Author Archives: James_Hamilton

Will U.S. oil consumption continue to decline?

A lot of attention has been given to the optimistic assessments of future U.S. and Iraqi oil production in the IEA’s World Energy Outlook 2012. However, perhaps even more dramatic is the report’s prediction of a significant long-term decline in petroleum consumption from the OECD countries. For example, the report predicts about a 1 mb/d drop in U.S. oil consumption by 2020 and a 5 mb/d drop by 2035 relative to current levels. I was curious to examine some of the fundamentals behind petroleum consumption to assess the plausibility of the IEA projections.

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2012 World Energy Outlook from the International Energy Agency

On Monday the IEA released its World Energy Outlook 2012. This includes an optimistic assessment of the situation in the United States:

The United States is projected to become the largest global oil producer before 2020,
exceeding Saudi Arabia until the mid-2020s. At the same time, new fuel-efficiency measures in
transport begin to curb US oil demand. The result is a continued fall in US oil imports, to the
extent that North America becomes a net oil exporter around 2030.

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Finding compromise

President Obama won a second term in office yesterday, receiving 50.3% of the popular vote But the Republicans held control of the House of Representatives and Americans remain deeply divided. Historically, the party in control of the White House loses some congressional seats in the midterm elections. That means that any legislation passed into law over the next two years, and likely the next four years, is going to have to be agreed to by both a Democratic President and a Republican House.

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