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Old 03-14-2013, 08:15 AM   #66
trademaster
 
Drives: 06 Maserati gran sport, 12 z06
Join Date: Mar 2012
Location: Detroit/NYC
Posts: 551
Quote:
Originally Posted by Captain Awesome View Post
Please DO NOT keep this in mind because it is actually incorrect.
Ehhh, it's actually 100% factual. I hope you read my whole post because you just might learn something if you pay attention.

Quote:
Originally Posted by Captain Awesome View Post
CAFE was enacted after the 1975 Oil Embargo as a way to force people to reduce consumption of imported oil.
No. CAFE was passed by Congress in 1975 after the 1973 embargo by OAPEC, Tunisia, Egypt and Syria. The embargo was an oil starvation tactic by the aforementioned countries in response to the United States' military-industrial support of Israel during the Yom Kippur War. In fact, numerous European (and Asian) countries denounced the actions of the United States because they did not want to suffer the economic backlash from the major oil producers in the region. CAFE was and still is intended to reduce the growth rate of oil demand to dampen the US economy from crashes based on natural or unnatural fluctuations in oil supply. The intention was to remove as much external petroleum-based manipulation of the US economy as possible. I'll revisit the emphasis on growth rate a little later.

Quote:
Originally Posted by Captain Awesome View Post
In 1975, the US imported about 15 Million barrels per day. CAFE was put into effect and completely failed in the stated objective. imports were up to about 18 million per day by 1978.
Neither of those figures are evenly remotely accurate. Those are total consumption figures and as variables exogenous to relavent consumption models, like population growth and increase in demand for automobiles, saw record growth in the short-term preceding those figures they are meaningless without comparing their growth relative to said variables. You also don't seem to know something extremely important -- CAFE standards, though enacted by Congress in 1975, did not take effect until 1978

Quote:
Originally Posted by Captain Awesome View Post
Consumption took a reduction back down to about 14 billion barrels a day by 1980 when the "Malaise" recession took hold. Over the next few years, the economy was booming again and consumption returned to the former levels and then continued to rise.

By 2025 the consumption rate is predicted to be 30 billion barrels per day (twice that of the consumption in the day when CAFE was imposed to reduce consumption).
First of all, again your numbers are way wrong. Global oil consumption is only projected to be in the 120 million bbl/day range by 2025. Not a small figure, but your numbers are literally impossible. Are you suggesting that US oil consumption would be lower had CAFE never been introduced? CAFE was intended to minimize the growth rate of oil demand effectively reducing market volatility, nobody expected it to actually stop or reverse growth, and based on any reasonable models it has contributed greatly to that goal.


Let me break down the numbers for you very clearly. Below are the figures for annual US oil consumption in million bbl/day from 1960-2010. These are figures from my firm's database so I can't link you to them directly, but feel free to check any of the consumption figures; they are accurate. I calculated the annual increase with a simple calculation in R, but again feel free to check them for yourself.

Yr Consumption Increase from previous year
1960 9.80 2.843%
1961 9.98 1.825%
1962 10.40 4.250%
1963 10.74 3.302%
1964 11.02 2.597%
1965 11.51 4.445%
1966 12.08 4.968%
1967 12.56 3.939%
1968 13.39 6.628%
1969 14.14 5.555%
1970 14.70 3.964%
1971 15.21 3.506%
1972 16.37 7.589%
1973 17.31 5.748%
1974 16.65 -3.784%
1975 16.32 -1.986%
1976 17.46 6.979%
1977 18.43 5.557%
1978 18.85 2.253% <<<< First CAFE regulations
1979 18.51 -1.773%
1980 17.06 -7.869%
1981 16.06 -5.852%
1982 15.30 -4.745%
1983 15.23 -0.422%
1984 15.73 3.247%
1985 15.73 0.005%
1986 16.28 3.524%
1987 16.67 2.361%
1988 17.28 3.710%
1989 17.33 0.242%
1990 16.99 -1.943%
1991 16.71 -1.617%
1992 17.03 1.909%
1993 17.24 1.197%
1994 17.72 2.793%
1995 17.72 0.036%
1996 18.31 3.297%
1997 18.62 1.701%
1998 18.92 1.594%
1999 19.52 3.183%
2000 19.70 0.931%
2001 19.65 -0.266%
2002 19.76 0.573%
2003 20.03 1.377%
2004 20.73 3.482%
2005 20.80 0.342%
2006 20.69 -0.552%
2007 20.68 -0.034%
2008 19.50 -5.718%
2009 18.77 -3.726%
2010 ** 18.93 0.839%


So, even including the external decrease in supply and resultant demand shift from the OAPEC embargo in '73-'75, the average annual growth rate of oil consumption from 1960-1978 before CAFE regulations began was 3.774%. That was the AVERAGE growth rate of consumption year-over-year. After CAFE regulations began in 1978, average growth rate of consumption has been 0.124%. Average growth of consumption after CAFE regulations has been less than 1/30th of the average growth rate before CAFE.

Since CAFE regulations began we have not seen one single year that has topped the AVERAGE growth rate of consumption before CAFE. Even if we used only the statistical outliers, the highest single annual growth rates since the first CAFE standards took effect, we would still be significantly lower than the average before CAFE standards. Population has grown, # of vehicles has grown, miles driven has increased massively, but consumption of oil is damn near equal to what it was the year CAFE first came into effect. That is success, my friend. So please tell me again how CAFE hasn't worked at all.

Last edited by trademaster; 03-14-2013 at 08:28 AM.
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