US oil demand has fallen 5 per cent this year – the biggest drop since 1981 – according to new figures which underline changing American attitudes towards energy use.
The American Petroleum Institute, the national oil and gas trade organisation, said on Wednesday all big petroleum products, including petrol, distillate, jet fuel and residual fuel oil had had falls from January to October, ranging from 2.6 per cent for petrol to nearly 19 per cent for residual fuel oil.
Robin West, chairman of PFC Energy, the consultancy, said the fall in the leading indicator of US energy demand was an extraordinary event that had credited a series of shocks – the jump in oil and petroleum product prices this year, followed by the credit crisis just as prices had begun to fall. “People have started to cut discretionary spending and driving is now discretionary,” Mr West said.
In addition, Americans who never considered turning off air-conditioners or lights when leaving home had now made it a habit. Hummers, the hulking gas-guzzlers that had become commonplace on US roads, were now rarely seen.
Wind energy farms criss-cross the country, and efforts are being made to make high-cost alternatives, such as solar power, more affordable and, therefore, widespread.
Cisco DeVries, managing director of Renewable Funding, works with cities to provide financing that allows property owners to install solar and energy efficiency projects, which they repay through a new line item on their property tax bill.
“How many people would have cell phones if they had to buy 20 years’ worth of minutes up front?’’ he said.
Alternatives, such as solar and wind, now require people to buy equipment that in essence forces them to buy 20 years of electricity up front. “Our goal is to make going solar as easy as paying your utility bill.’’
Eric Solis, an electrical engineer in Houston, has been using solar energy for several years to power his shed lights, electric power tools and charge his electric lawn mower. He also installed a solar panel in the 1982 red Chevrolet pick-up truck he has converted into an electric vehicle, to power the lights, horn and other accessories.
“It was a personal challenge,’’ Mr Solis said, and one he now encourages others to take on, by visiting elementary schools during Earth Week and going to car shows. He has demonstrated his vehicle to 10,000 people.
Greg Melville also exemplifies the changing American mindset. He wanted to prove alternative fuels, such as vegetable oil, were feasible and so drove cross-country in a “French-fry car’’ – a 1985 Mercedes station wagon powered on oil collected from restaurant waste en route. He lived to write a book about his adventure in Greasy Rider, which motivates others to turn towards alternatives.
Even though petrol prices are down again, Mr Melville expects Americans will continue to find new ways around fossil fuels because many are motivated by fears of climate change, not just loss of income. It is why he hangs out washing to dry, composts vegetable waste and buys local foods, which do not require packaging and fuel to get to his market.
He expects others to follow the energy-saving route. People will not trade in their hybrids to go back to SUVs, he says. “There is a definite shift in mindset that goes beyond the price of gas.’’
PFC’s Mr West, nonetheless, expects demand to rebound with the economy and wants politicians to encourage supply growth so it can be met.
Yet oil majors are postponing some projects and questions are being raised about whether Alaska’s $30bn (£20bn, €23.7bn) natural gas pipeline to deliver clean-burning gas to the rest of the country will ever be built amid falling demand and the credit crunch.
Mr West says politicians must, therefore, work harder to keep demand down, despite plunging energy prices, by adding an additional 2 cents to the price per gallon of petrol each month for at least a year, taxing gas-guzzlers on purchase and providing incentives to get old vehicles off the road. “Politicians must send a price signal, so consumers don’t get back in their Cadillac Escalades.”