Gasoline Consumption Plunges, Diesel Soars

John Horner
by John Horner
gasoline consumption plunges diesel soars
The drop in fuel consumption continues. The Wall Street Journal reports that "gasoline consumption dropped 3.3% from last year to 9.347 million barrels a day." This puts current domestic gas usage at the lowest level since 2003, effectively rolling back five years of growing demand. Consequently, fuel supplies at refiners are growing, up by one million barrels in the last week alone. Of course, compared to 9.347m barrels per day of consumption, having an additional million barrels in inventory is hardly a glut. The reduced consumption started with a one percent drop (compared to last year) during April, ramped to a 2.2 percent drop in June and then hit 3.3 percent during the week surrounding the 4th of July. But, while consumers are cutting back, trucking and farming are doing the drunken sailor routine. U.S. diesel consumption is up a full six percent compared to last year– even though diesel fuel prices are up 65 percent while the price of gasoline rose by only 38 percent. Ironically, some of the boom in diesel fuel use is down to increased ethanol feedstocks and the fleet of tanker trucks required to move the stuff around. (Gasoline can be transported over long distances in pipelines; ethanol has to go one tanker truck at a time.) As for the clean diesel car revolution, dead on arrival.
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  • Pch101 Pch101 on Jul 14, 2008
    Let me clarify, diesel fuel will be prioritized over gasoline, in order to keep those very industries going. Nobody in government can change refinery output overnight. There is no magic switch to be flipped that is going to suddenly convert refineries to produce more diesel. There is already a gasoline glut, because most of it is consumed by retail users (us) who adjust their consumption based upon economic cycles. Diesel is more of a challenge for the very reasons that you have already cited -- there are commercial users who don't reduce their consumption as much when the economy turns downward, particularly in countries that have not suffered the same economic downturns that the US has. The refiners are currently producing at a loss. They are unable to pass on all of their cost increases to the gas stations who buy it from them. If you are a regular guy who is concerned about future disruptions, you are much better off with a gasoline-powered car. There is more than enough gasoline to go around; the only reason that it isn't cheaper is because the speculators have gone crazy bidding up the price of the oil that the refineries need.

  • Chuckgoolsbee Chuckgoolsbee on Jul 14, 2008
    qa Says: Then why are used Diesel Jettas and Golfs holding their value? I’m contemplating on whether get one with the intent of using bio fuel or recycled restaurant cooking oil. Anyone with experiences to share? I have been running on some form of homemade biofuel for about 4 years now. I started with filtered WVO. I had to be anal about filtration (down to 1 micron) to avoid IP issues. You can't just dump waste oil into your tank and drive. Lots of settling time, heating, and filtering. I would then mix it with #2 Diesel from the pump. My max mix was about 50%, and that was only on the hottest days. If you mix, you don't have to pre-heat the fuel. If you go straight veggie oil you will have to modify your car to pre-heat the veggie oil to 130°F... then have a second tank of petro-Diesel to purge your lines and pump before you shut off the car. I did end up clogging one of my injectors with VO. Thankfully I'm a reasonably competent mechanic and following a HOWTO from I was able to swap injector nozzles out in an hour or so. I started homebrewing BioDiesel about 18 months ago, and it took me about 4 months to get the process down to steady, reliable, high quality fuel. My goal was to be energy independent should Diesel fuel hit $4 a gallon. I arrived just in time. My costs for fuel are now well under $2 per gallon. The hardest part of VO collecting is dealing with the food service industry, which is more volatile than nitroglycerin. Restaurants change hands and turn over help more often than Bob Lutz says something outrageous. The next hardest part is competition from commercial BioDiesel producers, who now have started paying places for their waste oil. The days of "Free" fuel are gone. Making BioDiesel is a DIRTY job. I have a barn, out on a few acres in a rural area where I do my processing. I can't imagine trying to do this in a suburban garage. If you don't have the space or personal resources to do the work, consider finding a BioDiesel cooperative in your area and volunteering your time. They always need cash, chemicals, waste oil collectors, etc. You get out what you put in, so everyone wins. Hope that helps. --chuck

  • Qa Qa on Jul 14, 2008

    Chuck, Thanks for your valuable insight. Your co-op suggestion sounds like an excellent idea. Cheers, Q

  • Chuckgoolsbee Chuckgoolsbee on Jul 15, 2008

    You're welcome. Good luck! --chuck