Gas Dynasty: the Fuel Landscape Present, Future

Changing demographics, power of fossil fuels to drive energy outlook.

April 16, 2015

By Angel Abcede

CHICAGO – Describing Millennials and the even younger Generation Z consumers  as having “low drive” isn’t a swipe at their motivational level – it’s more about how little they will getting behind the wheel. 

Highlighting the trends behind the evolving fuels landscape, John Eichberger, executive director of the Fuel Institute and vice president of government operations at NACS, told participants at this week’s NACS State of the Industry Summit that changing consumer behavior as well as evolving vehicle technology will contribute to continuing demand destruction.

Fuel demand in general is down 4%, Eichberger said, citing data from the U.S. Energy Information Administration (EIA) with projections putting demand down 22% by 2030. “That’s one out of every four fill-ups that will be gone,” he said.

Eichberger described several “fundamental factors” that will influence fuel demand:

  • Fuel efficiency. Vehicles are averaging 45-54 miles per gallon, a historic high.
  • Rates of adoption for new fuels will continue to be sluggish. Several barriers have inhibited the growth of alternative fuels as a significant part of the nation’s fuel consumption, among these being logistical flaws in current regulations, the high cost of technology and even auto dealers who would rather sell a gas-fueled car already on the lot instead of waiting for a hybrid to arrive on order.
  • Population shifts. Significant demographic changes such as the rise of women in the workplace and an overall population boom have supported past spurts in gasoline demand. Such trends are no longer on the nation’s horizon.
  • Younger people are driving less. Statistically, teenagers and young adults are getting their driver’s licenses later and don’t have the same desire to own and operate a car as older generations.

In terms of the impact of alternative fuels on the market, Eichberger said significant barriers including regulation, infrastructure and technology, have prevented many alternative fuels—everything from ethanol to electricity—from increasing market share of the nation’s fuel consumption.

Eichberger did suggest that hydrogen fuel cell technology is on the radar. Major auto makers have committed significant dollars into the development of that technology. In theory, the result would be the ability to fuel a hydrogen fuel cell vehicle in three-to-five minutes and run 500 miles with zero emissions.

The NACS State of the Industry Summit is taking place this week in Chicago, the convenience and fuel retailing industry’s only event of the year where retailers gain the most comprehensive industry financial and operational metrics and consumer shopping behavior insights.

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