The Decline of Fossil Fuels Is Going to Be Expensive

Gasoline consumption in the US probably peaked in the years before the pandemic. It’s currently running about 5% below 2016-2019 levels, and with remote work seemingly here to stay, electric-vehicle market share rising rapidly and population growth awfully close to zero — along with shorter-term pressures such as record-high gas prices and a possible recession — it’s easier to envision more declines than a big rebound.

Here’s weekly gasoline consumption over the past decade, to give a better view of recent dynamics.

With that context, the fact that refinery capacity in the US also appears to have peaked just before the pandemic does not seem particularly alarming. Three barrels of oil makes roughly two of gasoline, so current refinery capacity of 17.9 million barrels a day of oil equates to about 12 million barrels a day of gas, or three million more than current consumption. The US still has more crude oil distillation capacity than it did in 2007, when gasoline consumption was higher than it is now.