HMM: Millennial Behavior Is About To Make Fools Of Peak Energy Demand Theorists.

Start with the peak-driving proposition that’s been so eagerly advanced over the past half-dozen years. Here, wishful thinking aside, recent trends are unequivocal. America’s affection for cars is far from over.

Over the past couple of years, the data show travel on America’s roads has been growing at a record pace. By year-end 2016 road travel had hit an all-time high, north of 3.2 trillion vehicle-miles. Gasoline demand has followed apace, also hitting new highs. So much for peak driving.
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What about the housing market? This sector lags automotive by a couple of years. Houses cost more and take longer to build than cars, but Millennials are starting to buy, rather than continue to share or couch-surf. They already make up over 40% of home buyers. This shouldn’t be surprising. As LendingTree CEO Doug Lebda has noted about Millennials: “I mean, you can’t obviously buy a house without a good job.” And the data show that “starter” homes for Millennials are nearly as big as the average sized home already owned by boomers. What does this imply about average home size as, in due course, Millennials move up market? Do we need to note that bigger homes consume more energy?

Here’s a prediction, given that homes are responsible for nearly 40% of the nation’s electricity consumption: As Millennials have kids and buy houses, the past eight years of flat electric demand will soon follow the same upward curve seen in road-miles. And imagine what happens to household electric meters if automakers finally make affordable and useful electric cars. But without regard to Tesla and its wannabes, peak electric demand is very unlikely.

Student debt loads, the Great Recession, and income stagnation created a situation where Millennials haven’t yet had the opportunity to spend like Boomers and GenX have. I suspect that their P.C. hosannas to the environment are masking a lot of pent-up demand.

The time to start building that Dyson Sphere was yesterday.