In the early ’80s, VMT (moving 12 months total) stayed below the previous peak for 39 months. Currently VMT (moving 12 months total) has been below the previous peak for 48 months – a full 4 years – and the trend shows no sign of reversing any time soon.

Could it be that the all-time peak in vehicle miles traveled (VMT) in the U.S. – August 2007 – is now securely behind us?

In Oregon, vehicle miles traveled (VMT) was down 0.4% in November 2011 compared to November 2010. Cumulative VMT for 2011 is down 2.0% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

With VMT down, it’s not surprising that Americans continue to consume less gasoline. Total petroleum deliveries fell 1.1% in November compared with November a year ago, pulled down by a 1.8 percent decline in motor gasoline demand.  It was the lowest level of November consumption for gasoline since 2000.

Total petroleum deliveries fell 1.2% to an average of 18.9 million barrels a day in 2011 compared with 2010. Except for 2008, this was the largest drop in annual domestic deliveries over the past decade.

If petroleum deliveries are any indicator, VMT will prove to continue to drop in December 2011 – and substantially. December 2011 petroleum deliveries were down 5.9% from December 2010, declining to an average of 18.6 million barrels per day, the lowest level in 15 years. The Federal Highway Administration’s report for December can be expected confirm that VMT for 2011 as a whole is down over 2010.

Brent crude, the world oil benchmark, averaged $111 per barrel, breaking the previous record of an annual average high of $100 set in 2008. That spike contributed to a huge global recession. West Texas Intermediate (WTI) rose even more, averaging $95/barrel, an increase by 20% over its 2010 average price of $79. WTI traded at a hefty discount to world oil prices throughout the year – as much as $26/ barrel.

Global automotive market intelligence firm Polk forecasts worldwide new vehicle sales in 2012 will rise 6.7% over 2011 volumes  to 77.7 million vehicles. Polk expects China to make the largest contribution to global sales growth for new vehicles, with an anticipated 16% increase over 2011.

Polk expects that U.S. light vehicle sales will increase by 7.3% to 13.7 million vehicles. As this chart by Calculated Risk shows, sales are struggling to return to levels reached almost two decades ago, when the U.S. population was ~50 million less than today.

Polk is optimistically forecasting U.S. auto sales to return to “normal” levels of greater than 16 million vehicles per year by 2015 – and for global auto sales to approach 100 million by 2016.

Where is the gasoline to power all these new cars going to come from? Despite record high global oil prices, global oil production is refusing to budge. Members of the Organization of the Petroleum Exporting Countries (OPEC) – which supply ~42% of global production – produced an average of 30.74 million barrels per day in December 2011.  OPEC production has been fluctuating within a ~5% band, as has global production.

Production of crude plus condensate has been basically flat since 2005, with new sources just barely managing to compensate for a 5% decline per year from existing production. Any increase in total liquids over that time has largely come from increases in NGPLs and other liquids.

Total liquids production worldwide increased 0.5% per year from 2005 to 2010 – but that includes low net energy fuels such as biofuels. However, the global supply of net oil exports available to importers other than China and India (what Jeffrey Brown calls Available Net Exports, or ANE) fell at a rate of 2.8% per year from 2005 to 2010. Brown expects oil available for import by most of the world to fall by 5% – 8% each year for the rest of the decade.

In Saudi Arabia (now the world’s second largest oil producer after Russia), production has been declining.  Only a dozen or so of the 54 oil producing nations in the world are still increasing their oil production.

If global economic growth, feeble though it may be, manages to continue in 2012, we can expect even higher oil prices. Even if people are willing and able to pay higher prices, there are limits to global supplies of oil that can be refined into motor fuels. What good will all these new cars be, if there is not enough fuel to power them?

It’s a good bet that rosy forecasts for U.S. and global auto sales will prove to be powered by nothing more than fantasy.

In the early ’80s, VMT (rolling 12 months) stayed below the previous peak for 39 months. Currently VMT has been below the previous peak for 47 months – almost 4 years. And the trend in the rolling 12 months VMT is still down.

Could it be that the all-time peak in vehicle miles traveled (VMT) in the U.S. – August 2007 – is now in our rear-view mirror?

In Oregon, vehicle miles traveled (VMT) was down 2.7% in October 2011 compared to October 2010. Cumulative VMT is down 2.1% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

With VMT down, it’s not surprising that Americans continue to consume less gasoline. Total petroleum deliveries (a measure of demand) fell 1.1% in November compared with November a year ago, pulled down by a 1.8 percent decline in motor gasoline demand.  It was the lowest level of November consumption for gasoline since 2000.

Don’t expect 2012 to be any better. More likely, fuel will be getting even more expensive.

Brent crude will average near $111/barrel for 2011, even more than in 2008 when oil prices hit a peak of $147.50/barrel. Some analysts think oil prices will average a bit less in 2012, perhaps averaging $105/barrel. Others analysts predict that oil prices will be even higher than in 2011, projecting WTI (which have consistently been significantly lower than Brent this year) to average $100 per barrel next year, eclipsing 2011′s average of about $95/barrel. Oil-price.net projects WTI prices to be at $112 a year from now.

Nobody is expecting oil prices to drop, or at least not much. Here’s a big reason why: Saudi Arabia, the world’s lowest-cost producer, requires a price of $91/barrel just to break even.

The glory days of cheap gas are over for good. Our memories aren’t playing tricks: remember gas wars, gas at 19.9 cents a gallon? In my Fiat 850 Spyder – $2000 new, right off the lot, and 50 mpg – driving seemed virtually free. We were young and immortal, oil was infinite, and the world was empty and ours for the taking. There were no bounds, no limits. Vietnam and then the first gas crisis in 1973 were the first intimations that the imperial project – to stride over not just the nations of the world, but over Nature herself – was destined to go awry.

A few were prescient. Limits to Growth was published in 1972, foreseeing humanity bumping up against constraints to both sources and sinks by the first decades of this century. Way back in ’56, Shell geologist M. King Hubbard predicted that U.S. oil production would peak in 1970 – a prediction that proved spot on.

Porter Stansbury at The Daily Reckoning posts this chart showing “real wealth” per capita in the U.S. since the mid-’50s.

Note that “real wealth” in the U.S. peaked about the same time as U.S. oil production. Coincidence?

Stansbury measures “real wealth” using a standard commodity index (the CRB) up to 1975 and gold post-1975 (when gold began to trade freely). When peak oil arrived in the U.S., Nixon took the U.S. off the gold standard. With the U.S. kissy-face with the Saudis, the dollar became the petrodollar.

I’m not sure I would put a lot of faith into this measure of “real wealth” – but the correlation of peak wealth with peak oil is provocative. There’s no question that the U.S., indeed the entirety of Earth, has become a poorer, more degraded home for humans since 1970, despite decades of “growth” and “progress”. That degradation doesn’t even begin to show up in our accounts.

Around 1970, reality arose and smacked us across the face.  Humanity has been working through the range of responses – denial, anger, bargaining, depression, not yet acceptance – ever since.

The chart above, posted by Stuart Staniford at Early Warning, shows production of crude plus condensate has been basically flat since 2005. The meager increase over the last seven years in total liquids is largely coming from increases in NGPLs (hydrocarbons larger than methane removed from the natural gas stream), “other liquids” (biofuels, coal-to-liquids, gas-to-liquids, etc), and “refinery processing gains” (volume gains which occur in the refinery as heavier oils are cracked to lighter fuel products).

One economic consequence of stubbornly high oil prices in the U.S. is that people are driving less and less. Petroleum (gasoline and diesel fuel) consumption is well off peak 2007 levels, as seen in this chart posted by Mish Shedlock.

Vehicle miles traveled (VMT) in the U.S. has been in a down trend now for almost four years – an unprecedented occurrence.

Mish offers an explanation of what’s happening:

The best explanation for declining gasoline usage is that millions have dropped out of the labor force.

* * *

People have given up looking for work, entered forced retirement collecting social security, ran out of unemployment benefits, do more shopping online, or are simply too broke (or have less desire) to travel than before.

Don’t expect the economic exhaustion that is a consequence of peak oil to end any time soon. John Michael Greer this week warns that already, the future can’t pay its bills.

Over the last decade . . . crude oil prices have more than tripled; over the last decade, behind a froth of speculative booms and busts, the world’s industrial economies have lurched deeper into depression. Peak oil researchers have pointed out for years that the former trend would bring about the latter, but long after events proved them right, the connection still remains unnoticed by most people.

Given the reality of a collapsing economic superstructure, a quite rational response is to begin to ease your way out and re-engage in the household economy, where wealth is unreported and untaxed and cannot be siphoned off.

Bill McBride at Calculated Risk has this chart showing VMT back to 1971.

McBride observes the current downward trend in VMT is unprecedented:

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 46 months – so this is a new record for longest period below the previous peak – and still counting!

September VMT was below last year’s numbers for the seventh straight month.

In Oregon, vehicle miles traveled (VMT) was down 0.7% in September 2011 compared to September 2010. Cumulative VMT is now down 2.0% from 2010. VMT in Oregon has been down every month in 2011 compared to 2010.

Indications are VMT in the U.S. continued to fall in October and November. Platts reports U.S. retail gasoline demand fell 4.5% year-on-year for the week ending November 18; the four-week rolling average was down 3.8% from the same period last year. The average retail price of a gallon of regular gasoline was 18.1% higher than last year.

Falling VMT in the U.S. should not be a surprise. Driving is dependent upon the availability liquid fuels. Jean Laherrère reports global all liquids production has been on a bumpy plateau since 2005 around 87 Mb/d, with a variation of 2 Mb/d (which is equal to the accuracy of the data, about the difference between EIA, IEA or OPEC values). He has posted an updated graph of historic and projected production at The Oil Drum.

Laherrère expects this plateau to continue for a few years before a significant decline takes place. But recall, peak oil is not synchronous: the peak in oil consumption arrives earlier in some countries than in others. In the U.S., the peak oil consumption is clearly in our rear view mirror. That peak oil is manifested in declining VMT should be expected.

Automakers are now on pace to sell about 12.8 million vehicles for in 2011, up from 11.6 million last year.

Light vehicle sales are still poking along at levels typical of three, four, even five decades ago, and last seen two decades ago, as apparent in this chart, again from Calculated Risk.

In 1991, the population of the U.S. was 50+ million less than it is today – and there were 35 million fewer licensed drivers, as seen by comparing statistics here and here.

Auto sales have been on a downward trend for a decade now. Oil consumption in the U.S. has been on a downward trend since 2005.

The above graph, posted by Stuart Staniford at Early Warning, shows the EIA’s data since 2000 – both the weekly and the monthly series.  According to Staniford, the monthly series is believed to be more accurate, but the weekly series is more up to date. The weekly data is certainly noisier.

The downward trend in auto sales and oil consumption is consistent with the continuing downward trend in vehicle miles traveled (VMT). VMT in the U.S. reached a peak in January 2008 and has been trending downward now for almost four years.

Bill McBride at Calculated Risk posts this chart.

McBride observes the downward trend in VMT is unprecedented:

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 45 months – so this is a new record for longest period below the previous peak – and still counting!

In Oregon, vehicle miles traveled (VMT) was down 1.0% in August from August 2010. Cumulative VMT is now down 2.2% from 2010.

There are some indications that travel may have picked up a bit in September. After falling a revised 0.5% in August 2011, the American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index increased 1.6% in September.

However, the long-term trend in truck tonnage remains down from peak 2005 levels.

Also, the American Petroleum Institute reports total petroleum deliveries (a measure of demand) totaled 19.9 million bpd, an increase of 2.5% in September over September 2010.  While motor gasoline demand was up only slightly by 0.3%, distillate demand reached a record for the month.  On a year-to-date basis, gasoline demand was down 1.3% from 2010.

Oil output from fields in production declines by 5 per cent a year as reserves are depleted, so the world needed to add the equivalent of four Saudi Arabias or 10 North Seas over the next 10 years just to keep supply level, even before much of an increase in demand.

So how have we been doing at discovering new reserves? Not nearly good enough.

All the easy stuff has been found. We basically stopped finding conventional super-giant high production rate oil fields forty years ago.

Despite the best technology and soaring prices, each year the amount of new oil reserves discovered is a fraction of that found in the 1960s. Oil production flattened in 2004. In 2010 consumption exceeded production by over 5m barrels per day for the first year ever.

In the charts above, a large part of the difference between consumption and production is accounted for by such things as biofuels, oil made from coal and other non-conventional sources, which are not included in the production figures. The rest of the difference is from the running down of world oil stocks.

The questions now facing us are how long can global oil production be held on its plateau, and how fast will the subsequent decline be?

The stall in global oil production in the face of strong demand from less developed countries is having a profound consequence: while the Chindia  (China & India) region, and many other developing countries, have been able to increase their net oil imports, most developed oil importing countries, such as the U.S., are being forced, via price rationing, to take a declining share of a falling volume of Global Net Exports.

In the U.S., oil consumption has fallen by 10% since peaking in 2005. Less oil consumption translates into fewer car sales . . .

. . . and less driving.

Vehicle miles traveled (VMT) in the U.S. plateaued in 2005 and have been trending down ever since.

Oregon is no exception to the national trend. Vehicle registrations in Oregon peaked in 2007 . . .

. . .  and were down to 3.23 million in 2010.

Gasoline consumption in Oregon and Washington has been on a plateau since 1999.

Sightline reports VMT in Oregon and Washington have been on a gently declining plateau since 2002.

The trend should now be clear, in Oregon as well as the nation as a whole. The times of ever-growing traffic on our roads are over for good. Instead, our future holds declining fuel consumption, declining number of cars and trucks, and declining vehicle miles traveled.

It’s time to start planning for that, rather than for continued growth.

Bill McBride at Calculated Risk observes the downward trend in VMT is unprecedented.

In the early ’80s, miles driven (rolling 12 months) stayed below the previous peak for 39 months.

Currently miles driven has been below the previous peak for 44 months – so this is a new record for longest period below the previous peak – and still counting!

Gas prices are down from highs reached in spring this year, but are still significantly higher than a year ago – as seen in this chart made available by GasBuddy.

Crude oil prices have declined from highs reached earlier this year, but are still high enough to stifle economic growth (Bloomberg: as of 99/27/2011, WTI was trading at $84.45, Brent at $108.95). Gasoline prices appear to have room to decline, too. Crude oil accounts for about 55% of the price of gasoline. The chart shows WTI prices; however, gasoline prices in the U.S. are impacted more by Brent prices. While WTI briefly exceeded $112/barrel in April, Brent briefly broke above $127/barrel. WTI has become disconnected from global markets and the WTI/Brent spread has exploded, as seen in this chart from Bloomberg.

The American Trucking Association reports truck tonnage is down, too.

The American Trucking Associations’ advance seasonally adjusted (SA) For-Hire Truck Tonnage Index declined 0.2% in August after falling a revised 0.8% in July 2011. July’s decrease was less than the 1.3% ATA reported on August 23, 2011.  The latest drop put the SA index at 114.4 (2000=100) in August, down from the July level of 114.6.

This chart posted at Calculated Risk shows that freight tonnage has been on a downtrend since peaking in early 2005.

ATA Chief Economist Bob Costello observes while freight tonnage is down, carriers handling as much freight as they can – because trucking industry capacity has fallen.

“In part, this is due to less industry supply.  The number of trucks operated by the truckload industry is still down about 12% from the height in late 2006, yet tonnage levels are about the same as in late 2006. Additionally, most carriers are finding it very difficult to hire new truck drivers, which mean they can’t add too many trucks.”

VMT in Oregon was down 2.1% in July 2011 from July 2010, and is now down 2.4% for the year.

What if the recent down trend in vehicle miles traveled is not a fluke, but rather the manifestation of a new reality brought about by peak oil and its resultant economic impacts? Oregon’s planning assumes continued growth. Travel demand forecasting is driven by population and employment forecasts, assuming a positive correlation (if not a causal relationship) between population and employment growth and growth in travel demand. If that assumption is no longer valid, we will be wasting billions of precious dollars on unneeded highway white elephants, such as the Columbia River Crossing (or, in Evan Manvel’s words, the extremely risky and costly CRC highway mega-project).