Peak Gasoline
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EbS-P
Minister of Fire
The price difference between diesel and gasoline which used to be really linked and now not so much I find interesting. I see gasoline demand going down but I don’t see on road diesel demand shrinking as much or at all. So does that mean even tighter diesel supply and higher prices?
Natural gas peak may be close?
Natural gas peak may be close?
I think there's a lot of merit to this. BEV and PHEV vehicles almost exclusively replace gasoline powered vehicles, makes sense that gasoline demand decreases. Issue is almost all refineries in the west were built at a period where gasoline demand was so high it had to be cracked from other crude oil fractions.
Diesel supply is going to be an issue, Diesel demand is relatively inflexible. The trucks, trains, buses and ships must still move goods and people, regardless of fuel price, heating oil will still be purchased to heat homes and businesses. The current stock of refineries are not capable of outputting more Diesel in current form, Diesel was a low value by-product at the time of their construction, and significant investment would be required to modify the refineries to produce more.
There will be some change in consumer vehicles, GM has already phase out all its small diesels except the 3.0 in the pickups and large SUVs, Ram will likely drop all theirs minus the 6.7 Cummins, and Ford only has the 6.7 Powerstroke left. Both vehicles in our driveway are Diesel, and we're economic choices at the time of purchase, but if replaced today would both be gas pots. But this change will be take 5 or more years to have any appreciative effect on demand.
IMO natural gas demand will continue to increase, particularly for power generation. It is the quick response backup fuel of choice for renewables, and will continue to replace coal generation. Particularly as BEV and PHEV vehicles increase demand in the electrical grid. Maybe we're approaching the peak for heating and domestic use however.
Diesel supply is going to be an issue, Diesel demand is relatively inflexible. The trucks, trains, buses and ships must still move goods and people, regardless of fuel price, heating oil will still be purchased to heat homes and businesses. The current stock of refineries are not capable of outputting more Diesel in current form, Diesel was a low value by-product at the time of their construction, and significant investment would be required to modify the refineries to produce more.
There will be some change in consumer vehicles, GM has already phase out all its small diesels except the 3.0 in the pickups and large SUVs, Ram will likely drop all theirs minus the 6.7 Cummins, and Ford only has the 6.7 Powerstroke left. Both vehicles in our driveway are Diesel, and we're economic choices at the time of purchase, but if replaced today would both be gas pots. But this change will be take 5 or more years to have any appreciative effect on demand.
IMO natural gas demand will continue to increase, particularly for power generation. It is the quick response backup fuel of choice for renewables, and will continue to replace coal generation. Particularly as BEV and PHEV vehicles increase demand in the electrical grid. Maybe we're approaching the peak for heating and domestic use however.
Article seems a bit speculative. Sure, demand is down this year...
But, didn't we see a historically high price spike this summer/fall? Maybe THAT had something to do with reduced demand?
In practice, I think plateaus like this are very flat/broad and bumpy. I wouldn't bet a dollar that demand won't rebound above 2021 in 2023 or 2024.
But, didn't we see a historically high price spike this summer/fall? Maybe THAT had something to do with reduced demand?
In practice, I think plateaus like this are very flat/broad and bumpy. I wouldn't bet a dollar that demand won't rebound above 2021 in 2023 or 2024.
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EbS-P
Minister of Fire
I think we could just draw the conclusion based on increasing fleet mpg. Which for 2022 is out pacing population growth by substantial margins. The whole remote working environment must cut consumption too. Is it a long term trend though??
How are BEV mileage figured in to the fleet mileage. MpgE (which is dumb) shouldn’t be used IMO.
Sure, fleet mpg is increasing (lagging from the Obama era, both implementing changes and retiring old guzzlers). But AFAIK the fleet mileage figures are not weighted by the miles driven in each vehicle.
A side effect is that a lot of folks have a mix of high and low mpg vehicles, and it is easier to swap usage between them when the price spiked this summer. IOW, the supply/demand curve is probably more elastic now than is was before.
bogieb
Minister of Fire
I used to have 2 vehicles (SUV and high mpg car) and between them I would put on about 24k miles per year. That doesn't count the motorcycle that I would add another 3-5k (80% of that was commuting). Since 2020, I've been working remote and my job should stay that way. That saves me a minimum of 100 miles per day if I take the most direct route with no side trips and no traffic jams where I would have to find an alternate route.
Late July 2021 I sold all 3 and bought a 2018 SUV with 33, 500 miles on it. A couple of weeks ago it turned 40,000 miles. At this rate It will take me another 3 years minimum to put on the same miles that I used to put on in a year.
However, it really depends on how many stories there are like that out there. I have coworkers that are also now WFH. But they live much closer to the office and they would drop their kids off to school on the way. So those people may or may not be saving mileage.
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