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Oil Industry Squeezed as US Demand Tanks

By Matt Cantor,  Newser Staff

Posted Apr 13, 2009 6:57 AM CDT
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(Newser) – Big oil execs, analysts, and government sources say a century-old American tradition is waning: after years of increasing oil consumption, US guzzling has peaked, they believe. Last year, demand plunged 7.1% for gas, diesel, and jet fuel—the biggest drop since 1950, when dependable records began. And major changes for the oil industry mean big changes for government budgets and consumers alike, the Wall Street Journal reports.

An array of factors are behind the drop in demand: gas is being burned more efficiently,   Americans are buying hybrid cars, and biofuels are replacing gas. Meanwhile, government measures are pushing consumption “down, down, down,” says an analyst, and many consumers are driving less. Among the effects: refineries and gas stations are closing down, and with less money from the gas tax, government branches are struggling to maintain roads.

A line of cars forms for gas Monday, Sept. 22, 2008, in Atlanta.
A line of cars forms for gas Monday, Sept. 22, 2008, in Atlanta.   (AP Photo/Kate Brumback)
A customer pumps gas at a gas station in Menlo Park, Calif., Thursday, Feb. 12, 2009.
A customer pumps gas at a gas station in Menlo Park, Calif., Thursday, Feb. 12, 2009.   (AP Photo/Paul Sakuma)
In this July 31, 2008 file photo, a customer holds a gas pump handle at an Exxon station in Vancouver, Wash.
In this July 31, 2008 file photo, a customer holds a gas pump handle at an Exxon station in Vancouver, Wash.   (AP Photo/Don Ryan, file)
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COMMENTS
Showing 3 of 4 comments
wwwonderer
Apr 14, 2009 3:39 AM CDT
Well said. But I must make a slight correction to one of your statements. They made Billions in RECORD-SETTING profits. No need to tax them then. No need to tax them now.
AdaptAndOvercome
Apr 13, 2009 12:08 PM CDT
Big Oil is whining about our roads and the country losing on tax revenue. Please. They are whining because GW and his party left office and they have no one to cover their lies and deception for the American people. The excesive spending of the Republican Party created the shortage in funding for programs like road repairs. In Texas- gas stations are going up quicker than schools. The fancy ones with McDonalds and KFC's attached.
AdaptAndOvercome
Apr 13, 2009 12:05 PM CDT
What a crock. They made Billions in profits under GW and now they are whining. The prices have only fallen in the last 4-6 mos. and they say the lack of tax revenue is what is creating the problem with road repair funding. We didn't just wake up people. The lack of funding came from all the cut backs of funding to states, not solely from the gas tax. In Texas, gas stations are opening up almost on every corner- the fancy ones with a McDonalds or KFC attached. Big Oil is just upset because their cash cow GW and his party are no longer in office to cover their lies and deception for screwing the American people out of money.

Gas prices rise 10 cents over 3 weeks
Reuters

Ethanol producers face trouble, too
Houston Chronicle

Money • Green

 
oil • biofuel • oil companies • gas stations • oil industry • gas consumption • oil demand

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