ROSEMONT, Ill. -- Describing millennials and the younger Gen Z consumers as having low drive may apply less to motivation as to how little they will be driving going into the future.
Describing the trends behind the evolving fuels landscape, John Eichberger, executive director of NACS’ Fuel Institute and vice president of government operations for NACS, told convenience-store retailers and suppliers at the NACS State of the Industry (SOI) conference that changing consumer behavior as well as evolving vehicle technology will contribute to continuing demand destruction going into the future.
Fuel demand in general is down 4%, Eichberger said, citing data from the U.S. Energy Information Administration (EIA), with projections out to 2030 putting demand down 22%.
“That’s one out of every four fillups that will be gone,” he told the group of about 500 attendees at the event in Rosemont, Ill.
He described “fundamental factors” that will influence fuel demand. Here are several key trends:
- Vehicle fuel efficiency. He said vehicles are averaging 45-54 miles per gallon, a historic high.
- Rates of adoption for new fuels will continue to be sluggish. Several barriers have inhibited the growth of alternative fuels as a significant part of the nation’s fuel consumption, among these being logistical flaws in current regulations, the high cost of technology and even auto dealers who would rather sell a gas-fueled car that’s on the lot than a hybrid that would take two weeks to arrive on order.
- Population shifts. Significant demographic changes such as the rise of women in the workplace and an overall population boom have supported past spurts in gasoline demand. Such trends are no longer on the nation’s horizon.
- Younger people are driving less. Statistically, teenagers and young adults are getting their driver’s licenses later and don’t have the same desire to own and operate a car as older generations, he said.
In terms of the impact of alternative fuels on the market, Eichberger said significant barriers including regulation, infrastructure and technology have prevented many alternative fuels—everything from ethanol to electricity—from increasing their share of the nation’s fuel consumption.
Eichberger did suggest that hydrogen fuel cell technology is on his radar. That’s because major auto makers have committed significant dollars into the development of that technology. In theory, the result would be the ability to fuel a car in three-to-five minutes, allow that car to run 500 miles and zero emissions, as the burned-off byproduct would be water.
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