U.S. gasoline consumption might be on the upswing now, with gas prices down 32 percent from a year ago, but in 2013, average fuel consumption by American drivers hit its lowest level in at least 30 years, according to a study by University of Michigan researcher Michael Sivak
In 2013, the amount of gas used per driver, vehicle and household dropped below the levels in 1984, the first year of the study. Consumption in 2013 was down 14 to 19 percent from the peak level of 2003-04.
Specifically, the amount of fuel consumed in 2013 was approximately 392 gallons per person (down 17 percent from 2004), 583 gallons per driver (down 16 percent from 2004), 524 gallons per vehicle (down 14 percent from 2003) and 1,011 gallons per household (down 19 percent from 2004).
In 1984, annual fuel-consumption rates were 400 gallons per person, 608 gallons per driver, 602 gallons per vehicle and 1,106 gallons per household.
"The reductions in the fuel-consumption rates reflect, in part, the added contribution of the improvements in vehicle fuel economy," Sivak explains. He notes that societal changes such as increased telecommuting, use of public transportation and urbanization of the population, along with changes in the age composition of drivers, have impacted the need for personal transportation.
"Overall, the combined evidence from this and the previous studies indicates that we now have fewer light-duty vehicles, we drive each of them less and we consume less fuel than in the past."
Regular gas prices averaged $2.42 nationally Thursday, down from $3.54 a year ago. Presumably that price drop will spark more driving and thus more fuel consumption.
Meanwhile, U.S. oil prices dropped to a six-year trough below $44 a barrel last week amid sluggish demand and bountiful supply. Some experts say a slide to $30 is in the offing.
But CNBC commentator Ron Insana says that might be a conservative estimate, given the disruption likely to be caused by alternative energy sources.
"I think that the long-term implications for oil prices are far more bearish than the $30 bottom that many are waiting for," he writes in a commentary for CNBC
"It may be an exaggeration to suggest that oil is going to zero. But it may be quite possible that oil has no meaningful upside — save for a trade, every now and then."
U.S. crude oil traded at $50.37 a barrel late Thursday morning, down 53 percent from late June. U.S. oil output and inventories have reached more-than-30-year highs.
Alternative energy could ultimately "drive oil out of the market entirely," Insana states. Among the alternatives he cites are electric cars, wind and solar power.
"It used to be widely believed that oil came from the remains of dinosaurs (a theory that was disproven a few years ago). Well, oil may ultimately face the same fate: extinction."
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