Call it energy economics 101:  When President Biden announced plans to address record gasoline prices, now topping $4 a gallon, it was meant to fix a severe supply-demand imbalance that has gripped global energy markets since Russia’s invasion of Ukraine.

There’s just one problem, however.  The release of 1 million barrels per day (mbd) from the nation’s Strategic Petroleum Reserve over the next 180 days will add only 1% to the global oil supply.  With Russian exports down by about 3 mbd, or 3% of the global supply, the U.S. and its European oil-trading partners still have a big gap to fill.

But as the International Energy Association (IEA) reminds us in a new report, sometimes the best way to raise yourself out of a hole is to stop digging.  With that in mind, the IEA has come up with a 10-point plan that focuses on the demand side of the equation.  All told, these simple energy-saving tips could shrink global oil demand by 2.7 mbd in just four months and bring the global oil market roughly back into balance by the end of the summer.  If achieved, these IEA savings would be equivalent to eliminating all of the oil demand from cars being driven in China.  

But how many of these 10 tips can we apply, practically, here at home?  We take a look below.  As a spoiler alert, none of IEA’s short-term recommendations address solar energy directly.  But they all are money savers that could help lay the foundation for a switch to solar for home energy use and personal transportation needs.

Source:  International Energy Agency, A 10-Point Plan to Cut Oil Use, March 2022

Driving Less, Driving Smarter

For those already schooled in energy economics, it shouldn’t come as a surprise that most of the IEA’s 10-point savings plan focuses on changing personal driving and commuting habits.  In the U.S., nearly nine out of every 10 passenger-miles traveled comes inside a car or light-duty truck.  This light-duty fleet accounted for 58% of all transportation-related greenhouse gas emissions, and 17% of total U.S. GHG emissions, in 2019.

Now, transportation is the only major sector where greenhouse gas emissions are still rising.  Since aggressive driving habits can drag down fuel efficiency by 10% to 40%, and driving faster than 50 mph can significantly lower gas mileage, the IEA leads off with these fuel-saving recommendations: 

• Reduce highway driving speeds by at least 10km/hr (6.2 mph):  This idea harkens back to the energy crisis of the 1970s, when U.S. highway speeds were cut from 70 to 55 mph.  While driving at this lower highway speed adds nearly an hour of driving time from White River Junction to Boston and back, it also saves about $10 in gas costs (assuming that the vehicle’s fuel economy rises from, say, 20 to 25 mpg, and gas prices are pegged at the current national average of $4.19 per gallon).
• Make more use of buses and trains, and promote walking and cycling:  Granted, our neck of the woods makes walking and cycling more of a recreational pursuit than an everyday means of getting around.  Local transit buses are also great for those who have ready access to their routes, but they go largely underutilized even though transit is free.  When it comes to finding the most economical way to Boston or New York, however, taking the bus or the train is still the best bet.  Public transit also does a far better job of shrinking your carbon footprint than driving there at 70, or even 55, mph!

Between driving slower and less often, the IEA estimates that global oil demand could be cut by 800,000 barrels of oil a day (kb/d) over the next four months.  Add in “car-free” Sundays and alternating days of personal vehicle use in major metropolitan areas, and the IEA finds another 305 kb/d of oil savings in its 10-point plan.  

More efficient delivery and trucking methods could yield an additional 320 kb/d in oil savings, bringing the transportation-related total of these items to just over half of the 2,700 kb/d in savings targeted under the plan.

Sharing the Ride, Working from Home

The single-biggest set of savings in the IEA plan comes from adopting more carpooling and car sharing arrangements, which represent 30% of all vehicle miles traveled in the United States.  This could be a heavy lift, however, since three-quarters of American commuters now drive to work alone.  In 1980, carpooling peaked at 19.7%; now it’s only 9%. 

While the vehicle occupancy rate in America has fallen to only 1.5 passengers per mile, our near-empty cars have gotten 24% heavier (due to SUV market share growth), have gained 90% more horsepower, and go from 0 to 60 mph 37% faster than passenger cars sold 30 years ago (from 1989 to 2019).  That’s another reason why transportation is now the top greenhouse-gas emitting sector in the United States, having surpassed electric power in 2016.  

With this in mind, the IEA recommends clamping down on unnecessary commuting and business travel to achieve nearly half of the savings identified in its plan:

• Work from home three days a week:  Better than carpooling is not having to commute to work at all!  The IEA estimates that 170 k/d of oil savings could be realized for each day that commuters in the global workforce opt to work from home; three days a week would save 510 kb/d.
• Avoid business air travel where alternative options exist:  Before the pandemic, about one-fifth of all passenger trips by plane in advanced economies were for business purposes.  That fell practically to zero in 2020; business travel has yet to fully recover.  Choosing more Zoom meetings instead of long plane flights could save another 260 kb/d, or about 10% of all oil savings identified in the IEA plan.  

Switching to EVs… and to Solar?

So where do EVs and solar power fit into the IEA’s plan?  They don’t get as much attention because, as a practical matter, there’s only so much you can do to accelerate the adoption EVs and solar power in just four months!  Still, the IEA sees possible oil savings of 100 kb/d from greater deployment and utilization of the EVs over the summer.  (Solar power is not factored into these calculations.)

Maybe the best news in the IEA’s short-term plan are the long-term trends underlying it.  Electric vehicle sales were already surging before this report came out.  For example, in 2021, EV sales more than doubled worldwide, rising to a record 9% share of new car sales.  With more than 8.4 million EVs now on the road, demand continues to rise, spurred on by rising gas prices, plummeting battery costs, and continued government support.

Rounding out this trifecta of smarter driving habits and expanded EV purchases is falling prices for solar power – a game-changing combination that could break our transportation addiction to fossil fuels in the next 20 years or so.  

Finally, with respect to solar power, costs continue to drop ahead of schedule.  When the U.S. Department of Energy (DOE) announced its SunShot Initiative in 2011, its aim was to reduce solar energy costs by 75% by 2020 to make it cost competitive with other energy options.  In 2017, DOE announced that its 2020 goal of utility-scale solar at $0.06/kWh had already been met, three years early.  Now, the 2030 goal of $0.03/kWh is within reach, making solar power cheaper than electricity from any fossil fuel energy source.

With 71% of Americans worried about the future price of gasoline (up from 40% two years ago), this IEA report is a timely reminder that cutting gasoline demand does just as good a job as boosting oil supply to bring gas prices down.  This is especially true in the short term…

… And in the long term – or whatever term you choose – adding EVs powered by solar energy can break this transportation tie to fossil fuels forever!  

Solaflect is your home energy management partner.  We help you install clean and affordable solar electricity and home battery systems for a more resilient and climate-friendly future.  Check out the rest of the Solaflect Energy website for more information, or email us or call (802) 649-3700.