The BBC report shows the following drop in car sales in the US last month:

Nissan - 37%
Ford - 34%
Chrysler - 33%
Toyota - 32%
Honda - 24%
General Motors - 16%.

Overall industry-wide car sales declined 26%.

This represents a huge demand destruction.

But what does it mean for energy use?
Long-long term it will mean fewer cars and so less fuel used, but should it have any effect in the short term on gas demand?

Is the demand destruction in cars meaning that people keep more ‘gas guzzlers’ on the road and so demand for gas will be higher than if the economy had allowed people to buy the cars they wanted?

Link

I don't think there are that many cars being taken off the road.
I think basically what that means is people are holding onto their cars a lot longer.

There will always be financial idiots out there who like to lease a new car every 2 years, however most people like to hold onto their cars for at least 7 years.
Back in the days if you were driving a 10 year old car people would think you're a financial cheap ass.....I think that's going to be the norm from now on.
I've got a 1997 car and I'm going to keep on driving it so long as it passes the state smog check.

75% of sales are used vehicles. CNN has a nice piece on Fun used car facts.

Models from the 80s/early 90s are vastly more popular now, perhaps fuel efficiency is going up...

I would say that the decline in car sales indeed means that the fuel efficiency of the fleet (mpg or l/100km) gets better more slowly. However the decrease in miles driven more than makes up for that, so gas usage continues to decline.

The latest EIA stats show an amazingly large drop in US petroleum consumption for the week ending Sept. 26. Product supplied was down by 2.175 mbd, year on year, for a percentage drop of about 11%.

Interesting how little effect a drop of that magnitude has on the price and general travel situation in the US. A few minor shortages, but on the whole, it's business as usual. Just goes to show how much fuel people waste over there.

It's also pretty anticlimactic when you contrast the reality with the prognostications of peak oil boy wonder Matt Savinar:

This means auto mechanics have good job security.

joeltrout

Has supply failed to meet demand?

All I see is demand destruction in the face of high prices.

I don't see any demand that is not satisfied by the current supply.

I imagine that the first 10% of demand elasticity has a lot more flexibility to it than the next 10%, and the 10% after that.

It's sort of like it's easy to hold your breath for 30 seconds, harder to do it for a minute, and even harder to do longer than that.

Of course, time will tell.

Every oil price shock is going to be followed by demand destruction. The question is how robust an economic recovery will be possible with oil prices still relatively high by historical standards.

in hte mean time we have that report that the Russians oil prodcution is down.

as the KSA say - "the market is well supplied"

the fact that the market is smaller is nether here not there


until later that is......


Forbin.

So JD, it's done then? Can I put this "Peak Oil Thingy" behind me now once and for all? I really do want to go back to the life I had before I heard and read about Peak Oil. I want my ignorance back. It's been a challenging 2 years for me trying to live without prepping. I don't want to waste years of time and money preparing my entire life around the final consequences of consuming a finite resource knowing it's going to last forever. Just reply "Peak Oil doesn't exist, you don't have to ever worry about it ever happening evar! There will always be finite natural energy resources to consume forever." I want to die knowing my kids and grand kids won't have to worry about it either.

I'll check back here later to see.

Thanks in advance!

Lol nope this isnt a dream, its still happening. Sorry it isnt happening the way you had imagined

Do you think the economy would be getting hit so hard if oil wasnt a portion of the problem?

Seriously, think about it really hard... Oil played a role in where we are today. It might not have been what set off the chain reaction of events, but I believe it amplified them.

Well said. So even if oil prices have doubled (up 100%) the demand has only slowed by 10%, which was more or less to be expected.

Now the next time oil prices double, say to $250 - $300, we'll have less than a 10% reduction; the inelasticity of demand for oil has grown. OTOH a 10% reduction IS a lot, and may have given us breathing space for years were it not that consumption has grown in other parts of the world, most notably Asia. So in fact we're seeing a shift in consumption from the West to Asia, just like I expected and predicted but which was denied by some (mrBill among them) as they thought China and India among others would sink before the west, notwithstanding the argument that the marginal product of oil in the east was and is higher than in the West.

Yeah, in case you hadn't noticed JD, that 11% drop has had really profound impacts on our economy. Things are not looking good here economically at all. I think that in a lot of ways that's probably right that our demand can fall 30% or even 60% and not impact our lives directly that much. People will still be able to get where they need to go and have the things they need to get by. The problem that's going to be quite tumultuous here and other places is that there's a lot of people employed using petroleum wastefully. The Spanish fishing and trucking strike was a prime example. For somebody, that demand destruction means being out of a job, and they're not going to necessarily just be really happy about accepting it.

I think Aaron use to have a saying, "Don't fear peak oil. Fear how your neighbor will react to peak oil.

Edit

Cheap energy = potential for rapid wealth creation enhanced by use of leverage

Expensive energy = potential for rapid wealth destruction enhanced by the presence of leverage

JD,

The PO news board linked an article you wrote dismissing the Hirsch report as wrong. I think you misunderstand Hirsch, who never said demand destruction wouldn't occur, but was saying that to avoid harsh economic consequences (caused by demand destruction) a transition to other sources via some type of "Marshall energy plan" is needed. Again, Hirsch didn't argue there wouldn't be demand destruction, just what it would take to avoid the harsh economic realities of demand destruction.