Though America takes a bold step to sharply increase fuel economy standards to reducing the country’s reliance on imported oil, the full benefits however may not be felt for at least another 25 years.Analysts called the plan to require motor company fleets to average 54.5 miles per gallon (mpg) by 2025 a brave move, but ultimately it may only offset the impact of a rising population on oil consumption, rather than slashing total demand.US oil consumption totals more than a fifth of global demand at around 18 million bpd, with around 11 million of that taken up by transport fuels like gasoline and diesel, those seen as the hardest to reduce reliance on due to the lack of easily viable alternatives“It’s a bold plan - it’s like ‘let’s go to the moon’,” said Sarah Emerson, president of Energy Security Analysis Inc. (ESAI) in Massachusetts.“But there’s a lot more to this that needs to be worked out than just picking a number. The number implies a huge increase in the number of electric, hybrid and diesel cars in the vehicle fleet.”The 54.5 mpg requirement would far exceed the current average, which is less than 30 mpg. It would also rise sharply from the initial target of 35.5 mpg by 2016.President Obama said the new rules would lower the country’s oil use by 2.2 million barrels per day (bpd) over next 15 years and described it as “the single most important step we’ve ever taken as a nation to reduce our dependence on foreign oil”.But that is less than a quarter of the roughly 9 million barrels of crude oil the United States imports every day, and does not account for a growing population.High prices have already started to weigh on US fuel consumption. with international crude prices above $115 a barrel and on course to average more in 2011 than they ever have before, including 2008 when prices spiked toward $150.US oil demand in May was down 2.46 per cent from year ago levels, the Energy Department said earlier this week, falling by 464,000 bpd to 18.363 million bpd. Timothy Evans, an analyst at Citi Futures Perspective in New York, said the US fuel efficiency plan could ensure that kind of drop becomes the norm in the coming years. “This could introduce 2-3 per cent decline in US gasoline demand as an annual trend,” Evans said.“I’m tempted to pencil in its start date as this year given the numbers we’re seeing, but really we should be looking at two to three years before the first standards are introduced in 2016.
From / Gulf Today