The Energy Information Administration (EIA) recently came out with its monthly U.S. gasoline production report for August, showing that Americans are using more gas per day than ever before.
In this clip from Industry Focus: Energy, host Sean O'Reilly and energy analyst Taylor Muckerman explain why and how we're seeing a spike in gas use when cleaner energy and fuels are increasingly becoming mandatory.
A full transcript follows the video.
This podcast was recorded on Sept. 29, 2016.
Sean O'Reilly: Speaking of the EIA, they just came out with United States gasoline consumption, which they do on a monthly basis. Interested to get your thoughts on this.
Taylor Muckerman: I'm thinking August made news?
O'Reilly: A little bit, yeah. The United States consumed 9.7 million barrels of gasoline per day in August. That is a new record. It's a little bit more than the peak right before the Great Recession.
Muckerman: In 2007, right?
O'Reilly: Yeah. It's interesting to me because, correct me if I'm wrong, cars are way more efficient right now in miles per gallon.
Muckerman: Yeah, they're more. They're getting to be way more, but they're not quite there yet. There's still a few more years before all the CAFE standards fully kick in. But there are year-over-year requirements. What you're seeing is, as short-sighted as Americans are, they're going out and buying record numbers of SUVs and trucks again because gasoline is cheaper than it's been since 2009. The cheapest Labor Day gas prices in the last 12 years. SUV and truck sales have been outpacing car sales for quite a while now. You're looking at, if not record, near-record sales for SUVs and trucks, still. It just continues to rise. Those standards, because of increasing fuel efficiency standards, applied to the car based on what is called a footprint. So you're looking at larger cars not having to meet as strict demand as quickly. So, these cars haven't really experienced the dramatic fuel efficiency gains as you've seen in smaller sedans like a Toyota Camry or Corolla or those hybrid vehicles that have come out that get 50 to 60 miles to the gallon.
O'Reilly: Right. So, we've thrown a lot of data points at our audience so far. You have OPEC who is notoriously untrustworthy. You have the supply-and-demand statistics that are iffy on a global basis, but it is what it is.
Muckerman: Some people suggest that 2017 could be equilibrium for supply and demand.