DOE Says Gasoline Demand to Decrease

In a report issued May 23 by the U.S. Department of Energy’s Energy Information Administration, long-term U.S. gasoline demand is expected to decrease as vehicles are required to go farther on a gallon of gasoline.

The report cites projections based on established fuel economy standards that cover model years through 2025. Passenger car fuel economy is projected to improve the most – from 31 mpg in 2015 to 45 mpg in 2025. Light trucks should increase from 21 mpg to 31 mpg, meaning that overall, gasoline consumption by light-duty vehicles is projected to fall from 8.7 million barrels in 2017 to 7.5 million barrels in 2025.

Those standards, established during the Obama administration, might be relaxed, given that the Trump administration is expected to attempt a rollback of regulations. But any changes to the current rules will require a review process that might take several months to complete, while meeting resistance from environmental groups and unions.

In March, Trump met with automakers in Detroit, saying he would set up a task force in every federal agency “to identify and remove any regulation that undermines American auto production.”

Automakers have also claimed that rules set by the Obama administration were too expensive and could cost American jobs.

Another report issued last week by the Natural Resources Defense Council (NRDC) concludes that the Obama-era fuel economy standards actually create jobs. “Building clean vehicle technology directly supports 288,000 manufacturing and engineering jobs in the United States,” the report says, citing more than “1,200 factories and engineering facilities” that make “technology that improves fuel economy for today’s innovative vehicles.”

And according to Leo W. Gerard, International President of the United Steelworkers (USW), related industries also benefit. “Tens of thousands of jobs in states like Ohio are proof that finding solutions to address climate change, clean air and other environmental issues…can build up America’s manufacturing sector and our economy as a whole,” said Gerard.

Weakening the standards may be unpopular with a majority of Americans, according to recent surveys commissioned by NRDC in Michigan and Missouri in response to new legislation introduced by Senator Roy Blunt (R-MO) that would further weaken fuel economy standards. The surveys were conducted by Greenberg Quinlan Rosner Research in Michigan and by Kiley & Company and American Viewpoint in Missouri. Among the findings from the surveys are that 71% of Michigan residents favor the 40-mpg proposal and 73% of Missouri residents favor the 40-mpg proposal.

NRDC and the BlueGreen Alliance contend that strong federal standards have spurred innovation and investment, supporting manufacturing and engineering jobs.

The NRDC report can be found here.

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