New Vehicles, Peak Oil and Future Gasoline Consumption

In my previous blog post on peak oil, I looked at historical oil consumption in the US and put that next to the fuel economy of the light duty auto fleet. In the article I did not consider vehicle miles driven and that was a potential source of the slight discrepancy between gasoline supply and vehicle mpg in the last decade. Luckily I found that data at the federal reserve. So instead of number of vehicles, here I take miles driven/fleet average mpg and see if that correlated to gasoline consumption better:

 

The correlation is pretty similar. In this post I’ll look at what the future holds for gas consumption. For that let’s take a dive into US light duty vehicle sales. Here are new car sales cars vs trucks (source):

 

Going forward, I will assume 65% cars, 35% trucks. Here is the fuel economy of cars vs. trucks (source):

Going forward, I will assume that the fuel economy growth continues at the average rate of the last 10 years.

Here is what the US Light Duty Vehicle Fleet looks like:

There are roughly 250 million cars on the road growing at about 2 million cars year. While new car sales are rising, the fleet size is not growing as fast indicating that more cars are being retired. While new car sales have caught up to pre-recession era’s, I assume that new car sales growth will slow to average. I will also assume that retirements will have fleet-average fuel economy. This is a conservative assumption because it would be more likely that an older car is retired than a newer car.

Using all the assumptions above, here is an attempt to calculate gasoline consumption going forward. The combined fuel economy of new vehicles assumes 65% cars, 35% trucks:

For fleet average fuel economy going forward, I will assume an addition of 2 million cars to the fleet and a retirement of (new car sales – two million cars). This is what that will cause to happen with fleet average fuel economy:

Finally getting to gasoline supply using the new fleet size and average fuel economy, I get this:

From my last article we know that the Vehicles/mpg directly correlates with gasoline consumption. The dotted line just adds some randomization to the values. I added it to represent that some years we could have increases, some year decreases but the overall trend is likely to be down. Using the correlation from before, here is my projection for US gasoline consumption in the future:

Stay tuned as in the next in this series on Peak Oil, I add the impact of Electric cars to see how much worse this trend can get for oil.