The Reign of EVs? An Economic Analysis from Consumer's Perspective

Traditionally, petroleum (oil) has been the main source of energy for the U.S. national economy and transportation sector. In 2010, 83% of all the energy required by the United States was provided by fossil fuel sources. The energy use in the United States can be divided into four broad sectors: transportation, residential, commercial, and industrial. The transportation sector accounts for 28% of the total energy demand, and 96% of the energy used in this particular sector comes from fossil fuel. Based on records for 2011 and 2012, to satisfy these energy requirements, the United States needs to import, on average, 337,143 Mbbl (1 Mbbl = 1,000 oil barrels) of crude oil and ?petroleum products per month. Nearly 70% of the imported oil is allocated to the transportation sector to satisfy the fuel demands of cars, trucks, airplanes, and marine transport. Figure 1 shows the petroleum flow in the United States in millions of barrels per day. The high U.S. dependency on foreign oil together with the continually increasing price of oil and its derivatives have encouraged the national policy of reducing oil dependency by promoting carbon fuel (gasoline) displacement in the transport sector.