U.S. drivers are doing something they haven’t done for nearly two decades — consume less gasoline.
When we are talking about a decrease in fuel consumption it is in the range of half a percentage point.
I know that is a small percentage but it adds up to a tremendous amount of oil and it would be the first time in the last SEVENTEEN years that there was any annual decline at all. And it would be only the eighth year since 1951 in which demand for fuel has declined.
It is clear and obvious that the perfect storm of deflation, including the bursting bubbles in housing, etc and the rise in fuel prices due to an increase in foreign consumption has gotten the attention of the average American driver.
According to AAA, the national average on Monday for a gallon of fuel was $3.50 a gallon, or 64 cents higher than a year ago. Diesel was $4.20 per gallon, or $1.27 higher than a year ago.
What is in question is at what price per gallon will American drivers demonstrate a stronger decrease in demand. Some say that it would happen when the price of fuel stays above $3 for some period of months. But right here in Southern California I am seeing fuel prices above $4 so we may very soon hit that critical mass point.
Mike Right, a spokesman for AAA Club of Missouri, said that a decline in fuel usage shouldn’t come as much of a surprise. A survey conducted in January by AAA found that many motorists were already deciding to change vacation plans for this summer by planning for shorter trips. “We are starting to see some signs of that,” he said.
Mainly because of the December drop, the Federal Highway Administration said it was estimating that miles traveled for all of 2007 were down 0.4 percent.
There is already a shift in demand from fuel guzzline SUVs towards higher MPG vehicles.
The government is soon to release new fuel efficiency standards with a minimum requirement of 35 MPG by 2020.
At the present time, newly manufactured vehicles in America are required to maintain at least a 27.5 MPG average and SUVs, trucks and vans are required to measure up to a 22.5 MPG minimum average.
Democrats have said the new fuel economy requirements will save motorists $700 to $1,000 a year in fuel costs.
While this has been going on many house owners have been living in tents and many car owners have taken to public transport. The increase in people taking busses across the country last year was 4% and this year, so far, it is at 9%.
One ongoing concern is that even though Americans may be cutting back on fuel consumption, emerging middle classes in faster-growing countries such as China and India are quickly embracing the driving habit and pushing global demand for fuel higher.
So the question is a very simple one. Do people need to ride the bus and bicycles or simply sit at home and watch television or plot the revolution on the internet or do other things on the internet instead of living their lives in the real world? Or is there something else that they can do to offset rising fuel costs?
There sure is and it is called Water4Gas