Millennial Behavior Is About to Make Fools of Peak Energy Demand Theorists
There are a lot of policymakers and pundits hanging plans on the idea that the nation is facing a “new normal” rooted in ostensibly unprecedented behaviors exhibited by Millennials. Since that generation is now and will be for decades the largest share of the population, how they behave impacts everything going forward, especially for energy forecasters.
Nearly one-half of America’s total energy consumption is associated with just two things: homes and cars. We’re told that Millennials would rather bike and rideshare than own a car, and that they rather AirBnB or share a tiny urban apartment than buy a suburban house. If true, it’s a big deal not just for energy markets but also retailers and manufacturers; a permanent behavioral shift like that would give credence to the new trope of “peak demand.”
Start with the peak-driving proposition that’s been so eagerly advanced over the past half-dozen years. Here, wishful thinking aside, recent trends are unequivocal. America’s affection for cars is far from over.
Over the past couple of years, the data show travel on America’s roads has been growing at a record pace. By year-end 2016 road travel had hit an all-time high, north of 3.2 trillion vehicle-miles. Gasoline demand has followed apace, also hitting new highs. So much for peak driving.
It’s true that because of the Great Recession driving in the U.S. declined by....
Mark P. Mills is a senior fellow at the Manhattan Institute, a faculty fellow at Northwestern University’s McCormick School of Engineering, and author of Expanding America's Petroleum Power: Geopolitics in the Third Oil Era. Follow him on Twitter here.
This piece originally appeared in RealClearEnergy