Reducing demand is the best response to OPEC’s oil production cuts
To increase world oil prices, OPEC and its oil-producing allies announced plans earlier this month to cut crude production. The countries will soon be pumping 2 million fewer barrels per day.
In the United States, leaders on both sides of the aisle are incensed. Strong measures have been proposed — everything from retaliation against Saudi Arabia to a ban on exports of crude oil, and even the rollback of environmental safeguards that some people say hamper America’s ability to ramp up oil production.
But what if the strongest step we could take to ease the sting of higher oil prices and to defang OPEC had nothing to do with increasing oil supply but rather curbing demand?
The reason that a relatively small drop in oil production (2 million barrels a day is equivalent to only 2 percent of global oil production) can have such an outsized impact on prices is because many of us feel as though we have few options to reduce the amount of oil we use. After all, big changes such as buying a more fuel-efficient car take time and planning. Oil producers know that for now, we’ll pay more at the pump, so they feel free to charge more.
But most of us have more choices to reduce oil use than we realize. By collectively making smart choices to reduce our demand, we can reduce the pain of high oil prices and take control over our energy destiny.
Think about what it would take to reduce your personal oil consumption by 2 percent. That’s equivalent to avoiding one out of every 50 car trips you make each month — or sharing that ride with a friend or family member. For most of us, that’s doable.
In response to global energy market disruptions following Russia’s invasion of Ukraine, the International Energy Agency (IEA) published a 10-point roadmap to reduce worldwide oil demand. The IEA found that the 10 actions, if adopted across the world’s “advanced economies,” could cut oil use by 2.7 million barrels a day — which would compensate for OPEC’s planned cuts, and then some.
Most of the steps are just common sense. Carpooling for one out of every 10 car rides and doing basic things to increase fuel efficiency, such as keeping appropriate tire pressure and cutting down on air conditioning use, would save 470,000 barrels of oil per day — about one-quarter of the OPEC production cuts. Allowing people who can work from home to work remotely three days a week would make up for another quarter of the planned production cuts. Temporarily boosting access to public transportation, cycling, walking and “micro-mobility” technologies including scooters and e-bikes would make up for another 15 percent of the cuts. Additional steps, such as reducing air travel, could close the rest of the gap.
Beyond saving us money, reducing oil consumption would make our lives better in other ways — delivering cleaner air, easing traffic congestion and making our cities and towns more livable.
All of us have the ability to reduce oil consumption to some degree, but we could make an even bigger difference with government support. Expanding transit service, reducing or waiving fares, or helping people find carpool partners can all help in the short term. But even a simple appeal for conservation from our leaders could go a long way.
We already know that increasing oil supplies won’t eliminate our vulnerability to price spikes. Over the last decade, America has emerged as the world’s largest producer of oil. The problem is that we’re also the world’s largest consumer. Nearly 50 years after the first oil embargo, OPEC still has us over a barrel. And it will continue to do so until we find a way to make our demand for oil less insatiable.
America has the tools to respond to oil supply cuts. Smart conservation, adopted on a large scale, can help us lower the price of oil without more drilling. Saving energy will put us, rather than foreign actors, back in control of our energy system. The power is in our hands.
Matt Casale is the director of environment campaigns for U.S. PIRG, a public interest advocacy organization that speaks out for a healthier, safer world in which we’re freer to pursue our own individual well-being and the common good.
Tony Dutzik is associate director and senior policy analyst at Frontier Group, a public policy organization that provides information and ideas to build a healthier, more sustainable America.
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