Why America Is Losing Its Gas Guzzling Ways

CNBC

A fundamental and dramatic shift is happening in America when it comes to our addiction to gasoline. We're slowly but steadily cutting back on our gas guzzling ways. This doesn't mean we're going back to the days of the horse and buggy. But make no mistake, the amount gasoline we consume is dropping and the implications go well beyond the auto industry.

"We are seeing a modest sea change in America's gas consumption patterns," said Tom Kloza, chief oil analyst with GasBuddy.com. "There's not any one factor behind it, but several factors. I think we've seen the peak in U.S. gas consumption."

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For the record, that peak came in 2008. Since then, there has been a steady, though not huge, decline in the amount of gas used in America. Currently, gasoline consumption is down about 25 million gallons per day compared to last year.

So what's driving the change? Here are several factors

More Fuel Efficient Vehicles

The latest data from the University of Michigan shows the average fuel economy of new vehicles sound in June was 24.7 miles per gallon (mpg). That is down one tenth of a gallon from the recent high of 24.8 mpg. Since the University's Transportation Research Institute began tracking average fuel economy in 2007, the average fuel economy of new models sold in the U.S. has increased 18.7 percent.

The main reason for that is the increase in CAFE standards that will require the fleet of vehicles sold by each automaker to achieve 34.1 mpg by 2016 and 54.5 mpg by 2025. The result has been an explosion in cars and trucks that are far more fuel efficient due to the use of turbo charged engines and other technology that makes the vehicles go further on a gallon of gas. The consumer is eating it up, and this trend is expected to continue for the foreseeable future.

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Americans Foregoing Cars

Strange as it may seem to many of us who couldn't wait to get out first car, there is a growing number of people in the U.S. who have decided they don't want to own a car.

According to CNW Marketing, the percentage of U.S. homes without a car has hit an a recent high of 9 percent. As recently as 2006, just 5 percent of the U.S. households opted for not having a vehicle.

What's changed? The recession forced a lot of people to get rid of their car or truck. There's also been explosive growth in car-share companies over the last five years. Also, America is becoming more urban and more people are living in cities where they can use mass transit, bike share programs, or simply walk to get what they need. Bottom line: More people are saying they don't need a car or truck.

Telecommuting and on-line Shopping are Growing

Gone are the days when it was unusual to know someone who worked at home. Thanks to higher quality, less expensive telecommunication systems it's becoming more common for American worker to telecommute. In 2000, the U.S. Census Bureau found 3.3 percent of the population telecommuted. By 2010, it was up to 4.3 percent.

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Meanwhile, traffic at shopping centers has edged lower. It's not a huge drop, and when Americans hit the shopping mall or local store, the amount of money they are spending on that particular trip has increased. Some of this change is due to the growth in on-line shopping. It's a shift in American society that many believe is permanent.

Fewer Miles, Greater Implications

The drop in gasoline consumption has potentially huge implications for America's economy. One example involves gasoline tax revenues for state and local municipalities. This is the primary source of funding for maintaining roads, highways, and bridges. As gas consumption drops, so does the revenue states are collecting. It's the reason some states are considering a user fee for electric vehicles.

(Read More: Charge 'er Up! Tesla Offers Battery Swap )

And that's just the start.

Gasoline fueled America's incredible growth in the 20th century and it's still the primary driver of life in this country. We're just learning to use less of it.

-By CNBC's Phil LeBeau . Follow him on Twitter @LeBeauCarNews .

Questions? Comments? BehindTheWheel@cnbc.com .



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