Gasoline Demand To Grow Even As Thirstiest SUVs Shunned
By ROY R. REYNOLDS
Of DOW JONES NEWSWIRES HOUSTON -- Maybe not in Texas, the big-car capital of the world, but sport
utility vehicles across the U.S. are shrinking.
Sales of the largest SUVs - General Motors Corp.'s (GM) Suburban and Ford Motor Corp.'s (F)
Excursion - are in double-digit declines (the Excursion will reportedly exit the market after 2004
due to slow sales). The hot new SUVs are so-called "crossover" vehicles, based on platforms from
cars instead of trucks.
Yet even if the largest SUVs' declining popularity brings an increase in U.S. fuel economy, analysts
and observers expect the trend to have a negligible effect on U.S. gasoline demand.
"People getting out of a huge SUV and into just a large SUV isn't going to do much," said Kevin
Smith, editor in chief of Motor Trend magazine.
Analysts don't know precisely how the trend will affect fuel economy. But a 10% increase in the fuel
economy of new passenger cars and light trucks such as SUVs - assuming factors such as average miles
driven in a year - could save the U.S. a little more than 1 billion gallons of gasoline a year. As
new cars replace older ones on the road, the effect would be cumulative, increasing savings, said
John Maples, an analyst with the U.S. Department of Energy's Energy Information Administration.
But, Maples added, even that savings makes a dent of less than 1% in total U.S. gasoline demand,
which the EIA estimates was 8.844 million barrels a day in 2002.
Government analysts project U.S. gasoline demand will grow by 2.5% this year. Although trimming
demand growth would have some impact, the "take-back effects" of higher gas mileage would ensure
it's a small one.
"When cars get cheaper to drive, people drive more," Maples said.
The number of vehicle miles traveled has already risen in the last decade, despite declines in
fuel economy.
"There are more vehicles on the road, and people are just using their vehicles more," Maples said.
"You're kind of fighting an uphill battle."
Fuel Economy Remains Low Automobile engines are more efficient than those built a couple of
decades ago, though that efficiency has been directed toward horsepower instead of fuel economy
in recent years.
Add to that the demand for larger, heavier sport utility vehicles, and the result is the lowest
overall fuel economy in history, Maples said.
The average fuel economy among U.S. cars of all ages these days hovers around 22 miles per gallon,
according to the U.S. Department of Transportation's Federal Highway Administration. For new cars,
the fuel-economy average jumps to about 24.5 miles per gallon.
"From 1990 to 2000, there was scarcely any increase in fuel economy," said Geoff Sundstrom of the
American Automobile Association. "That had a lot to do with the emergence of trucks and SUVs as
America's best-selling vehicles."
For many consumers, Sundstrom said, the larger vehicles are necessary.
"Sometimes, an SUV is the only logical choice," he said. "SUVs have been demonized lately for their
low fuel mileage, but the reality is for many families, they take the place of a station wagon."
The largest of the SUVs may have already seen their heyday, even if that won't mean much to the
average driver. Consumers were beginning to abandon the largest trucks even before the preamble to a
U.S.-led war with Iraq made headlines, Smith said.
"I wouldn't call it a backlash, but people are certainly pulling away," Smith said. "If I can get
the kind of utility I'm looking for in a more efficient package, why wouldn't I want to?"
Among the hottest SUVs right now, at least in terms of buzz, are the Infiniti FX45, the Volvo XC90
and the Acura MDX. All three are based on car platforms and get close to 20 miles per gallon in
mixed driving.
Commitment to the SUV , however, will keep fuel-economy levels flat for the next five to 10 years,
according to EIA forecasts. Then, they may turn upward.
That's a little late for U.S. consumers, who are facing record-high gasoline prices these days, as
the national average fuel economy may have hit its nadir.
Conservation Takes A Back Seat The American Automobile Association, which issues a daily report
on U.S. fuel prices, said Thursday the national average price of regular gasoline at the pump
was $1.67 a gallon, slightly below the record high of $1.72 set March 18.
"We were pretty spoiled in the '90s," said EIA analyst John Cogan. "We had relatively low energy
prices in the last decade."
But prices at the pump and overall fuel economy just won't have that much pull on gasoline demand,
said Maples. It takes too long for new cars to raise overall fuel economy to create a true
inflection point in gasoline demand, he said.
"If you want to save fuel immediately, you have to just stop driving or use blended fuels, such as
with ethanol," Maples said.
Fuel additives such as ethanol extend gasoline supply by increasing the total amount of blended
gasoline produced. While some states such as California - the largest gasoline-consuming state - are
switching to ethanol from methyl tertiary butyl ether as an additive, only a nationwide adoption of
ethanol in gasoline would bring immediate, substantial savings, Maples said.
Drivers will continue lining up at the pumps, and many won't be in brand-new economy cars,
analysts said.
"When gas prices go up, we (gripe) and moan and cry, but we pay it," said Smith, of Motor Trend.
"It doesn't take a big move to get people griping, but it takes a big move to get them to change
their habits."
-By Roy R. Reynolds, Dow Jones Newswires; 713-547-9208;
[email protected]
Updated March 27, 2003 3:41 p.m.
"Don Quijote" <
[email protected]> wrote in message
news:[email protected]...
> STUPID UNNECESSARY VEHICLES
>
> This is an interview with Brutus Maximus, who drives an SUV...
>
> Reporter: What do you need that for?
>
> Brutus: I wanna be noticed...
>
> Reporter: Do you realize that you threaten the environment, others on the road as well as make
> wars for oil necessary?
>
> Brutus: Listen, I pay taxes so I don't care. Besides the war makes a nice TV show. It goes well
> with beer...
>
> Reporter: What do you think of a place like Holland where people get around by bicycle?
>
> Brutus: I take my bicycles in the back of my SUV, so what's the point?
>
> Reporter: What do you do with your spare time?
>
> Brutus: I drive the SUV...
>
> Reporter: Do you ever read?
>
> Brutus: Nah, I don't like to waste my time...
>
> Reporter: What do you think of the future of the world?
>
> Brutus: I never think about it...
>
> Reporter: Why do you fly an oversized American flag on your vehicle?
>
> Brutus: It makes me feel like a patriot...
>
> Reporter: Do you know that the whole world opposes the war?
>
> Brutus: Remember, they are a bunch of anti-Americans losers...
>
> Reporter: Any message for the troops?
>
> Brutus: Yeah, I want more shots of the Hummers hunting the enemy. Hit 'em hard!God Bless
> America!!!
>
>
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