The jury's still out on peak oil, but the concept of peak gasoline has some very credible proponents.
Last Thursday, ExxonMobil
This isn't a new position for the prominent oil patch poobah. Back in April, The Wall Street Journal cited Exxon's belief that U.S. light duty gasoline demand will drop by 22% by 2030.
Tillerson isn't alone in the peak-gasoline camp, either. The government's own estimates indicate that gasoline consumption peaked in 2007, at 371.2 million gallons per day. Cambridge Energy Research Associates has concluded that 2007 was probably the peak, barring a collapse in the oil price.
The main drivers (ahem) of this trend are the dovetailing desires for reduced oil dependence, lower emissions, and better fuel efficiency. The high oil prices of 2008 -- and even today's prices, which are quite high by historical standards -- have been a major force to shift consumer preferences toward more compact and efficient vehicles, including hybrids. Lithium-ion battery whiz A123
A parallel development is the army of venture capital-backed science projects seeking all manner of petroleum alternatives to stick in your fuel tank. Renewable fuel standards -- optimistic, given current funding levels --hold out the promise of a robust end market for these products.
ExxonMobil made headlines with its algae investment, following in the footsteps of Chevron
Refiners have also been increasingly moving into conventional ethanol production. Valero took the plunge with its purchase of all those VeraSun plants back in March. Just last week, Murphy Oil
The motivations behind all of these corporate actions become clearer when you consider the peak gasoline point of view. With even ExxonMobil, a diehard hydrocarbon company, moving into alternatives, you know the outlook for refined petroleum is dimming. That could make the case for avoiding the independent refining group. Then again, if there's an ongoing flight from the space, those like Holly