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Oil conservation starts before fuel limits take effect

Bob Tippee
Editor

The problem with conservation as an aim of energy policy is that its strongest advocates wouldn't know it if it stared them in the face. It's staring them in the face now.

Until Congress passed the Energy Independence and Security Act of 2007, conservation represented half of any energy-policy initiative discussed in polite company. The other half was renewable energy.

Suggestions that the government do something on behalf of domestic supplies of oil and gas, for example, always sprung a rhetorical trap: What about conservation? What about renewables?

EISA enshrined the preference for conservation and renewable energy with toughened vehicle fuel-economy standards and lavishly increased mandates for biofuels.

Presto! Oil consumption is falling.

The American Petroleum Institute reported on Nov. 19 that total domestic petroleum deliveries in October were down 4% from their level of a year earlier. The year-to-date decline in this important measure of oil consumption was 5%.

The 19.6 million b/d consumption average for January-October was the lowest since 2000. The year-to-date rate of decline between this year and last was the largest since the early 1980s.

January-October gasoline deliveries were down 2.6% year to year.

This is conservation. This is what Congress wanted when it passed the EISA. The law must be working.

Well, not exactly. Those new fuel-economy standards that make everybody feel good about having acted on conservation don't take effect until 2011.

Conservation manifest in the API numbers reflects market responses to high prices and diminished economic activity. It's real conservation. People are using less oil than they did last year.

But conservation advocates will have trouble seeing it for what it is because the consumption decline didn't come about in direct response to law or regulation.

It should hearten them to know that the government contributed, nevertheless. Its fuel mandates, for example, imposed inefficiencies that hamper the economy and thus suppress oil consumption.

And it should delight conservation enthusiasts to know that, with US automakers pleading for bailout as new fuel-economy standards loom, and with strict climate-change legislation likely, more such recessionary goodness is on the way.

(Online Nov. 21, 2008; author's e-mail: bobt@ogjonline.com)


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