With yesterday’s report that November US industrial production contracted at the fastest rate since 1982, it appears US fossil fuel consumption will continue to fall. This will lower prices of the fuels and make goals such as 1990 emissions by 2020 much more easy to imagine us achieving. We were almost 16% above 1990 levels in 2007. But by the end of next year I project emissions will be less than 12% above 1990 levels based on the EIA data I discuss here. If we can keep our renewable energy industries healthy during the coming year, they will be poised to enable emissions reduction through economic growth in 2010+ rather than the mostly recession-induced emission drops of 2008-09. They can emerge with much lower costs as the prices of major components such as polysilicon, steel, and copper fall from recent highs.

Tomorrow will be full of news. I’ll report on the US oil inventory report and also begin to explore a growing trend of lower electricity consumption around the US. If lower demand persists it would have major implications for emissions and help lower the need for new carbon dioxide-belching power plants in the future.

These oil prices are hurting people all over the US everyone as we witness some of the fastest inflation in a generation on energy and food prices. Some good news came in the EIA weekly oil report on US supplies. Crude oil, gasoline, distillates, and propane all increased significantly. Overall, inventories remain historically low, but this report may help to contain oil prices through next week barring a big supply disruption or dramatic fall in the dollar. The main reason for the good results was a 350,000 (3.8%) drop in gasoline demand from this week last year as drivers go for efficiency and jump on mass transit. Amtrak reported even more ridership growth as June had 12% more passengers than last year. Many are wondering if 2007 was the peak in US gasoline consumption, and I certainly hope so — it would help the climate and our wallets.

The last bit I would like to mention is the serious oil crisis in the developing world. While we in the US don’t have the splendor of exporter oil riches these days like Saudi Arabia, the UAE, Kuwait and Russia — we don’t face the fuel shortages of many in Pakistan, Zambia and other poor non-producing countries. Our pain at the pump, which lowers our ability to watch every summer blockbuster in theaters, pales in comparison to what many countries face who are having to cut back on basic services. For instance, the Marshall Islands is reeling from its increased fuel bill for electricity production, and may face blackouts in coming months unless it is able to borrow significantly. Pakistan is borrowing from Saudi Arabia to keep its blackouts from getting even worse. Our lower oil consumption may move us over the course of a year from consuming ~25 barrels per person to ~24 barrels (down ~4%) by trading in our SUV for an efficient sedan. But most people around the world see lowered demand starting from ~5 barrels per person through blackouts that prevent fans from cooling them on hot summer nights or machines at hospitals may cut off when patients need them most. The more we can accelerate efficiency in appliances and development of renewable sources, the better we will be equipped to fight global poverty and empower all economies to thrive.

In positive news, a report was just released which notices significant drops in road fatalities as gas prices rise and people drive less. As long as we can handle the transition, such benefits can combine with other environmental and public health benefits to make us better off in the end.

If prices stay at current levels between $130 and $140 per barrel, the report predicts an additional cost for US airlines of $30 billion in 2008. Recent changes in air travel including fees for checked baggage, current fuel surcharges, and charging for drinks and food will only raise a few billion dollars, leaving a huge mismatch between higher costs and revenue. They add that if predictions of $200 oil come true, airline service could contract up to 35% in the near future.

This contraction in airline travel will mean a reduction in greenhouse gas emissions, but to prevent losses in standard of living we will have to help provide more fuel efficient travel methods and improve communication technology so that long distance face to face meetings can be reduced. The US House took a step in the right direction when they responded to above-$4 per gallon fuel with a $15 billion allocation to Amtrak. A transition to independence from foreign oil and climate responsibility will require an acceleration of investment into the most efficient infrastructure possible: sending federal dollars to rail, incentives for the Big 3 automakers to lead the plug-in hybrid electric vehicle revolution and the construction of safe sidewalks and bike lanes rather than trying to expand an airport that may actually see future reduction in traffic in the years ahead.