Oil Has Lowest Share of US Transportation Since Era of Steam Trains

Oil has the lowest share of the U.S. transportation fuel market since the 1950s, when steam trains remained a common sight on American railroads.

While petroleum-based products still make up more than 90% of U.S. transport fuel demand, the share taken by ethanol, gas and electricity has more than doubled since 2000, highlighting the growing challenge to the dominance of oil in the world’s largest economy.

The U.S. Energy Information Administration said in a report May 12 that non-petroleum sources of energy used in U.S transportation rose last year to 8.4%.

“The share of fuels other than petroleum for U.S. transportation has increased to its highest level since 1954, a time when the use of coal-fired steam locomotives was declining and automobile use was growing rapidly,” EIA said.

The inroads that non-oil energy sources are making is one of the biggest changes in America’s automobile culture, immortalized by Hollywood movies such as Rebel Without a Cause and American Graffiti.

The dominant role oil plays in transport means that even small changes in market share are important for exporting nations such as Saudi Arabia and companies from Exxon Mobil Corp. to Royal Dutch Shell. The changes also affect the world’s largest carmakers, such as General Motors Co.

As ethanol, natural gas and biomass make slow inroads, oil’s global share in transportation will fall to 85% by 2040 from 93% in 2013, according to the Paris-based International Energy Agency’s World Energy Outlook.

More efficient cars, particularly in highly populated emerging countries such as China and India, also are weakening the link between oil and driving, EIA said.

For the time being, non-oil energy sources still struggle to compete with gasoline and diesel due to high costs for electric cars.

“As in other fields, technology breakthroughs or a big fall in cost could lead to a more rapid uptake of new vehicle and fuel technologies,” EIA said.