BP CEO: Gas Demand Peaked in '07
NEW YORK -- Gasoline demand in the U.S., which has been hit hard by the recession, will never return to 2007's peak, BP PLC Chief Executive Tony Hayward said in a report by The Wall Street Journal.
Contributing to his prediction of lessened demand is greater use of biofuels and increased engine efficiency, according to the report.
"We will never sell more gasoline in the U.S. than we sold in 2007," Hayward said in an interview with Dow Jones and The Wall Street Journal.
U.S. Department of Energy (DOE) data show consumption of gasoline fell 3.2 percent in 2008, from a peak average of 9.3 million barrels a day in 2007. A slight uptick from 2008 is expected in 2009, the report stated.
In 2007, BP sold an average of 1.57 million barrels a day of gasoline products worldwide, but 2008 sales fell 4.6 percent, according to the company's annual reports as cited by The Journal.
Hayward's comments echo other industry experts' views. Daniel Yergin of IHS Cambridge Energy Research Associates, who authored "The Prize," a history of the oil business, has said U.S. gasoline demand peaked in 2007. And Chevron Corp. Chief Executive Dave O'Reilly said in a recent earnings call that the company has chosen to focus investment on the Pacific Rim, where economies are expected to grow, according to the report.
The use of fossil fuels to power vehicles has declined in the U.S. as a result of the economic downturn, greater engine efficiency, increased use of gasoline-electric hybrids and requirements to include larger amounts of ethanol and other biofuels in the fuel mix, according to the report.
As fossil fuel's share diminishes over time, "we're going to be in the biofuels business," Hayward said in the report.
The energy company is already working on developing biobutanol, a plant-derived fuel with higher energy content than ethanol, as well as cellulosic ethanol, which is made from non-food plants, the newspaper reported.
"We believe we'll figure out how to make that commercial within the next five years," Hayward said in the report, noting a tall species of grass called miscanthus shows promise as a non-food feedstock for biofuels.
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Contributing to his prediction of lessened demand is greater use of biofuels and increased engine efficiency, according to the report.
"We will never sell more gasoline in the U.S. than we sold in 2007," Hayward said in an interview with Dow Jones and The Wall Street Journal.
U.S. Department of Energy (DOE) data show consumption of gasoline fell 3.2 percent in 2008, from a peak average of 9.3 million barrels a day in 2007. A slight uptick from 2008 is expected in 2009, the report stated.
In 2007, BP sold an average of 1.57 million barrels a day of gasoline products worldwide, but 2008 sales fell 4.6 percent, according to the company's annual reports as cited by The Journal.
Hayward's comments echo other industry experts' views. Daniel Yergin of IHS Cambridge Energy Research Associates, who authored "The Prize," a history of the oil business, has said U.S. gasoline demand peaked in 2007. And Chevron Corp. Chief Executive Dave O'Reilly said in a recent earnings call that the company has chosen to focus investment on the Pacific Rim, where economies are expected to grow, according to the report.
The use of fossil fuels to power vehicles has declined in the U.S. as a result of the economic downturn, greater engine efficiency, increased use of gasoline-electric hybrids and requirements to include larger amounts of ethanol and other biofuels in the fuel mix, according to the report.
As fossil fuel's share diminishes over time, "we're going to be in the biofuels business," Hayward said in the report.
The energy company is already working on developing biobutanol, a plant-derived fuel with higher energy content than ethanol, as well as cellulosic ethanol, which is made from non-food plants, the newspaper reported.
"We believe we'll figure out how to make that commercial within the next five years," Hayward said in the report, noting a tall species of grass called miscanthus shows promise as a non-food feedstock for biofuels.
Related News:
New Jersey Franchisees Sue BP Over Lease Agreements
BP Joins fuelperks! Rewards Program