Transportation Fuel Consumption Through 2035

More than a quarter (26 of 98 quads) of our energy consumption in 2011 was for transportation. The vast majority (64%) was for light duty vehicles–the family cars. This was followed by heavy duty vehicles (19%), air travel (10%), marine (5%) and rail (2%).

The U.S. Department of Energy’s Energy Information Administration predicts that energy consumption for transportation will grow at an annual rate of 0.1%, from 27.6 quads to 28.6 quads. This is revised downward from their 2011 estimate of growth at 0.5% to 32 quads in 2035.

In my previous post I charted their assumptions for macro-economic drivers (population increase at 1% annually, GDP growth at 2.5% annually, 25% growth in household formation), all of which made me skeptical that the EIA could be ultimately correct about residential energy use. All of those factors apply to transportation as well.

But there are other factors at play in the transportation sector. Legislation mandates improvements in gas mileage for light duty vehicles (LDV), which the EIA duly notes. They forecast energy consumption for LDVs to drop 3.2% overall between now and 2035. But the better mileage is only one of the reasons they cite. The other is that they believe personal travel demand will rise more slowly than in recent decades.

I can easily believe that fuel efficiency will climb to comply with the law. There’s plenty of room for improvements and the government’s attempt to shift to measuring greenhouse gas emissions as opposed to fuel consumption may accelerate that trend. But the EIA offers absolutely no evidence to indicate why they think personal travel will grow more slowly. Population change doesn’t slow down. GDP grows at 2.5% per year. In fact, in their section on residential energy consumption they postulate something like a mass migration to warmer and drier climates as a reason why space heating will decline. But such a migration in the past has entailed vigorous personal travel as people return to visit the families they left behind.

Perhaps more significantly, with more domestic oil being brought to the surface, with growing numbers of cars converting to natural gas or hybrid- and all-electric  status, someone is going to have to explain to me why prices at the pump will not become less of a factor in determining the utilization of vehicles. This is in sharp contrast to the EIA’s forecasts, which see a real increase in prices of 48% for gas between now and 2035. And even though they predict personal incomes will rise by 81% during the same time frame, $5 a gallon gas would probably moderate driving just a bit. But is that realistic?

The EIA provides the following estimates for light duty vehicles for now and 2035:

• The number of licensed drivers increases from 210 to 269 million
• The miles driven per driver per year increases from 12,700 to 13,300
• But total fuel consumption drops from 16.7 quads to 16.1 quads because…
• Vehicle efficiency in miles per gallon improves 38%, from 20.4 mpg to 28.2

The EIA’s figures strongly suggest that Americans will drive their light vehicles almost 1 trillion more miles in 2035 and use 3% less gas.

I don’t see it happening that way. I think they were thinking more clearly in their 2011 estimates.