US gasoline consumption fell for the first time in five years in 2017 asAmericans saw higher gasoline prices, drove more fuel-efficient vehicles andtheir individual travel habits evolved, S&P Global Platts analysis of USEnergy Information Administration data found Monday. Monthly data from the EIA show total US product supplied for gasoline --a demand proxy -- averaged 9.317 million b/d in 2017. This was a decrease ofabout 0.006% from the prior year, the first decline since 2012.
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Although gasoline use declined on average, in certain individual weeks itreached unprecedented heights. In the week that ended August 25, 2017,gasoline product supplied hit 9.846 million b/d, the highest that figure hasbeen in weekly data going as far back as 1991.
A different set of EIA data show that among US states Pennsylvania sawthe greatest year-on-year rise in gasoline consumption, with demand growing11.9% in 2017, while New Jersey saw the greatest decline as consumption therefell 7.1% year on year.
In 2017, Texas consumed more gasoline than any other state, allowing itto reclaim its status as the single greatest user of gasoline after Californiaheld the distinction in 2016.
The EIA says this all occurred amid higher gasoline prices, which alignswith Platts data for 2017.
Conventional grade gasoline in Houston, Texas -- probably the most liquidgasoline market in the US -- averaged $1.60/gal in 2017, about 20% above itsaverage in 2016. Premium conventional grade gasoline in Houston followed asimilar pattern, averaging $1.74/gal, a 19% increase year on year.
Some Americans also paid more at the pump in certain regions, as somestates, including California, Indiana, and Maryland, introduced gasoline taxhikes last year.
Although 2017 was a lackluster year for gasoline demand growth, it isimportant to view the year in its historical context. In 2015, US gasolineusage rose 257,000 b/d compared with 2014 to an average of 9.18 million b/d.2015 saw the largest increase in US demand since 1976, when consumption grew303,000 b/d. 2016 was another robust year for demand growth, as productsupplied rose 139,000 b/d.
Thus, while US demand contracted in 2017, 2015-2017 were collectively thethree strongest consecutive years for US gasoline demand growth since2000-2002, when demand rose 417,000 b/d.
In absolute terms, Americans also used more gasoline in 2015-2017 than inany three consecutive years going as far back as 1945.
In this context, it could be argued gasoline consumption had littleroom to grow in 2017, as Americans bought fewer, more fuel efficient vehicles.
SHIFTING VEHICLE FLEET
There can be little doubt that the nature and size of the US vehiclefleet changed in ways that were not supportive to demand growth last year.
Data from the US Bureau of Transportation Statistics at the Department ofTransportation suggests gasoline consumption last year was crimped by morefuel-efficient vehicles.
The data show that the average fuel economy of all US vehicles on theroad increased steadily from 2011 through 2015. While data for 2016 and 2017has not yet been published, US vehicles almost certainly became more fuelefficient on average during those years thanks to the Corporate Average FuelEconomy standards put in place by the US Environmental Protection Agency.
Data from the Federal Reserve Bank of St. Louis show that total vehiclesales in the US fell slightly in 2017 as Americans bought 17.6 million newcars, down from 17.9 million new cars in 2016. This was the first decline invehicle sales since 2009, which may have been at least partly due to highergasoline prices.
While total vehicle sales fell year on year, Americans bought moreelectric cars than ever before. According to Inside EVs, a subsidiary of theMotorsport Network, more than 199,000 new electric vehicles were sold in theUS in 2017, beating the prior record from 2016. With more than 27,000 unitssold in 2017, the Tesla Model S retained its status as the most popularelectric car in America.
These factors help explain why American gasoline consumption fellslightly last year even though US drivers logged more miles in their cars andtrucks than ever before.
US gasoline usage ebbed even though Americans collectively drove morethan 3.19 trillion miles last year, as measured in the trailing 12-monthaverage, a 1.17% increase compared with 2016 and the strongest figure onrecord in data from the St. Louis Federal Reserve going as far back as 1971.This unfolded as Americans increasingly favored working from home as well asdomestic travel for holiday breaks and other vacations.
In a 2017 report, FlexJobs, a job search website, said 3.9 million USemployees, or 2.9% of the total US workforce, worked from home at least halfof the time, up from 1.8 million people in 2005.
This seems to align with polling from Gallup released in 2017 which alsoshow an increase in the popularity of telecommuting. Gallup notes that thetrend has been broadly observed across the majority of industries.
While some Americans may have been driving to work less of the time, thetotal number of miles driven last year may have gotten a boost from a renewedinterest in domestic traveling for holiday breaks and other vacations.
Last year, AAA, an auto club, forecast travel during Christmas and NewYear period, from December 23, 2017 through January 1, 2018 would be thestrongest in US history, with more than 107 million individuals expected tocontribute to the highest year-end travel volume on record.
In 2017, MMGY Global, a travel and marketing company, released its annual"Portrait of American Travelers" report. The report found 13.9 million morevacations were taken within the US compared with overseas since the 2016report. MMGY said the rising preference for domestic destinations spurred moreroad trips.
--Seth Clare, firstname.lastname@example.org
--Edited by Keiron Greenhalgh, email@example.com