United States oil consumption in 2012 will be about 4.7 million barrels a day, or 20%, lower than it would have been, if the pre-2005 trend in oil consumption growth of 1.5% per year had continued. This drop in consumption is no doubt related to a rise in oil prices starting about 2004.
via Why is US Oil Consumption Lower? Better Gasoline Mileage? | Our Finite World.
.There is a common line of thought that argues that we should undertake a massive restructuring of the economy, even if it has no current clear benefit, in preparation for some dramatic future change like climate change or peak oil. Folks like Bill McKibbean have the logic, unless we make drastic changes now, the future will be bleak.
Their logic reminds one a lot of the logic of a High School Guidance Counselor, pushing over-priced college educations at so-called “select institutions” that are very over pricd. They argue unless one gets an expensive college education, the future will be bleak. They say, unless you go seriously in debt, you will have no future and be without a good job.
Nobody today can tell us for sure about when or if climate change will occur, or for that matter what the impacts of peak oil will be. We have projections and models that extrapolate data based on today’s conditions and projected changes, but they probably are not accurate as effects rarely are linear. It�s quite possible that effect our growing use of fossil fuels may be far different then anything yet predicted.
Yet, it�s also hard to object to efficiency standards and pollution controls on power plants that benefit society now. More energy while burning less fuel will benefit the economy by lowering costs over the long-run. More fuel efficient cars, while possibly more expensive up front, will provide drivers with lower fuel bills over the car�s life. Good standards that improve efficiency, conserve resources, and reduce pollution, help us now.
I disagree with folk like Bill McKibbean who argue for a radical transformation of the economy based on a projection of climate change or peak oil. We should work to conserve resources and clean up our generating plants, but not because of a future projection, but to improve economic efficiency and the quality of our lives today. If with incidentally also help change the projection for bad things to happen tomorrow, then all the better.
Notes on the Re-Run for Saturday, May 5th.
— Andy
The problem with “peak” theories is they ignore the law of supply and demand. As one learns in Economics 101, everything has a demand curve, which shows that as price rises, demand for a product declines. People look for alternatives when prices increase.
This curve is known as the price-elasticity coefficient, and is calculated by the “percentage change in quanity demanded of product x” divided by “percentage change in price of product x”. Some products are considered fairly elastic and other more inelastic, depending on how subsitutable one product is with another one.
Higher prices change both consumer choice and behavior. People will for and foremost look for alternatives. If no alternatives are avaliable, people will alter their use of a product, such as adopting more efficent techniques of use of a product, and then ultimately reducing consumption by choosing alternative methods of living that use less of a product.
For example, gasoline.
If gasoline prices go up, and people believe that gasoline prices will remain high, they will look at alternatives to gasoline, like E85 ethanol or gasoline made from sythentic petroleum. If that doesn’t work, they will over time purchase more fuel efficent cars, canceling car trips, taking public transit, and moving closer to where they work.