evident.

By the way, politicians DID get us in this mess and do need to ACT now. They can start, as MarkB said, by allowing oil drilling everywhere and by allowing nuclear/coal fired plants to be built. Repeating the old saw that this won't solve the immediate crisis, therefore don't do it, doesn't make sense today just like it didn't 10 years ago.

GMax said at July 1, 2008 9:24 AM:

Just so we are clear a bill passed both houses of Congress to permit drilling in ANWR over 10 years ago. It was vetoed by Bill Clinton and Democrats would not vote to override the President so it did not happen. Bills have been introduced regularly to allow drilling there but they have always been filibustered and not brought to a vote by Democrats. Yesterday Senate Majority Leader Harry Reid said "Coal is making us sick, oil is making us sick. We need to get off fossil fuels." To translate, to hell with anyone struggling with gasoline prices, you can just move to where there is a bus line or ride your bike. Or better yet live in a cave so that you have no carbon footprint. The Democrats are the ones you need to throw out of office if you are mad about the current situation. Whether they will overtly admit it or not, just like OPEC, Democrat officeholders like high prices for gasoline. There actions are consistently in the direction of discouraging domestic drilling and refining, so there is no reason to believe that the laws of supply and demand will be suspended just because the Democrat Party wants them to be.

anon said at July 1, 2008 9:34 AM:

Uh. In 1950 the US was much more liquid fuel efficient.

We were much more of a rail based economy, both for person transit (no Interstate highways) and intercity transit, where we had a strong network of trolley's.

We've been building a suburban, car and truck based economy for 50 years.

rsilvetz said at July 1, 2008 9:42 AM:

Unfortunately politicians DID get us into this mess. By reacting to environmentalist nonsense, a plethora of regulations, a .gov that made a deliberate decision to use Arab resources, the cushy fascist relationship of Big Oil and Big Gov, market distortion upon distortion upon distortion has added up to a global catastrophe. The price-signalling mechanism is now in full swing with massive dollar values beginning to move into the energy to be deployed against the development of new resources. The latter also putting an absolute ceiling upon what the Arabs can charge and forces them to pump oil.

Thankfully liberalization of the market is impending since it is the only way to get back to reasonable prices. Within 5 years we will again be awash in oil and energy. Please note the non-regulatory burdened time to build both a nuclear reactor and an oil refinery is 3 years. Watch as every jurisdiction worldwide suspends rules and regs... let the carnage of the enviromentalists begin!

Paul said at July 1, 2008 10:11 AM:

You may catch it somewhere in the news that we are in a recession which usually coincides with a relative decrease in energy use. Historically high energy prices are a signal of an expanding economy. More specific to real world would be when a factory lowers capacity, likewise, the energy needed is reduced. These reductions happen quite swiftly and are probably more a factor than consumer's (pissed off at Glenn or not)buying a smaller car or riding a bike to work.

dentin said at July 1, 2008 10:12 AM:

Honestly, I'm perfectly happy with the high prices we're seeing right now, and I'm glad that politicians delayed and dallied on previous drilling and resource extraction projects. Those fields that are currently restricted are not that large, and they would at best give us an extension of only a few years.

By delaying opening those fields, we have 1) helped raise the market price for energy in general, and 2) saved a cushion for ourselves during the coming transition time. Both of these are useful, because a higher market price means more research into alternatives, and saving a residual means we have a way to take the edge off things if something catastrophic happens to the market.

Of course poor families and people will be hit by the higher prices. That is unfortunate, but were it not oil, it would be some other crisis. Perhaps the most unfortunate part of it is that so many people choose to live their lives so close to the edge of their financial cliff, where even the smallest market hiccup may serve to push them over.

Trent Telenko said at July 1, 2008 10:20 AM:

FP,

Which census numbers are you using?

The 1960 census is 179 million.

The 132 million number is from the 1930 census.

Also, are you talking _1950_ or _1960_ rates of oil usaage.

justreadingglenn said at July 1, 2008 10:26 AM:

All,

If Glenn Reynolds believes that the market for gasoline in the United States is a "free market" then he needs to go back to his own school and take a class in Economics 101.

The market for gasoline in the United States is not free. It's run by a monopoly of refiners making windfall profits, an organized cartel of foreign suppliers who would just as soon kill us as sell oil to us, and heavily regulated by politicians who prohibit developers from exploiting the natural resources which are abundant in our own country, aiding and abetting the terrorists.

This isnt' a free market. And it never has been.

Politicians certainly got us into this mess by taxing us to death, regulating our environment to the point where nobody can do anything with their land, and prohibiting drilling. And politicians like Obama want to KEEP us in this mess. They LIKE people to be poor and dependent on the government.

Out with them all!

Readfuturefrompast said at July 1, 2008 11:43 AM:

Democrats have a long history of forcing Oil Companies away from America... And NOW we look at the Dem majority (aided by Eco-voter blocks) who failed to impact a comprehensive plan to restore Domestic oil & rebuild of post-Katrina/Rita refinery infrastructure; leaving Domestic production in a state of doubled disruption.

Normal disruptions due to need of new infrastructure from 2001 to 2005 were stabilized... In the days after the hurricanes; refiners were forced to briefly halt as many as five million barrels a day, of production...

After 2006 Dem win majority elections: Domestic energy stability and vision for future infrastructure upgrade, failed under Dem led Congress...
Today (08) due to old infrastructure, US spikes Mass barrels of loss per day. Democrats have, in fact, impacted a host of potentials ranging from spills, higher gas prices, and increased reliance on Foreign oil...

Don't carry this over to America's future... A Dem controlled future of alternative energy, would be another disaster; with corporate profits going to Government ear-marks, with nothing recycled back into maintenance and improvements to make cleaner technology!

Readfuturefrompast said at July 1, 2008 11:56 AM:

I thought I might also reflect that the articles on your site are excellent. And I thank Glenn Reynolds for directing me here.

John Kramer said at July 1, 2008 12:13 PM:

Why do we always frame this as a matter of environmentalists vs. business? It is just so hard for me to conceive of Big Oil (JRG's "suppliers," "refiners," and "developers" assuming they are indeed separate entities) are the victim of Environmental advocacy and lobbying or the evil scourge that is liberalism and neoliberalism (they are both bad as far as I am concerned). Far too much money is at stake to let them get in the way.

Why isn't conserving a matter of patriotism and love for our country? Or if you are less lofty and more likely to respond to negative incentive- why isn't cutting our gas usage framed as "sticking it" to the middle east? Because we would rather complain than actually do something that could make a difference. It is easier to complain about "windfall profits" and than it is to try to sacrifice and actually do something about it.

I actually disagree that poor families are getting "hit hardest." Poor people- and I mean the TRULY poor- have nothing now and thus have nothing to lose. It is the middle class that is getting hurt. They are the ones saddled with debt.


Rahein said at July 1, 2008 1:13 PM:

"Why do we always frame this as a matter of environmentalists vs. business?"

I agree, why isn't it framed as problem vs opportunity. The writing has been on the walls for years whether you look at peak oil or climate change. America has been a great innovator in the past, but we need to level the playing field and let people innovate. Businesses or individuals.

I think investing in comprehensive nationwide broadband and education would be a good place to start. Patent reform would be next.

Cindy said at July 1, 2008 1:58 PM:

If we have reduced our usage to 2002 levels, it is only a matter of time before the powers that be increase the tax per gallon because THEIR revenue is being hurt. Maybe that's when they will wake up. It they try it in the light of day I am going to sit back and enjoy the show.

rsilvetz said at July 1, 2008 1:59 PM:

It is impossible to conserve out of this crisis. We are twice as efficient as we were in 1975. The reality is there is no more big efficiencies to be garnered.

Josh Reiter said at July 1, 2008 2:52 PM:

justreadingglenn said at July 1, 2008 10:26 AM:
"The market for gasoline in the United States is not free. It's run by a monopoly of refiners making windfall profits..."

Oh, so all those investors in futures trading are only making imaginary money on oil commodities. They have nothing to do with the price of all at all. (/sarcasm)

crosspatch said at July 1, 2008 3:43 PM:

"But we use about 20 million barrels a day."

But we also use oil for things we didn't use it for in 1950. In 1950 when you bought a cut of meat, it was wrapped in paper. Now it is displayed on a plastic foam tray made from oil and wrapped in clear plastic also made from oil. Your clothing is probably made from oil if they are synthetic. Just the number of plastic disposable pens, lighters, and toys in McDonald's Happy Meals adds several barrels a day. I believe only about 1/3 of our oil consumption today is for fuel. It was probably a larger percentage of that back in 1950. Look at fuel consumption in kerosene, gasoline, jet fuel, etc. In other words, look at refining output if you want to check on per capita fuel consumption, don't look at crude oil consumption. We now use petrochemical fertilizers by the ton that we didn't have in 1950. Paints, pigments, dyes, plastics, fertilizers, fabrics, all sorts of things are made from oil these days.

Mike Puckett said at July 1, 2008 4:54 PM:

Fertilizer is not made from oil, it is made with atmospheric nitrogen and the hydrogen from natural gas.

Randall Parker said at July 1, 2008 5:15 PM:

Tushar,

I was trying to calculate together the decline from the peak US oil consumption rate plus the effects of population growth. You are just factoring in population growth.

Trent Telenko,

Thanks for catching my population number mistake. Actually, I used the 1940 number. Plus, I missed the 0 key and hit 9. I was aiming for 1950. So I have updated my numbers and fixed the post. We would be using 12 million barrels of oil today if we used the same amount of oil per capita as in 1959. So we need to fall over 40% from our peak to get back to 1950. We are part of the way there.

Randall Parker said at July 1, 2008 6:12 PM:

Mike Puckett,

Regarding fertilizer, oil, and natural gas: True, natural gas is used for fertilizer. But since rising oil prices pull up natural gas prices (Nick G recently pointed me to a research paper on the link between oil and natural gas prices in the United States PDF format) the higher price of oil means higher prices for N fertilizer.

Readfuturefrompast,

As I've said in previous posts: The Democrats have done us a favor by delaying the development of ANWR and OCS oil for when we really need it (and the 2010s will be when we really need it). Granted, that was not their motive. They were (and amazingly still are) trying to prevent the oil fields from getting developed at all. But now most Americans want more areas opened up for drilling. As the price of oil goes still higher support for drilling will go much higher.

I expect the cost of solar power to plummet. But our shortage is in liquid fuels and pluggable hybrid electric vehicles won't show up in substantial volume for several years. Don't get too excited by Toyota's 2010 pluggable hybrid announcement. Initial Toyota PHEVs will go only to fleet customers.

Randall Parker said at July 1, 2008 7:11 PM:

MattE,

The US Congress does not have the power to open up just about everywhere to drilling. The vast bulk of the remaining oil in the world is not in US sovereign territory.

What oil remains is mostly under control of national oil companies controlled by other governments.

crosspatch said at July 1, 2008 7:55 PM:

Mike Pucket: Chemical fertilizers are indeed made from hydrocarbons but I was wrong about oil. They are mostly made from natural gas and coal.

19 August, 2006, Beijing – PetroChina Company Limited ("PetroChina" or the "Company", SEHK: 0857; NYSE: PTR) broke ground for its Tarim chemical fertilizer production project today. Equipped with the state-of-the-art technology in the world, the new plant is designed to have a capacity of producing 450,000 tons of synthetic ammonia and 800,000 tons of urea per annum, making itself one of the largest single-unit chemical fertilizer making facilities in China.

The plant comprises key facilities for producing 1,500 tons of synthetic ammonia and 2,640 tons of melt urea a day, as well as that for coarse grain manufacture. With its discharge of industrial waste gas and water falling well within the government standards, the plant has obtained approval from the State Environmental Protection Administration of China, and passed the examination on environmental risks of chemical projects conducted by relevant authorities in June 2006.

The Tarim project, situated in Korla of Bayin'guoleng Mongolia Autonomous Prefecture in the Xinjiang Uygur Autonomous Region, utilizes natural gas sourced from the gas-rich Tarim Basin as raw materials. Whilst giving new significance to PetroChina in terms of business growth of its downstream operations, the project would also provide momentum to propel the agricultural and economic development of the region.

Also from another article:

Approximately 4% of total annual natural gas consumption in the USA and West Europe is used to produce raw materials, especially ammonia. In some countries, however, the use of gas for ammonia production accounts for a large proportion of national gas consumption. In India, for example, this proportion is roughly 40%.

...

60% of China's nitrogen fertilizer production is currently based on coal.

crosspatch said at July 1, 2008 8:48 PM:

Oh, one other thing that I remembered when reading my last posting. In 1950 many buildings and even homes were heated with coal and coal was used in more industry than it is now. There were still some coal fired steam locomotives in service in 1950. In the early 1960's I would sometimes go with my grandfather in the evenings to stoke the coal fired water heater at his place of business for the night. Coal stoves were still fairly common in 1950.

Randall Parker said at July 1, 2008 9:14 PM:

crosspatch,

Natural gas prices have gotten high enough in the United States that a lot of N fertilizer plants have shut down here and the production has moved to countries with cheaper natural gas. So the percentage of US natural gas that goes to fertilizer is lower than it used to be.

aaron said at July 2, 2008 8:43 AM:

Can you say recession.

Ironman at political calculations already did the per capita total oil consumption calc for the US since 1982. It's essentially flat.

June gas consumption does seem to be down more than the rest of the year: ~2%.

Expect to see a decline in vehicle miles driven of ~6 or 7% this year to last.

aaron said at July 2, 2008 10:18 AM:

And this isn't an example of price signals working, that requires an increase in supply.

Nick G said at July 7, 2008 3:53 PM:

" an example of price signals working, that requires an increase in supply. "

No, a reduction in demand also qualifies.

MIKE S said at March 27, 2010 6:00 AM:

u all are looking at the problem the wrong way. We burn 378 million gals. of oil every day. We add same amount of poisen into our air that we will soon reach saturation levels.One day in near future you will wake up to everyone wearing oxy-masks.Driving sealed carpartments with oxy pumped into thier gas burning auto.We sould be thinking obout the cost to ourselves than the cost at the pumps. Me i dont much care what happens i dont have much time left to see you idiots driving 90000000 gals.of gas. If you want change do it wisely!!!!!!!!!

matrix said at April 29, 2012 5:09 PM:

Petroleum is vital to many industries, and is of importance to the maintenance of industrial civilization in its current configuration, and thus is a critical concern for many nations is one of the main problems, it being used in so many ways, and needed so much.

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