Reality Arithmetic

ExxonMobil recently completed a study that projects the number of light-duty vehicles worldwide will grow 50% to 1.2 billion by 2030, with two-fifths of the increase in China.  Most will need gasoline.  This means competition for global oil supplies will intensify.

Current global oil demand is roughly 90 million barrels per day.  So what is the plan and where is the strategic thinking headed?  How are we thinking in the U.S. about global gasoline consumption in 2030?  Maybe a stiffer gasoline tax to cut consumptions?  Dream on, although a higher gasoline tax helps to fix the "Big Half Dozen" - - from cutting our debit to climate change to infrastructure investing to energy security.  What about expanding supplies - - dream on again.  Production is down 200,000 barrels per day in the Gulf of Mexico alone.

But we have a strategic vision and a secret weapon.  It's called the Chevy Volt.  By 2015 we want one million plug-in electric hybrids on the road.  First year sales of the Volt are projected to maybe hit 25,000 units.

Assume that one million of us drop $40,000 for a new Volt - - how many oil tankers are we turning away from our ports?  The answer is not many - - the one million Volts would cut oil consumption by roughly 40,000 barrels a day (on the other hand, coal miners and electric companies are going to love the Volt).  This is out of a 19 million barrels per day U.S. consumption base.  The one million Volts - - we have 240 million cars and light trucks on the road today.  Almost all of them are filling up at a gas stations.

Sometimes public policy, strategic thinking, and reality need to meet over a good round of arithmetic.