Peak Gasoline Consumption is Here
1 in 4 new cars sold were electric in 2023
Need-to-Know: The U.S. reached peak gasoline consumption 8 years ago
Gasoline consumption peaked in the U.S. in 2017-18 and has declined ever since.
Surprising no?
Especially since our vehicles have blown up in size and weight as more people chose to buy SUVs and pickups instead of sedans. These vehicles have poor fuel efficiency. And yet overall gasoline consumption is going down.
This is significant because drivers in the U.S. consume 9% of the world’s oil, more than any other country. (In Europe and most Western countries oil consumption started to decline around 2010.)
Several reasons for gasoline’s decline:
Better fuel efficiency thanks to government regulations
Increasing popularity of hybrid electric vehicles—10% of new vehicle sales in 2024
Work from home trend that started during the pandemic
Growing numbers of electric vehicles— about 1.6 million new EVs will hit the roads in the U.S. this year, topping the 1.4 million sold last year.
Globally 1 in 4 new cars sold was electric or plugin hybrid-electric in 2023.
Need-to-Know: 1 in 4 new cars sold last year was electric
The big increase in new EV sales means lots of lower-priced used EVs on the market.
For example, 3-year-old Teslas are going for $25,000 to $30,000 in the U.S. It’s important to know that EV batteries last 10-20 years, according to J.D. Power and Associates. Batteries also have an 8-year manufacturer’s warranty.
Replacing an out-of-warranty battery is very expensive ($10,000+) but then so is replacing an engine in a gasoline-powered vehicle. (EVs don’t have engines, that is what the battery essentially is.)
The rest of the world is also moving to electric forms of transportation as outlined in previous NtK issues:
Need-to-Know: We’ve reached Peak Oil Consumption
A decade or two ago everyone was worried about running out of oil. This was the so-called era of Peak Oil. Looking back it seems like it was a scam to push up oil and gasoline prices. (Wonder who benefitted?)
Globally, gasoline consumption and oil consumption have plateaued and are expected to fall in the next few years.
However, oil companies are ignoring this and are ramping up oil production. Somehow they have convinced banks to finance this expanded production to the tune of $705 billion in 2023! (See Big Banks (Still) Pumping Billions Into Fossil Fuels.)
Who is denying reality here to keep their stock prices high?
Oil demand is forecast to peak before 2030, according to the latest report from the International Energy Agency (IEA).
HOWEVER, oil producers, led by the U.S., are pumping so much money into new oil production there will be more than 8 million barrels a day of spare capacity in 2030, the Financial Times reported.
(Each barrel holds 160 liters (35 gal.), so 8 million unneeded barrels a day pose a bit of a storage problem.)
The world faces a “staggering” surplus of oil equating to millions of barrels a day by the end of the decade
—International Energy Agency (IEA)
Need-to-Know: The end of the fossil-fuel era has arrived— IEA
In recent years the much-criticized IEA has accepted and understood the necessary and inevitable rise of renewables. Last year they said the world was at “the beginning of the end” of the fossil-fuel era.
Led by OPEC, the price-controlling oil cartel, the oil industry refuses to accept this. OPEC calls the IEA’s oil surplus forecast “dangerous”.
Given the dangerous and costly extreme weather billions of us have faced this year, the real and growing danger we face is continued carbon pollution.
Until next time, be well
Stephen
And Canadian Conservative Leaders still don't get it. Like Alberta’s Premier banning renewable energy by making the whole province scenic with pro oil sands regulations.
Smith, Moe, Higgs and Poilievre have laid 1 st claim to being the ostriches of Canadian politics by burying their brains in the sand, although apparently ostriches don't do that but those 4 sure do!
Thank you, Stephen, for an article that is hopeful.