FUEL VOLUME CONSUMPTION VS. GAS PRICESNational and State Level Comparisons

NATIONAL COMPARISONSJanuary 2014-December 2015

National ComparisonsJanuary 2014-December 2015

U.S. Fuel Volume Consumption increased from 177,664,360,438 to 181,889,783,922 gallons – a 4,225,423,484 or 2.40% increase

Overall, a 4 billion or 2.4% is not that large of a difference

U.S. Gas Prices had an average decrease of $0.93 or -27%Average gas price in 2014 was $3.442

Average gas price in 2015 was $2.510

From 2014-2015, Fuel Volume Consumption Increased, while Gas Prices Decreased

*Excess of crude oil supply over demand

Correlation Slight, weak inverse relationship between fuel volume consumption and gas prices

Index of Determination The value indicates that 0.88% of the variation in fuel volume consumption can be explained by the relationship between gas prices and fuel volume consumption. Therefore, gas prices have little to no effect on the overall fuel volume consumption in the United States.

National Fuel Volume Consumption vs. Gas Prices

$ 4.000$ 3.500$ 3.000$ 2.500$ 2.000

1.6000E+10

1.5500E+10

1.5000E+10

1.4500E+10

1.4000E+10

1.3500E+10

1.3000E+10

Gas Prices

Fuel

Volu

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onsu

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Scatterplot of Fuel Volume Consumption vs Gas Prices

National Fuel Volume Consumption vs. Gas Prices

A straight line indicates almost 0 correlation

STATE LEVEL COMPARISONSJanuary 2014-December 2015

Correlation

Index of Determination The value indicates that 0.36% of the variation in fuel volume consumption can be explained by the relationship between gas prices and fuel volume consumption.

Conclusion: There is no correlation.

California Fuel Volume Consumption vs. Gas Prices

Correlation

Index of Determination

The value indicates that 0.47% of the variation in fuel volume consumption can be explained by the relationship between gas prices and fuel volume consumption.

Conclusion: There is no correlation.

Colorado Fuel Volume Consumption vs. Gas Prices

Correlation

Index of Determination

Conclusion: There is a slight inverse relationship between fuel volume consumption and gas prices in the state of Florida.

21.44% of the change in fuel volume consumption can be explained by the relationship that fuel volume consumption and gas prices in Florida have.

Florida Fuel Volume Consumption vs. Gas Prices

Correlation

Index of Determination

The value indicates that 0.03% of the variation in fuel volume consumption can be explained by the relationship between gas prices and fuel volume consumption.

Conclusion: There is not a correlation between fuel volume consumption and gas prices.

Massachusetts Fuel Volume Consumption vs. Gas Prices

Correlation

Index of Determination

The value indicates that 0.94% of the variation in fuel volume consumption can be explained by the relationship between gas prices and fuel volume consumption.

Conclusion: There is not a correlation between fuel volume consumption and gas prices.

Minnesota Fuel Volume Consumption vs. Gas Prices

Correlation  Index of Determination

Conclusion: There is a very slight, weak inverse relationship between fuel volume consumption and gas prices in the state of New York.

3.69% of the change in fuel volume consumption can be explained by the relationship that fuel volume consumption and gas prices have in the state of New York.

New York Fuel Volume Consumption vs. Gas Prices

Correlation  Index of Determination

Conclusion: There is a very slight, weak inverse relationship between fuel volume consumption and gas prices in the state of Ohio.

1.17% of the change in fuel volume consumption can be explained by the relationship fuel volume consumption and gas prices have in the state of Ohio.

Ohio Fuel Volume Consumption vs. Gas Prices

Correlation  Index of Determination

Conclusion: There is a slight inverse relationship between fuel volume consumption and gas prices in the state of Texas.

22.67% of the change in fuel volume consumption can be explained by the relationship that fuel volume consumption and gas prices have in the state of Texas.

Texas Fuel Volume Consumption vs. Gas Prices

Correlation  Index of Determination

Conclusion: There is a very slight, weak direct correlation between fuel volume consumption and gas prices.

1.98% of the change in fuel volume consumption can be explained by the relationship that fuel volume consumption and gas prices have in the state of Washington.

Washington Fuel Volume Consumption vs. Gas Prices

Texas and Florida

Texas

Florida3.753.503.253.002.752.502.252.00

1250000000

1200000000

1150000000

1100000000

1050000000

1000000000

950000000

Gas Prices

Fuel

Vol

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Cons

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Texas

4.03.53.02.52.0

775000000

750000000

725000000

700000000

675000000

650000000

Gas Prices

Fuel

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Florida

Texas:

Florida:

4.03.53.02.52.0

1300000000

1200000000

1100000000

1000000000

900000000

800000000

700000000

600000000

500000000

400000000

Gas Prices

Fuel

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FloridaNew YorkTexas

States

Fuel Volume Consumption vs. Gas Prices

Texas = Highest Fuel Volume Consumption out of 3 Most Correlated States (TX, FL, NY)

PROJECTIONS

2009 2010 2011 2012 2013 2014 2015 2016 2017-2-10123456789

767880828486889092949698 Forecast

World Liquid Fuels Consumptionmillion barrels per day (MMb/d)

Change in U.S. consumption (right axis)Change in China consumption (right axis)Change in other consumption (right axis)Forecast

annual change (MMb/d)

Source: Short-Term Energy Outlook, July 2016.

Gas prices depend on cost of crude oil, demand &

many other factors. Motor gasoline prices are

expected to rise through 2040 by 11%.

U.S. fuel volume consumption will actually decrease over time (-21% through 2040) – “declines in energy consumption tend to

result from the adoption of more energy-efficient

technologies and policies that promote energy efficiency”

http://www.eia.gov/forecasts/aeo/pdf/0383%282015%29.pdf

“Gasoline consumption in the transportation sector in 2040 is 21% lower than in

2013. In contrast, diesel fuel consumption, grows at an average rate of 0.8%/year

from 2013-2040 as economic growth results in more shipments of goods.”

"Petroleum consumption in the US was lower in 2014 than it was in 1997, despite the fact that the

economy grew almost 50% over this period."https://www.weforum.org/agenda/2015/07/the-surprising-decline-in-us-petroleum-consumption

http://www.eia.gov/forecasts/aeo/pdf/0383%282015%29.pdf

Gas is a necessity – people need gas to live their daily lives (drive to work, school, grocery store, etc.)

The leveling off of fuel volume consumption has resulted in more than $150 billion that can now be spent on non-petroleum goods & services.

In certain states, gas prices have a larger effect on fuel volume consumption in comparison to national results, however this is not seen in all states that were analyzed.

Implications