The Disappearing Gas Act

President Obama stated in his State of the Union address last month that, "We have doubled the distance our cars will go on a gallon of gas".  When I heard that I immediately could not understand how he could make such a statement.  I was not the only one shaking my head in wonder.  Here is what PolitiFact.com said about Obama's claim.

We reached out to the White House asking for backup to this claim but did not receive any. But back in 2011, the EPA announced a plan, in partnership with a dozen automakers, to increase average fuel economy to 54.5 miles per gallon for cars and light-duty trucks. (That figure represents a combined city/highway rating as tested in a lab. In real-world driving, the EPA estimates drivers would average closer to 43 mpg.)

Is that for cars coming off the assembly line now? Not hardly. The 54.5 mpg benchmark is the goal for model year 2025 vehicles.

Fuel efficiency is gradually increasing on the way to the 2025 goal. When he took office in 2009, federal standards called for an average rating of 27.5 mpg. For 2013 vehicles, the standard is 30.5 mpg. In 2016, it rises to 34.1.

So comparing fuel efficiency in 2009 and now, there’s an increase of 11 percent -- not nearly double.

Poltifact.com ruled that the statement was FALSE.

Obama said the U.S. has "doubled the distance our cars will go on a gallon of gas," which clearly sounds as though cars on the road today are running at twice their earlier fuel efficiency. But he was comparing a real number with a projected one, a standard for vehicles manufactured more than a decade from now.

The statement was misleading and more importantly untrue. We rate it False.

Despite the falsehood in his State of the Union, the fact is that U.S. retail sales of gasoline are actually approaching levels that are about half of what they were four years ago.  This is something that you hear almost nothing about but it is something that I have been monitoring for the last year or so.  I wrote about this previously here and here last year.

Here is an updated chart reflecting U.S. Total Gasoline Retail Sales through December, 2012 that was just released by the U.S Energy Information Administration on Friday.  As to the specifics, in December, 2008, gasoline retail sales averaged 53.9 million gallons per day.  In December 2012, sales had dropped to 27.8 million gallons per day.  To put that in further perspective, in December 1997, consumption was 66.0 million gallons per day.

I find this to be an astounding chart and one that President Obama could have cited.  However, for a number of reasons, I am sure that this is not a statistic that he would like to reference.  It might get too much attention focused on why there has been such a precipitous drop in retail gasoline sales.

Some of this is undoubtedly due to better fuel efficiency.  PolitiFact estimates fuel efficiency has improved about 11% over the last four years.  However. that would only explain about 1/10 of the decrease in gasoline sales.  I don't know that anyone can fully explain with specificity why this precipitous drop has occurred.  However, I think that the biggest contributors to the decrease in gasoline consumption have been the increased price at the pump and the economy.  These are two issues that President Obama would like to avoid discussing.

Consider the changes between December, 2008 and December, 2012.

Unleaded Reg. Gas        December, 2008  $1.65    December, 2012  $3.33

Unemployment                December, 2008  7.2%      December, 2012  7.8%

Labor Participation Rate   December, 2008  65.8%  December, 2012  63.6%

There are a lot less people on the road commuting to work, making sales and service calls and making deliveries.  I have noticed it in my commute to work in the morning. There are definitely fewer cars on the road when I drive into downtown Cincinnati than there were four years ago.  I used to be looking at a long, slow bumper to bumper trip if I didn't get going before 7am.  That is no longer the case.  In looking at the statistics, there are also a lot fewer personal trips driving trips taking place as well.

Despite all of this, the latest rumor is that President Obama is thinking about making approval of the Keystone XL pipeline project contingent of the passage of a carbon tax.

Count both me and Jazz Shaw of Hot Air as not understanding the logic behind this.

The timing certainly is curious – assuming you slept through the last decade that is – but the national appetite for a carbon tax doesn’t seem to be there, thankfully. With the price of natural gas remaining low and availability high, combined with discoveries of increasing domestic oil deposits, people in a struggling economy can see the benefits waiting in the wings. Businesses who provide most of the jobs in the country are paying attention as well.

Not only is the national appetite for a carbon tax not there, the country's appetite is not there for gasoline either when you look at the numbers above.  It would seem that the President has already been very successful in limiting carbon emissions by looking at retail gasoline sales.

Why would we need a carbon tax when President Obama's policies have already provided the same result?  He just doesn't want to admit it.  The last four years could be called "The Disappearing Gas Act".