Editore"s Note
Tilting at Windmills

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April 9, 2006
By: Kevin Drum

GASOLINE UPDATE....Here's a Knight Ridder story about gasoline prices vs. gasoline demand:

Gasoline prices have reached $3 a gallon in some parts of the nation, and crude oil is hovering close to last summer's record high....[But] U.S. demand for fuel continues to grow. It was up by more than a full percentage point in March and is expected to climb still more when the peak-driving season begins in May.

.... Some states...have banned [a fuel additive called] MTBE....Many refiners, unable to sell in some states and fearing future environmental claims in others, are no longer putting MTBE in their gasoline, which could reduce the volume of the nation's fuel supply by about 1.6 percent, a large amount in a tight market.

....The American Automobile Association, however, thinks the MTBE issue is already driving up gas prices. "We're looking for some quantifiable data on that, but it does appear that it is having an effect," said Montill Williams, a national spokesman for AAA in Washington.

Two comments. First, if 1.6% is a "large amount," then we are indeed in a very tight market. This is probably due to both refinery capacity issues and fundamental oil supply issues.

Second, gasoline prices have doubled in the past few years and demand has continued to increase. It hasn't even leveled off, let alone dropped. I'm not opposed to higher gasoline taxes, but anyone who thinks gas taxes are good way to lower gasoline consumption had better be in favor of a whopping big one.

Kevin Drum 4:22 PM Permalink | Trackbacks | Comments (115)

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Comments

Drill ANWR!!!

Posted by: Don P. on April 9, 2006 at 4:25 PM | PERMALINK

Drill ANWR!!!

A long run for a short slide....

Posted by: Davis X. Machina on April 9, 2006 at 4:32 PM | PERMALINK

I understand all you lefties complain about U.S. oil consumptionl, but China really is the sleeping giant on this issue. So, what are the alternatives? Electric cars that are broadly competitive with gasoline or hybrid models are decades away. And significantly reducing our dependence on oil will mean increasing our dependence on other kinds of fossil fuel, or on nuclear energy, both of which have significant problems of their own. For instance, coal and natural gas produce greenhouse gases, just like oil. Nuclear power produces terrible waste products that will remain dangerous for tens of thousands of years, and carries especially large risks related to accidents and terrorism. Wind and solar power are not remotely competitive or effective for large-scale replacement of fossil-fuel or nuclear power plants. Hydroelectric is already tapped out. There will never be another large-scale hydroelectric project in the U.S.

What is YOUR solution for energy and eceonomic growth?

Posted by: Don P. on April 9, 2006 at 4:33 PM | PERMALINK

What are we doing in Iraq?

Let's invade Canada (again), Mexico (again) and Venezuela (a first AFAIK). Not only are the logistics much simpler, but Spanish and French are a lot easier to learn than Arabic.

Posted by: alex on April 9, 2006 at 4:34 PM | PERMALINK

Davis:

Even if ANWR doesn't prove to be the solution long-term, at least the U.S. actively seeking other sources of crude oil will keep OPEC on their toes - think of it as psyc-ops - I bet the day ANWR drilling legislation is signed, world crude oil prices drop 10%.

Posted by: Don P. on April 9, 2006 at 4:37 PM | PERMALINK

Let's have a whopping big tax on gas and, while we're at it, a 50% tax on the whopping big oil company PROFITS. We can plow that money into alternative transportation infrastructure and clean electricity generation. Will it hurt? You betcha, but we can pay now or pay a steeper price (economically, politically, and socially) later. What are we actually going to do? Stick our heads in the sand and hope the problem goes away.

Posted by: mike on April 9, 2006 at 4:40 PM | PERMALINK

Mike:

I would rather we find some other way to actually, you know, avoid a world-wide recession (or worse).

Posted by: Don P. on April 9, 2006 at 4:42 PM | PERMALINK

Much of the world pays 4 times as much at the pump for gas. Impose a 300% tax in the US (gradually of course).

Oil is running out. Start the transition to nuclear power NOW.

Posted by: Name on April 9, 2006 at 4:44 PM | PERMALINK

Gas prices haven't affected purchases of gas, yet. But the sales of gas-hog SUVs and trucks has dropped dramatically.

$3.00 gas is on the tipping edge, IMHO. At $3.50 or $4.00 people will not only be howling, but they will alter their behavior.

A slowly rising increase in the gas tax would be a good idea for a number of reasons:

- get the price clearly over the behavior-change threshhold on gas-hogs, ride-sharing or public transit for commuting and casual driving

- provide a better competitive environment for energy alternatives - wind, ethanol, etc.

- clearly signal to the world that the US won't be held hostage to oil in political relationships.

Any change in the gas tax, starting with $0.50 gal more, then $1.00, then 1.50, then 2.00, should be accompanied by tax credits for work commuting for low income workers.

The EU countries have much higher gas taxes, and they have much more efficient cars as a result. Send Detroit a message: get with the program on making the US less dependent on foreign oil.

Posted by: JimPortlandOR on April 9, 2006 at 4:48 PM | PERMALINK

About thirty years ago if the government had just issued some governmental fiat that we are now on the metric system, everybody would have had a great time barfing and bellyaching, and we'd now be on the metric system.

They should just do that with ethanol.

Posted by: cld on April 9, 2006 at 4:50 PM | PERMALINK

I suspect many people haven't altered their behavior because they think that gas prices will come back down. Oil companies are consipiring to price-gouge, dontchaknow.

The proper way to implement a gas tax is to add $.25/gal/yr for the next 20 years or so. This would allow people to adjust their behaviors in advance of substantially higher prices, minimizing the "economic dislocation".

Posted by: Tom DC/VA on April 9, 2006 at 4:53 PM | PERMALINK

Don P. at 4:33: but China really is the sleeping giant on this issue.

Don P. at 4:37 U.S. actively seeking other sources of crude oil will keep OPEC on their toes - think of it as psyc-ops - I bet the day ANWR drilling legislation is signed, world crude oil prices drop 10%.

All that ANWR oil is really going to curb the Chinese demand. Usually posters take more time between posts to contradict themselves.

Here's my suggestion. Make oil companies pay the full social, environmental and military costs for oil. That should start with paying full commercial lease rates for US owned drilling sites, but also includes maintaining pristine environents in ANWR (with steep penalties, say 10x costs of clean up), military costs for protection of shipping lanes and adventures such as Iraq, and the costs of pollution and greenhouse gases.

If energy markets were actually free markets, instead of a cartel, there might be some chance for renewable sources of energy. As it is, the whole world is bearing the external costs of the fossil fuel industry.

Posted by: Ray on April 9, 2006 at 4:54 PM | PERMALINK

cld, Hawai'i just went to a 10% ethanol requirement. We have no method of converting sugar cane waste to the stuff yet (I think that's called bagasse), of course, so we're having to import not only the oil which gets refined here, but now the ethanol additive as well. Our legislators have the brains of kumquats.

Did I mention we're pushing $3.00/gallon already?

Posted by: Linkmeister on April 9, 2006 at 4:55 PM | PERMALINK

Linkmeister - I grew up in Hawaii - third generation of a Scottish family.

Your problem is that you have the wrong technology - bagasse would be great with a steam powered trolley - and islands work just great with a hub and spoke transport system. Think of the health effects of making the passengers stoke the furnace too.

Posted by: Butch on April 9, 2006 at 5:05 PM | PERMALINK

PUSHING $3.00/gallon? Hell, we're PULLING that right now. Stop yer whinin.

Posted by: Don Hosek on April 9, 2006 at 5:06 PM | PERMALINK

Linkmeister,

10% is a good start, but it's 90% too little. We need a massive conversion program, everywhere, all at once.

Not saying it wouldn't be hard to do, but it would get everyone pulling in the same direction --away from the Middle East. And Texas.

Posted by: cld on April 9, 2006 at 5:08 PM | PERMALINK

Maybe gasoline is still pretty cheap.

When it comes to elasticity of demand, all we know is that the rise from $1.50 to $3.00 per gallon didn't curb demand. But don't assume that this is a continuous phemonenon. Maybe there is a tipping point (forgive me the cliche), a price above which demand starts to drop sharply, and above which fuel-efficient cars become appealing.

Aren't Hummer sales down already? Maybe we just need still higher prices.

Posted by: Hal Grossman on April 9, 2006 at 5:13 PM | PERMALINK

Current British prices for gas (what we call petrol in the UK) are 91 pence/litre. In US terms that's about 6 bucks a gallon (today's spot rate US $1.74 = 100 pence UK). More than half of that is tax. Our raw fuel prices are pretty much the same as yours.

Our cars here aren't much more efficient than US cars; engineering technology is worldwide and any good fuel-saving ideas rapidly spread through the industry. We do have more small cars and a lot more very efficient diesel-engined cars but fewer hybrids. What we don't have is lots of high-mileage drivers who commute fifty miles each way each day, partly because of the fuel costs and partly because people don't like spending two hours a day unpaid getting to and from work. If people have to travel for long periods they typically use public transport and read newspapers or books while someone else does the driving.

Posted by: Robert Sneddon on April 9, 2006 at 5:13 PM | PERMALINK

I'll go for a whopping big one! And get the teenyboppers off the road.

Oh, and offer a big award for the person who discovers the next breakthrough in alternative fuels. A true sign of presidential leadership would involve such encouragement, by the way.

Posted by: Hedley Lamarr on April 9, 2006 at 5:19 PM | PERMALINK

Don P wrote: "I bet the day ANWR drilling legislation is signed, world crude oil prices drop 10%."

LOL.... Oh man, I'd take that bet, any amount you care to name. Do you have any idea how long it will take to get any significant amount of oil out of the ANWR fields after that legislation is signed?

Posted by: PaulB on April 9, 2006 at 5:19 PM | PERMALINK

I bet the day ANWR drilling legislation is signed, world crude oil prices drop 10%.

Are you arguing that markets are irrational and prone to misprice goods-- even fungible goods like commodities? It would be a HUGE market failure if drilling in the Alaskan Wildlife Refuge affected oil prices, because supplies would be in no way changed.

Any change in the gas tax, starting with $0.50 gal more, then $1.00, then 1.50, then 2.00, should be accompanied by tax credits for work commuting for low income workers.

Why not tax credits for relocating to homes that are closer to their place of work, which may be more expensive?

Posted by: Constantine on April 9, 2006 at 5:22 PM | PERMALINK

Opening ANWR will have virtually no effect on global oil prices. I'm guessing it will be +- 2 dollars one week after. So you're on Don P. Saudi Princes and commodity traders aren't idiots.

I've always preferred MTBE. It's a beautiful tracer for leaking underground storage tanks and less toxic than gasoline. Without it we still get the gasoline leaking out but we just don't notice. It's cost rides with natural gas -- so it won't necessarily make gas cheaper, just marginally increase the supply.

As an alternative to fossil fuels I'd suggest conservation. At our current rate of energy consumption growth the earth would eventually be brighter than the sun (come year 6000). Efficiency will be the major industrial innovation from here on out.

Posted by: toast on April 9, 2006 at 5:22 PM | PERMALINK

Sounds like we'd better start bombing Iran.


Posted by: Ross Best on April 9, 2006 at 5:23 PM | PERMALINK

What we don't have is lots of high-mileage drivers who commute fifty miles each way each day, partly because of the fuel costs and partly because people don't like spending two hours a day unpaid getting to and from work.

Well, unless you live near Oxford, and you have to put up with the bastards from London who, like Californians, have moved out to the scenic hinterlands, jacked housing prices through the roof and out of the reach of the average local, and then proceed to drive every f*cking day to and from London, where they get paid twice the prevailing wage.

Bitter? Nah. I say, make it 3 a litre. Then watch.

Posted by: Mike on April 9, 2006 at 5:31 PM | PERMALINK

PaulB:

Do you have any idea how long it will take to get any significant amount of oil out of the ANWR fields after that legislation is signed?

I've heard about ten years. Now, check back on the year the Democrats first started blocking drilling in ANWR.

Constantine:

Are you arguing that markets are irrational and prone to misprice goods-- even fungible goods like commodities? It would be a HUGE market failure if drilling in the Alaskan Wildlife Refuge affected oil prices, because supplies would be in no way changed.

Oil prices are drastically altered by psychological factors unrelated to supply. Practically every day. As one example, Iraq's oil supplies and damages to its facilities have caused changes in price and created concerns about shortages, despite the fact that oil from Iraq was largely embargoed for years with little ill effect in the world market.

The fact is, ANWR oil, no matter how much there is or isn't, is doing no damn good to anyone sitting in the ground.

Posted by: tbrosz on April 9, 2006 at 5:33 PM | PERMALINK

Here's a website, Tell Bush,

http://tellbush.infogami.com/

Tell him what you think! It starts with what Harry Taylor told him,

"You never stop talking about freedom, and I appreciate that. But while I listen to you talk about freedom, I see you assert your right to tap my telephone, to arrest me and hold me without charges, to try to preclude me from breathing clean air and drinking clean water and eating safe food. If I were a woman, you'd like to restrict my opportunity to make a choice... ("I'm not your favorite guy... go ahead") about whether I can abort a pregnancy... What I wanted to say to you, is that I, in my lifetime, I have never felt more ashamed of, nor more frightened by, my leadership in Washington, including the presidency, or the Senate. ("No, let her speak") I would hope, I feel like, despite your rhetoric, that compassion and common sense have been left far behind during your administration. And I would hope, from time to time, that you have the humility and the grace to be ashamed of yourself, inside yourself... I also want to say I really appreciate the courtesy of allowing me to speak... That is part of what this country is about."

Posted by: cld on April 9, 2006 at 5:38 PM | PERMALINK

Mike
Let's have a whopping big tax on gas and, while we're at it, a 50% tax on the whopping big oil company PROFITS.

All of those big oil companies are publicly owned, which means you can buy stock in them. I do. I have. My 401K is heavily invested. My index stocks are. I hold shares directly.

Stop being such a moron and whining about how someone else made a profit off of your stupidity. Rather than endless complaining, buy into the company. form a voting bloc and argue for good governance of the company.

Now to take it a bit further, I'm really interested in buying into the ethanol technology. That's going to grow big, I think. But most of the key players at the moment are privately owned. Bummer.

Posted by: Red State Mike on April 9, 2006 at 5:39 PM | PERMALINK

Relax.

When prices go up, that means that the Invisible Hand will reach into your pocket, and put your money into the pockets of an Oil Company CEO.

Who will then, wisely invest that money in increasing the production capacity of his company in order to gain market share from competitors.

That is why, ever since oil began to climb from around $20/bbl in 2000 to $60/bbl in 2004, oil companies have been scrambling like mad to build more refineries.

(not).

Posted by: Democrats on April 9, 2006 at 5:39 PM | PERMALINK

For all you "Drill ANWR" fans, here's a simple bet:

For every percentage point the estimates of how much oil is under ANWR are off, car fuel efficiency standards must be raised 1 mpg.

Thus, if there is 16 billion barrels under there, as drilling advocates are always pointing out, no big deal. If it's only 8 billion barrels, as some industry estimates put it, car fuel efficiency standards go up by 8 mpg.

Fair enough?

Posted by: Derelict on April 9, 2006 at 5:44 PM | PERMALINK


"Sounds like we'd better start bombing Iran."

Wouldn't it make more sense to bomb China into oblivion?

That way we could use their share of the oil.

Posted by: bombsaway on April 9, 2006 at 5:48 PM | PERMALINK


We might consider actually being a good neighbor to Venezuela instead of acting all snotty because we think they stole their oil from us.


Posted by: jayarbee on April 9, 2006 at 5:49 PM | PERMALINK

Electric cars that are broadly competitive with gasoline or hybrid models are decades away. ...
Posted by: Don P. on April 9, 2006 at 4:33 PM | PERMALINK

. . . and how long have the oil industry robber barons been fighting this technology?


I would rather we find some other way to actually, you know, avoid a world-wide recession (or worse).
Posted by: Don P. on April 9, 2006 at 4:42 PM | PERMALINK

How about maybe by not borrowing $9 Trillion to fund security operations for the oil industry?

Posted by: osama_been_forgotten on April 9, 2006 at 5:49 PM | PERMALINK

Wouldn't it make more sense to bomb China into oblivion?
That way we could use their share of the oil.
Posted by: bombsaway on April 9, 2006 at 5:48 PM | PERMALINK

But then who would we buy our bombs from?

Posted by: osama_been_forgotten on April 9, 2006 at 5:56 PM | PERMALINK

osama_been_forgotten: How about maybe by not borrowing $9 Trillion to fund security operations for the oil industry?

Communist.

But then who would we buy our bombs from?

Our bombs are made in the good ol' US of A. Perhaps you're confusing them with every other manufactured product.

Posted by: alex on April 9, 2006 at 5:59 PM | PERMALINK

"Wouldn't it make more sense to bomb China into oblivion?"

What does China have to do with Armageddon?

Posted by: Ross Best on April 9, 2006 at 6:03 PM | PERMALINK

US gasoline usage dropped significantly between 1979 and 1982 or so, and prices only went up about 40% in real terms. There are two main differences between then and now. First, there was a recession. Second, there was an expectation that oil prices were going to keep going up forever.

I believe that there is a gradual realization that although gas prices will fluctuate, they are going to fluctuate at a higher level than previously. I expect that to have a very significant effect on consumption going forward.

I don't particularly want to encourage a recession, not that we won't eventually get one, but I would favor a gradual but long-term escalation of the gas tax precisely because it would make it clear even to the somewhat dim that oil isn't going to get cheap again, thus encouraging new car purchasers to anticipate higher fuel prices, while not immediately hammering people who own cars purchased under the old price regime.

Posted by: matt wilbert on April 9, 2006 at 6:08 PM | PERMALINK

Hedley Lamarr:
"I'll go for a whopping big one! And get the teenyboppers off the road."

30 years ago I went to a high school in a small town in northern Wisconsin...It was a new school with a large parking lot for faculty and students..
On a busy day there may have been 30 cars (mostly
faculty) in that parking lot.
Today there is no room in that parking lot nor on the side streets of the school to park a car...

It would be simple to pass a law that says no one under the age of 21 is allowed to have a drivers license much less own a car...but somehow I think that the biggest outcry would come from adults (parents like us) who would have our lives interfered with by having to actually provide some type of alternative transportation for the kids...
We would have to become more involved in their lives....we would have to become more responsible...

Posted by: tank man on April 9, 2006 at 6:11 PM | PERMALINK

jayarbee:

We might consider actually being a good neighbor to Venezuela instead of acting all snotty because we think they stole their oil from us.

Don't know about the oil, but Venezuela certainly does seem to be stealing the infrastructure for getting it out of the ground from various nations, including that glorious and enlighted Friend To All The World, France.

Of course, nationalizing the property of international investors is pretty much right near the top of the People's Paradise checklist, so it's hardly unexpected.

Posted by: tbrosz on April 9, 2006 at 6:12 PM | PERMALINK

You can drill ANWR until it looks like swiss cheese, bomb Iran until the sands turn to glass, and wring every drop of oil out of the Alberta shale, and all you'll do is postpone the day of reckoning by a century or two.

So nuclear looks inevitable at this point. A few centuries down the road, most people will think nothing of tolerating low levels of radiation on a permanent basis as the price for continued economic growth.

Myself, I just can't see how we will sustain the economic growth levels we've come to expect over the last 500 years unless we figure out a way to mine the rest of the solar system for raw materials...

Posted by: dr sardonicus on April 9, 2006 at 6:15 PM | PERMALINK

Draconian fuel economy measures on cars (10+ MPG over the next 3 years) and massive gas taxes (a couple dollars per galon, with some exemptions for things like school districts and government agencies). The tax revenue goes to build public transportation in and between cities.

Oh, and encouraging people to walk or bike somewhere every so often might not be a bad idea, either.

Posted by: phleabo on April 9, 2006 at 6:21 PM | PERMALINK

Oh, oh!...I have an idea! Let's continue bickering about the drop in the bucket and last wilderness on earth that is ANWR.

*sigh* Arguing that we need to drill ANWR so we can use its oil is like arguing that an alcoholic needs to sell the last of the family jewels to purchase a teaspoon of rum. Unless we are investing in alternate, sustainable energy sources and providing incentives to wean Americans off oil, we are just postponing the inevitable painful crash.

We need higher gas taxes and a modern Manhattan project to identify alternate, sustainable energy sources. We also need competent leadership at the top, someone who has the ability to learn new approaches and who isn't suckling at the bosom of Big Oil.

Posted by: PTate in MN on April 9, 2006 at 6:31 PM | PERMALINK

Mike's a liar, there are more people from Oxford driving London house prices up than there are people from London driving Oxford house prices up. The people he's talking about are from everywhere *except* London, and they're pouring in from all over the country, to the extent that water supplies in the south east are becoming unable to cope with the demand.

As it happens, though, I agree with him on the solution. Employers prefer to exploit the opportunity to sit in the middle of a gigantic labour market, like a spider in a web of capital, than re-locate somewhere where they'll have to accept whatever the local labour market offers in the way of employees (and accept their wage demands too). The pollution and overcrowding they impose on Londoners is an externality they don't have to deal with, and won't until they're made to. Correcting the unrealistically-low cost of personal transport is critical to stopping the insane inrush of in-commuting incomers from the suburbs.

Posted by: derek on April 9, 2006 at 6:35 PM | PERMALINK

One of the biggest problems is that our cities are built all wrong for the coming non-cheap energy era: tons of suburbs at too low a density to support public transportation in any efficiency. Even if we got our collective head out of our ass and decided to deal with the inevitable, we'll have to tear down and rebuild most of our urban areas to make it work.

WRT electric cars, it occurred to me recently that our family's second car could easily be replaced with som sort of all-electric peanutmobile. I almost never use that car for trips over 80 miles, and I'm nearly always either alone or have just one passenger. A plug-in thing like this would be great for me. The problem is they aren't being produced in quantity, so you have to pay prototype-style pricing for them. If they were closer to $10,000 instead of $100,000 they'd make a lot of sense for me.

Posted by: jimBOB on April 9, 2006 at 6:52 PM | PERMALINK

tbrosz wrote: "I've heard about ten years."

Close enough.

"Now, check back on the year the Democrats first started blocking drilling in ANWR."

If it had any relevance to the point that Don P. was making or the point I was making, I would. Since it doesn't, forgive me if I don't bother.

Reading comprehension is still a problem for you, I see.

Posted by: PaulB on April 9, 2006 at 7:02 PM | PERMALINK

I don't know that our cities, per se, are built wrong (some are worse than others) so much as our lifestyle is built wrong.

If you make it much more expensive to live outside the city (or nearby towns) people will move and companies will relocate. See, we let the market take care of things - conservatives will love it ;)

Posted by: phleabo on April 9, 2006 at 7:02 PM | PERMALINK

BRAZIL HAS PRODUCED A CAR THAT WILL USE GASOLINE , A MIXTURE OF GAS AND ETHANOL OR STRAIGHT ETHANOL. THEY HAVE CUT THEIR OIL/GAS CONSUMPTION BY ONE THIRD AND THE OIL COMPANIES DO NOT LIKE THIS . THIS WAS ON ONE OF THE CABLE CHANNELS .
I CAN REMEMBER WHEN ONE COULD BUY A 100 LB. SACK OF SUGAR FOR TWO BUCKS IN MEXICO.
SUGAR CANE AND SUGAR BEETS WERE BIG MONEY CROPS IN CUBA AND MEXICO .
SO WHERE THE HELL ARE THE CROPS AND THE
SMART ASS ENGINEERS THAT ARE GOING TO GET THIS BALL ROLLING.

Posted by: BRASS MONKEY on April 9, 2006 at 7:03 PM | PERMALINK

A plug-in thing like this would be great for me. The problem is they aren't being produced in quantity, so you have to pay prototype-style pricing for them. If they were closer to $10,000 instead of $100,000 they'd make a lot of sense for me.

I've got teen-agers. Give them something that won't go further than 80 miles, or faster than 65, and csts 10K and I am so there -- especially if they don't have a back seat....

Posted by: Davis X. Machina on April 9, 2006 at 7:12 PM | PERMALINK

Public transport of the future?,


http://www.skywebexpress.com/


One can imagine a system like this deployed on a really large scale replacing a large percentage of auto traffic throughout the country.

Posted by: cld on April 9, 2006 at 7:12 PM | PERMALINK

Ah, Kevin,

Again with the peak oil.

There is no problem. Higher oil prices will spur oil companies to explore and drill for more oil which will in turn ultimately raise supply so that price falls to its long run level. And we're already seeing that happening.

Posted by: egbert on April 9, 2006 at 7:21 PM | PERMALINK

The ANWR debate really comes down to whether we want to A.) get it quick before 1) the permafrost melts and the alaskan pipeline gets too expensive to maintain as it differentially subsides into the mud, 2) before other north slope oil (needed to maintain minimum pipeline flow rates) is depleted, 3) before climate change wipes out polar bears and musk oxen, and 4) while the marginal rate of return is fairly low (40 dollar expended per 70 dollar barrel) or B.) wait until the ice is gone and the coastal plane is submerged so we can 1) drill it using simple shallow offshore rigs, 2) transport it using oil tankers in the arctic ocean, 3) not have to worry about man eating polar bears, 4) let our oil field workers wear shorts and shortsleaves, and 5) get a huge rate of return for it (30 dollar expenditure for 400 dollar barrel).

As a consultant for the copper mining industry, I whole heartedly advocate hybrid cars.

Posted by: toast on April 9, 2006 at 7:23 PM | PERMALINK

A whopping big gas tax is exactly what we need. $3.00 a gallon for gasoline is near the pain threshold, but is not quite high enough to modify behavior. I'd say $2.00 a gallon in taxes, rolled in over a few years, would do the trick. It would go a long way towards closing the deficit, would encourage conservation and better vehicle choices, and would reduce congestion on the freeways. There could also be a tax credit for retiring older polluting vehicles, and for purchasing more efficient vehicles (not limited to hybrids). Industries that would be heavily affected by increased fuel costs (airlines, trucking) could either be exempt from the tax, or get offsetting tax credits. Also, since biodiesel and other renewables would be exempt, there would be a strong incentive to use them and invest in their infrastructure. The problem is selling it to the public. How could a politician say, "vote for me, and I'll enact large gas taxes"? Instead, we'll stay dependent on petroleum and deficit spending until the whole system implodes.

Posted by: Alistair on April 9, 2006 at 7:30 PM | PERMALINK

Let's quick burn all the petroleum now before some smarty pants "scientist" discovers a bunch of "helpful" chemicals and materials that can be made out of the smelly black ooze.

And, let's burn ANWR oil now rather than save that oil for a raindy day when it will be even more valuable, and when our mining techniques are even safer.

Posted by: zeph on April 9, 2006 at 7:30 PM | PERMALINK

You know, I think the average guy is a lot more ready to learn that his wife is a lesbo who does threesomes, than he is to hear gas will be $10 a gallon.

And the brainwashing has been great. In reality, you can buy electric cars and trucks off the shelf (they're used in plants, amusement parks, and estates) that will easily handle the average suburban trip. People who commute regularly on a bicycle do not consider ten miles a great distance. But it's all treated as a mystery sort of thing that might happen in the future by the car-driving culture.

I suspect we may be doomed- hoist on our own petard, so to speak.

Posted by: serial catowner on April 9, 2006 at 7:44 PM | PERMALINK

The only way to change behavior: Add the right kind of density. Now.

Do you really expect people to walk or cycle in current suburban environments? Distances are huge, there's minimal sidewalks and no bike-friendly main roads, and because of the subdivision model followed by most recent suburban developments you often have to walk/drive miles out of your way.

There isn't enough close-in housing or amenities right now, so it's both cheaper and more convenient to pay crazy amounts for gas than to move to city neighborhoods -- and, really, those are the only two alternatives.

There's only one way to fix that: build more housing in the city. Lots more. Think: every block that has retail or a parking lot should add 5-6 stories of apartments above it.

Smart building and planning can also mitigate people's objections to living close together. Good building practices can completely soundproof each apartment. Common decks/patios/social rooms (not to mention good local bars) can give people space for great parties and barbecues. Local storage and delivery services can help people store their junk. And, of course, clean, frequent, fast and comfortable mass transit is needed to get them from place to place.

This is when I, oddly for a liberal, favor corporate welfare. Let's throw money at developers who build urban housing that meets those rigorous standards. The more there is, the more reasonably it will be priced... and the less absurdly expensive oil will affect many of us.

Posted by: dal20402 on April 9, 2006 at 7:45 PM | PERMALINK

The more I look at this gizmo the more practical I think it is that we should start working on replacing most of our automotive infrastructure with a system like this,

http://www.skywebexpress.com/the_system.shtml

http://www.skywebexpress.com/150b_vehicle_propulsion.shtml

Posted by: cld on April 9, 2006 at 7:51 PM | PERMALINK

Drill ANWR!!!!

Because America DESERVES to lose it's last remaining wilderness to feed it's oil addiction.

Damn fucking straight.

Drill ANWR repugs!!!!
Please.

Drill ANWR!!!


Posted by: koreyel on April 9, 2006 at 8:01 PM | PERMALINK

We need a fossil fuel tax, say 10%
(the starting amount to be determined by wiser people than me) that increases yearly
(every year!)
until fossil fuel is no longer used.

The proceeds would be used to finance the moving of our coastal cities inland to higher ground. (Sea level is rising at least three feet in the next hundred years, probably more.)

It might wreck the economy but may well save the planet.

Posted by: slanted tom on April 9, 2006 at 8:01 PM | PERMALINK

"US gasoline usage dropped significantly between 1979 and 1982 or so, and prices only went up about 40% in real terms. There are two main differences between then and now. First, there was a recession. Second, there was an expectation that oil prices were going to keep going up forever."

Third there was a recently enacted (1975 or so) law requiring progressively higher fuel efficiency over time.

Posted by: jefff on April 9, 2006 at 8:03 PM | PERMALINK

JimPortlandOR: Gas prices haven't affected purchases of gas, yet. But the sales of gas-hog SUVs and trucks has dropped dramatically.

A simple and significant observation. People obviously don't have, or don't perceive, good options for reducing expenditures on gas other than buying a different car. That truly sucks, and is an indictment of something (another topic).

Posted by: has407 on April 9, 2006 at 8:07 PM | PERMALINK

I think there should be a tax paid for people who burn fossil fuels which emit carbon into our atmosphere, which affects the climate which will have an effect on everyone.

This tax will consist of the following: all of your offspring will die of thirst or starvation because of catastrophic global climate change.

Posted by: osama_been_forgotten on April 9, 2006 at 8:12 PM | PERMALINK

Well, one way or another the price of gas is going up. We could raise the price now with a tax and use the money to build rapid transit and high-density housing for the baby boomers who will be retiring. Lots of people consider a move to a smaller house when they retire.

Or, we could let the oil companies raise the price and take the money in the form of profits. Then they could use the money to buy US, fixing markets with one hand to drive up prices while they offer credit-card debt and home equity loans with the other. The winner of this game collects the suburban mortgages and the loser pays rent for the rest of their life.

Of course, it would be dam* near immoral to collect a tax because blabidi-blah-blah-blah, we all know that.

It's a conundrum, is what it is.

Posted by: serial catowner on April 9, 2006 at 8:14 PM | PERMALINK

What is YOUR solution for energy and eceonomic growth?

1> Pull out of Iraq (the war effort is driving oil consumption)
2) Buy a bicycle (we're all too fat anyway)

Posted by: ExBrit on April 9, 2006 at 8:41 PM | PERMALINK

The so-called shortages are phoney and intentionally created by the oil companies to drive gas prices up:

http://www.consumerwatchdog.org/energy/pr/?postId=5110

Of course, we have no regulatory cops on the beat with this administration and the Republican-controlled Congress is providing no oversight.
.

Posted by: VJ on April 9, 2006 at 8:50 PM | PERMALINK

Considering the huge amount of ignorance on display here about Spaceship Earth`s petroleum situation I thought I`d add a slight corrective (which I`m sure will be ignored)

"Considering the many productive uses of petroleum, burning it for fuel is like burning a Picasso for heat." - some Oil Executive

Posted by: daCascadian on April 9, 2006 at 9:08 PM | PERMALINK

Now this is super cool.

According to an above poster, the burning of oil in all its multivarious forms should be TAXED
and the PROCEEDS should be used:

"to finance the moving of our coastal cities inland to higher ground.
(Sea level is rising at least three feet in the next hundred years, probably more.)"

ROFLAMO!

Why am I laughing and rolling?

Because the US leadership doesn't even acknowledge global warming-- much less rising sea levels.

LOL!

This poster needs to be given a hearty dose of the Administration's kool-aid:

"Prayer will save the day...
Yeah verily,
Prayer will save the day.
So get down on your knees...
Get down on your knees....
And pray.
Cause prayer is gonna save the day."

LOL! LOL! LOL!

[Aside: I've got 2000 dollars on N'Orleans gettin' hit again this summer by a CAT 4 'cane... LOL!
Maybe I will open a church with my winnings.. LOL!!!]

Posted by: koreyel on April 9, 2006 at 9:29 PM | PERMALINK

Look, the current (and near future) crude oil supply isn't the problem folks, in aggregate the world is swimming in the stuff. The problems are (1) constrained refining capacity at the end markets and (2) nervous/greedy (two sides of the same coin) speculators driving up the crude price when the (pretty much daily) remotely-plausible-disaster looms in the distant mist. For example, last time I looked, Ahmadenijad farting is worth $2/bbl., give or take. More serious and knowledgeble observers than I estimate that about $20-$30 of the current crude price reflects this uncertainty/speculation. But given the relative paucity of adult supervision of our governments (including both the US and oil producers) this could get worse before it gets better.

Posted by: tom on April 9, 2006 at 9:31 PM | PERMALINK


TBROSZ: Don't know about the oil, but Venezuela certainly does seem to be stealing the infrastructure for getting it out of the ground from various nations

Yeah, because what is the world coming to when giant corporations can't pay off dictators in order to reap obscene profits from the natural resources belonging to one and all and not expect to be able to keep their sweet deals after a democratically elected regime takes power until the last drop has been pumped? Kinda makes you feel like crying, doesn't it?


Posted by: jayarbee on April 9, 2006 at 9:37 PM | PERMALINK

jefff: "Third there was a recently enacted (1975 or so) law requiring progressively higher fuel efficiency over time."

...And Jimmy Carter mandated that Americans had to drive no faster than 55MPH. It conserved barrels and barrels of gas overnight with zero investment or structural change. The only cost was that it took a few minutes longer to get from here to there. Traffic fatalities and fender benders also declined in number, a nice side-effect.

Conservatives, of course, screamed bloody murder! Evidently, such a Federal mandate was a violation of our first amendment right to drive 80MPH through vast stretches of Montana.

Posted by: PTate in MN on April 9, 2006 at 9:55 PM | PERMALINK

Montana never enforced it except for the 5 dollar roadside policeman gratuity.

Posted by: toast on April 9, 2006 at 10:21 PM | PERMALINK

"I'm not opposed to higher gasoline taxes, but anyone who thinks gas taxes are good way to lower gasoline consumption had better be in favor of a whopping big one."

Kevin,

It's true that in the short run, demand won't budge in the face of high prices. Most people simply don't have the option of cutting back on driving. But: if price stay high for long enough, consumption will fall. Here's how:
- Some people, when it's time to move and they're considering locations, will move closer to work.
- Some people will finally start putting up with the hassle of carpooling.
- Some people will convince their boss that they should be able to telecommute sometimes or all the time.
- Some people will start working four 10-hour days instead of 5 8-hour days.
- Some people will start driving a little slower.

Each of these actions will happen at the margin. They haven't happened yet because none are decisions you can put into effect the same day (or even the same year) that gas prices go up.

In summary, our capital stock (houses, cars, transportation) are set up so that we use a lot of gas. In the long run, capital can be replaced, improved, and built. Supply and demand works!

Posted by: A-ro on April 9, 2006 at 11:09 PM | PERMALINK

Couple of years ago, when people complained that the $50,000 tax deduction on 3-ton plus SUVs encouraged wasteful fuel consumption the Bush administration response was to make the entire cost deductible. So maybe this time, given the increased demand and a bigger problem, they'll offer a $50,000 tax rebate to their friends who buy one.

Posted by: R.Porrofatto on April 9, 2006 at 11:20 PM | PERMALINK

Not immediately applicable to the thread, but

Virus Assembled Batteries,


http://www.technologyreview.com/BizTech/wtr_16673,296,p1.html


Posted by: cld on April 9, 2006 at 11:37 PM | PERMALINK

Mentioned this before of course, but it bears repeating:

The average commuting time to work across the whole of the EU is 17 minutes.

It's all about the suburbs.

Posted by: floopmeister on April 9, 2006 at 11:53 PM | PERMALINK

if price stay high for long enough, consumption will fall. Here's how:

A-ro: you forgot
- some people will switch to hybrid cars from gas guzzlers
- some auto companies will ramp up production on hybrid cars as demand rises, making them cheaper and fueling yet more demand
- some people will start biking to the supermarket or for exercise, rather than driving

Posted by: brooksfoe on April 9, 2006 at 11:58 PM | PERMALINK

It's all about the suburbs.

But Floop, that means the solution in the US is extremely long-term and requires a cultural adjustment. And that probably won't happen except with much higher resource costs and significant public leadership. The leadership is there in some states, but not in others; the higher resource costs is exactly the point Kevin is trying to make.

Personally, having just read Jared Diamond's "Collapse", I'm thinking it's entirely possible that Americans are in the Easter Islander category: people who are unable to restrain themselves from conspicuous consumption until they've cut down the very last tree on their own island.

Posted by: brooksfoe on April 10, 2006 at 12:05 AM | PERMALINK

One minor point for those who argue that the market 'works', and therefore...

...there's no problem.

The market has currently decreed high oil prices. Over $40 a barrel, it becomes economically viable to extract extra heavy crude oil that is more difficult and costly to extract and refine.

Here's the kicker - with over 90% of world supply of this oil, Venezuela has the largest oil reserves in the world.

The Middle east pales by comparison.

http://business.guardian.co.uk/story/0,,1745467,00.html

Dear me, has the Bush administration been barking up the wrong tree again?

China already has a very large hand in the South American pie, while the US is expending men and money on a fool's quest in Iraq.

Posted by: floopmeister on April 10, 2006 at 12:06 AM | PERMALINK

Dear me, has the Bush administration been barking up the wrong tree again?

Oh, no, Floop - now you're egging Bush on to invade Venezuela? It just gets worse and worse! :)

Posted by: brooksfoe on April 10, 2006 at 12:07 AM | PERMALINK

Oh, no, Floop - now you're egging Bush on to invade Venezuela? It just gets worse and worse! :)

Yes, and fundie preachers have just reinterpreted Caracas to mean 'Armageddon'. The Apocalypse is due to happen in South America - saddle up and move 'em out!

;)

Posted by: floopmeister on April 10, 2006 at 12:10 AM | PERMALINK

I'd be interested to see a cross-indexing of the increase in real-estate value in the US over the past 10 years with the expected areas that are expected to be underwater within the next 100 years. Just curious how much of that value is going to disappear.

Posted by: brooksfoe on April 10, 2006 at 12:17 AM | PERMALINK

I'd be interested to see a cross-indexing of the increase in real-estate value in the US over the past 10 years with the expected areas that are expected to be underwater within the next 100 years. Just curious how much of that value is going to disappear.

Let's not do that! Australia has no 'heartland' - at least not one in which a Western consumer lifestyle will ever flourish. Hence, 90% or so of our population lives within a one hour drive of the coast (can't remember the exact figure).

If they are underwater in 100 years, we''ll lose more than real estate value.

We'll lose most of our inhabited real estate.

Posted by: floopmeister on April 10, 2006 at 12:23 AM | PERMALINK

Hey, everyone I know and love lives in the red zone - in New York City, the Netherlands, and me and my family in Hanoi (elevation:

Posted by: brooksfoe on April 10, 2006 at 12:29 AM | PERMALINK

Oh weird. I wrote: elevation less than or equal to 3m, but it interpreted the less-than sign as HTML. Anyway, I'm bummed about the whole thing, but is there any stopping it?

Posted by: brooksfoe on April 10, 2006 at 12:30 AM | PERMALINK

You're in Hanoi? Lucky bastard - I'm looking at options to get back to Vientianne for another few years...

As one of my Lao friends said - "We're a lucky country, Laos. We didn't get hit by the tsunami."

And he wasn't being sarcastic (the poverty, the bombs from the American war, etc) - gotta love their view on life.

Posted by: floopmeister on April 10, 2006 at 12:34 AM | PERMALINK

Anyway, I'm bummed about the whole thing, but is there any stopping it?

Oh, i don't know. I try not to fall prey to the belief that if the US doesn't do something, it won't get done...

Just because the current US administration is comprised of bumbling myopic ideologues it doesn't mean solutions will never be found. There is plenty happening elsewhere in the world, and I don't believe, actually, that the US will be in a position to dominate the global response to issues such as this for that much longer.

Sometimes change comes from the periphery, however much the imperial capital is locked in stasis, you know...

;)

Posted by: floopmeister on April 10, 2006 at 12:45 AM | PERMALINK

Gasoline demand rises because a gazillion people enter this country each year. They enter this country because we use energy efficiently and so more migrants come here, to use energy efficiently.

Ultimately, 9 billion people will be crammed into factories in southern california, making widgets and using gasoline efficiently.

Posted by: Matt on April 10, 2006 at 1:15 AM | PERMALINK

They enter this country because we use energy efficiently and so more migrants come here, to use energy efficiently.

5% of the world's population use 25% of the energy.

American efficiency?

Posted by: floopmeister on April 10, 2006 at 1:19 AM | PERMALINK

MUltimately, 9 billion people will be crammed into factories in southern california, making widgets and using gasoline efficiently.

Nah, you're describing Guangdong province in China, I think.

Posted by: floopmeister on April 10, 2006 at 1:21 AM | PERMALINK

My commute in the EU is closer to 25 minutes, but that because I walk 10 minutes from the bus stop. My monthly transport bill is 30 euros for a bus pass. When I return to the USA that much money might fill the tank of my car once. The cost of buying the car and insuring it will be extra.

USA is facing some rather large structural changes. Denial wont help.

Posted by: troglodyte on April 10, 2006 at 1:21 AM | PERMALINK

While we definitely need to figure out a way to reduce oil consumption in the US, there's a problem no one has mentioned yet about a large gas tax: It's highly regressive. Sure, you'll nail rich suburban yuppies with their ridiculous Hummers and SUV tanks, but you'll also hurt a lot of working-class and middle-class commuters. And these groups have really taken a major hit in the pocketbook over the past five years, thanks to Bush's plutocratic economic policies. I would be opposed to any significant increase in gasoline taxation unless the revenue was used to fund middle-class entitlements.

Posted by: Firebug on April 10, 2006 at 1:29 AM | PERMALINK

Your one horsepower electric scooter is on sale now. You can go 40 kilometers or more between charges. You can travel at speeds of 40 kilometers per hour. It is clean and quiet. You can recharge your scooter at home or work with existing solar electric or wind generated technology. Google electric scooters to see whats available.

The Danes get 19% of their electricity from wind powered generators acording to a recent National Geographic article.

The US has over 1000 Megawatts of wind powered generators, the equivalent of a single nuclear reactor for much less risk or cost.

The Solar One Power Tower in the Mohave Desert generated enough electricity for 3000 homes.

The sun and wind will work for you long after easy oil and coal are gone. Use what oil you have to build the new energy collection and electric transportation systems.

No greenhouse gases, no pollution, no extra heat added to the atmosphere, less impact on the remaining ecosystems. The natural flow of solar energy is channeled for you use with existing technologies.

Posted by: deejaays on April 10, 2006 at 1:47 AM | PERMALINK

The reason that our 5% of the world's population uses 25% of the energy is because we are the wealthiest 5% in the entire world. We use that 25% far more efficiently than the Chinese or Indians would.

But it's far too late for a gas tax to make much difference. Barring a major economic slowdown in the aforementioned China and India, gas will soon cost $5 per gallon without any additional taxes. Demand destruction should ensue. Pass the popcorn. Oops, no popcorn left. All the corn went to make ethanol!

Posted by: Pocket Rocket on April 10, 2006 at 2:15 AM | PERMALINK

The reason that our 5% of the world's population uses 25% of the energy is because we are the wealthiest 5% in the entire world. We use that 25% far more efficiently than the Chinese or Indians would.

Really? Because the Indian and Chinese consumers are driving bigger SUVs than Americans?

On what grounds would you say the US is a more efficient user of energy?

Posted by: floopmeister on April 10, 2006 at 2:17 AM | PERMALINK

Kevin, did you see that ep of PBS' NOW with David Brancaccio wherein they exposed the Oil Industry shutting down refineries to tighten supply & drive up prices in America? They also exported American-refined oil to countries that didn't need it, to tighten our market. Even Pat Robertson tried to buy a shutdown refinery to open it up and make some money but Big Oil stopped him. There was footage from 2001 or 2002 in which Pat said that if they kept the refinery closed, California would see $3/gallon prices.

Poor Pat--Big Oil won't let him in on their game.

Posted by: Redbeard on April 10, 2006 at 8:26 AM | PERMALINK

How about using cane-based ethanol, which is so successful in Brazil? It is much more energy efficient than corn based ethanol since it requires a lot less energy to produce.

We could start by eliminating the 54 cents per gallon duty on Brazilian ethanol and providing incentives to car makers to produce dual use vehicles. Then, increase sugar cane production and use and improve existing technology to create a U.S -based alternative to oil.

Homer Hewitt
www.altara.blogspot.com

Posted by: Homer Hewitt on April 10, 2006 at 9:43 AM | PERMALINK

On what grounds would you say the US is a more efficient user of energy?

Well, the 3000 pound chunk of steel in my driveway that I use to go 10 miles each way to pick up things that I need at the grocery store (New Zealand Apples, French water, and African coffee) is a hybrid and I recently switched to a heat pump from an old electric furnace for heating. I probably only use the energy equivalent of 1000 haitians.

Posted by: VRE on April 10, 2006 at 9:44 AM | PERMALINK

"Some states...have banned [a fuel additive called] MTBE... which could reduce the volume of the nation's fuel supply by about 1.6 percent..."

Yeah, that explains why they are raising diesel prices penny for penny with gasoline. (Diesel doens't have MTBE or ethanol added).

Posted by: Buford on April 10, 2006 at 9:52 AM | PERMALINK

Increase gasoline taxes to $5.00 a gallon. We need to stop burning this vile energy source ASAP.

Posted by: Hostile on April 10, 2006 at 10:04 AM | PERMALINK

I heard news in SE VA that gas here will soon have a significant portion of ethanol added, maybe 5-10%. Indeed, it was supposed to be ready this Spring. That would help expand supply a little, but with the usual problems of energy-use to mfr. I haven't heard much more about it. Any good scoop on this or similar? (And why they even used freaky tertiary ether MTBE instead of say ethanol or isopropanol is beyond me.)

Posted by: Neil' on April 10, 2006 at 10:21 AM | PERMALINK

troglodyte"USA is facing some rather large structural changes. Denial wont help."

This simple statement is true at so many levels that it reverberates. It strikes like one of those man-sized gongs.

In addition to the Manhattan sustainable energy initiative, we need a federal level, non-partisan committee of experts and visionaries to "imagine" what these structural changes might include and to propose how we--the federal, state and local governments--can provide incentives to make the changes asap. The gas tax, a baby step towards change, is an idea whose time has come. Laissez-faire solutions, aka "denial," will just lead to injustice, confusion, paralysis and stagnation.

Unfortunately, of course, this assumes competent leadership, and as long as the Republicans control everything, we won't have that: The Republican stock-in-trade is denial. They choose to fiddle while Rome burns.

Posted by: PTate in MN on April 10, 2006 at 10:24 AM | PERMALINK

Various points:

The phrase is "hoist BY one's own petard," not "hoist ON one's own petards." Its a fart joke, not a sword joke.

In general the energy used to move a car goes up by the SQUARE of the speed. Lower speed limits back to 55 mph and every single vehicle gets a big mileage boost. Like that's ever going to happen after 30 years of libertarian preaching.

If you want encourage electrical vehicles you better make them street legal. Between bikes and motorcycles there is a big gap in what you can legally ride/drive on the streets.

Posted by: Tripp on April 10, 2006 at 10:46 AM | PERMALINK

Neil',

I heard news in SE VA that gas here will soon have a significant portion of ethanol added, maybe 5-10%

We've had 10%-15% ethanol/gas here for a long time. It hasn't made much difference. For one thing the ethanol costs more than gas so the production has been subsidized. For another they can't provide enough ethanol.

Yeah, more ethanol plants are being built but ethanol will be a drop in the barrel and nothing else.

It takes oil/energy to make the ethanol and it takes natural gas as well for the fertilizer. The bottom line is that at its best ethanol is barely an energy winner over oil. When all is said and done it provides a little extra energy compared to oil but not much.

Put another way if we decided to switch to 100% ethanol we'd drop our fuel usage just by a bit. We'd drop our oil usage some but boost our natural gas usage.

Ethanol will always be a 10% solution at best.

Posted by: Tripp on April 10, 2006 at 10:54 AM | PERMALINK

You can do an electric conversion for $7-$10k in parts, and get 30-40 miles between charges. That covers a huge percentage of car trips. The problem has been that the lead-acid batteries commonly in use are kind of lame--nobody wants to spend a couple of G's replacing their batteries every 2 years. Fortunately price-competitive large lithium-ion batteries are coming on line. It takes a bit of technology to make big Li-ion batteries that can't blow up. They last a lot longer, have higher energy per pound, and don't suffer as much in low temperatures. In a couple of years they'll probably be cheaper as well. Right now a guy near me with a converted electric spends about $0.25-$0.30 to recharge his batteries, and gets 30 miles per charge. His vehicle is a converted econobox, so that's probably like paying about $0.25/gallon for gas (not including the battery cost, which really does need to be figured in). When gas is $5/gal, that's going to become compelling even with the battery cost.

Posted by: me2i81 on April 10, 2006 at 11:13 AM | PERMALINK

Tripp: "In general the energy used to move a car goes up by the SQUARE of the speed. Lower speed limits back to 55 mph and every single vehicle gets a big mileage boost."

We can increase vehicle mileage by simply changing our behavior! Edmunds evaluated the effects of changing common driving behavior:
--stop driving like a maniac. Average savings = 31%
--drive the speed limit. Average savings = 12% (& more from a lower speed limit)
--turn off the car if you will be idling for longer than a minute. Average savings = 19%

These behavior changes are, of course, only a hedge, but why are we, as nation, not insisting on that Americans slow down, now?

And the answer is, as usual.... because we have a incompetent, lying idiot as POTUS.

Posted by: PTate in MN on April 10, 2006 at 11:33 AM | PERMALINK

me2i81,

Thanks for the actual info. I bet his mileage does not include running AC, defrosters, or heat, or at least I really doubt it.

In MN the hybrid mileage drops to nearly the same as a comparable gas car when you use any of the above.

You might as well drive a scooter, which is what I do when the weather's nice enough for it.

Posted by: Tripp on April 10, 2006 at 11:36 AM | PERMALINK

PTate in MN
--drive the speed limit. Average savings = 12% ...These behavior changes are, of course, only a hedge, but why are we, as nation, not insisting on that Americans slow down, now?...And the answer is, as usual.... because we have a incompetent, lying idiot as POTUS.

It does not follow.

Oh god that's rich. It is because of POTUS that I exceed the speed limit. Don't turn car off at long stop light. Drive like maniac. Magnificent stupidity with that one.

Posted by: Red State Mike on April 10, 2006 at 11:38 AM | PERMALINK

Mike,

Well, then, why do you "exceed the speed limit, don't turn car off at long stop light, and drive like maniac?"

Personally I blame Rush, libertarians, the oil industry, and the US automobile industry.

But I'd like to hear your explanation.

Posted by: Tripp on April 10, 2006 at 11:59 AM | PERMALINK
Two comments. First, if 1.6% is a "large amount," then we are indeed in a very tight market. This is probably due to both refinery capacity issues and fundamental oil supply issues.

If a 1.6% volume reduction because of the elimination of an additive produces no discernable effect on consumption (and, necessarily then, a corresponding increase in quantity of gasoline supplied) and substantial pressure to increase prices, what it tells you is that price elasticity of both demand and supply is low, correct.

Second, gasoline prices have doubled in the past few years and demand has continued to increase.

An increase in demand is expected, all things being equal, to produce an increase in quantity traded and an increase in price. Now, here, you are using "demand" to mean "quantity traded", but really, all this really means is "demand increased".

It hasn't even leveled off, let alone dropped.

You'd expected quantity traded to drop and prices to increase if supply was reduced; if demand increased, you'd expect, as noted, quantity traded to increase and prices to increase. Draw classical supply and demand curves, and consider what happens when they shift.

So, again, we're just talking about behavior that reflects the main driving force being demand increases.

I'm not opposed to higher gasoline taxes, but anyone who thinks gas taxes are good way to lower gasoline consumption had better be in favor of a whopping big one.

Inasmuch as this follows from anything you've mentioned, though, its not from the things you mention in your second point, to which this is presented as the conclusion, but from the first.

Why? Because all the support you marshall in the second point is just evidence of an increase in demand, it doesn't tell you anything about price elasticity, and therefore doesn't tell you at all what effect taxes will have on consumption.

The first point points to price elasticity being low on both sides. Which suggests that consumption taxes will be a good way to produce revenue, though not a good way to reduce consumption, at least in the short run (major lifestyle changes like changing employment or residence or vehicle preferences that take a while to be realized as anything more than preferences may not show up in consumption trends over only a few years.) This isn't a strike against consumption taxes necessarily: they may still have substantial long-run effects on consumption, and in the short run they will produce revenue which can be expended on programs to make alternatives (either fuels or lifestyle) more viable and attractive. It does, however, suggest that they are inadequate alone as a short-term remedy, and that short-term benefit will depend on what the revenues are used for.

Posted by: cmdicely on April 10, 2006 at 12:15 PM | PERMALINK

Prices keep climbing
Big oil still getting our tax money
through tax breaks.
Record Profits for Big Oil companys.
No Republican will ever hold them accountable.
Our Planet Is screaming at us to do something.

But we will all sit here with our fingers in
our ears and our heads up our bu**s till
He** freezes over and we are past the
Point of no return.

Because God forbid Oil money looses its
grip on our goverment and Americans make
them do there jobs and find a solution.

Change is never easy it might loose them
votes and Americans are to lasy to do
some thing hard like save the planet.
Ask someone to give up some conviniance.
they will stomp there foot and say
NOT GONNA DO IT.

Posted by: Honey P on April 10, 2006 at 12:31 PM | PERMALINK

Red State Mike: "It is because of POTUS that I exceed the speed limit"

You don't believe that leadership has an effect on our behavior or a responsibility to address threats to the group? Then let's slash all corporate CEO salaries, fire the quarterbacks, eliminate the officer ranks in the military and shutter the WH and state capitols.

The buck stops nowhere in Mike's world?

Posted by: PTate in Mn on April 10, 2006 at 1:39 PM | PERMALINK

Elasticity (quantity response to price) is greater in the long run than short run. It takes time for people to change cars, and even longer to make decisions about housing and jobs to decrease commuts. Expecting short-term large responses doesn't make sense.

Posted by: CalDem on April 10, 2006 at 1:39 PM | PERMALINK

The problem is that demand elasticity for energy even in the long run in response to price increases is low. Let me give an example outside of automobiiles, from my own state. If you use the DOE calculator, the optimum level of attic insulation, in Washington state, even at 1999 and prior prices is R-50 to R-55. This level of insulation will give a simple backback of four years or fewer - which means that even after a reasonable rate of return is included this is a good investment. Regulations in our state require R-38 for new homes. Guess what the attic insulation in just about every new home in our state is? Yup r-38. Guess what homeowners with less insulation typically raise their level to? Yup R38 again. We insulated ours to R-50 from the R-20 it came with, and have lowered our thermostat by 5 degrees, and are more comfortable than before the attic insulation was put in. Given the amount by which we lowered our bill between November and December, I would say we are going to see a better return rate than that. The additional comfort is worth something too. You can find this sort of thing in industry too. Amory Lovins describes it as "leaving $10,000 bills on the shop floor".

Generally, long term inelasticty in energy demand in response to price increases is taken by most economists to be around .55 . (Zero would mean people respond to energy price changes like they respond to price changes in jelly beans; One would mean price has no effect - which can't ever happen. So .55 is pretty stiff and slow response to price increases.)

Posted by: Gar Liipow on April 10, 2006 at 3:04 PM | PERMALINK

Do the statistics regarding gasoline usage simply refer to the gross aggregate used, or do they refer to the amount used per capita?

Posted by: Yancey Ward on April 10, 2006 at 4:25 PM | PERMALINK

Gar, smart thinking with the insulation. We can all take measures to decrease our consumption. These changes are not easy, but they sure pay off in the long run. I recently moved closer to work (cutting my commute from 32 miles to 1.5). Yes, my square footage decreased while the price increased. However, my gas bill was decimated. And another added benefit...5 minutes in the car each way as opposed to an hour. I realize this is not an option for some people. It is for their sake that I oppose any additional gas taxes. There will always be a demand and gas taxes won't change that.

Posted by: GreenThumb on April 10, 2006 at 10:13 PM | PERMALINK

Gas taxes are negative reinforcement, something anyone with kids will understand may work in the short term but often provokes an undesired outcome. Like poor people taking a hit to their disposable income while the rich people reign in their business expansion and creativity.

What we need is positive reinforcement in the form of *lower* taxes for doing the right thing and more incentives to research and develop alternative and more efficient energy.

I like Gar's example of attic insulation. Why can't we incent oil and energy companies to promote these kinds of behavior? In the long run they'll end up making more money (because the pie is growing) and we'll have a more efficient and independant energy policy at home.

Posted by: El Grande on April 11, 2006 at 12:01 AM | PERMALINK

I agree, El Grande. I just can't get behind a tax that would be passed on to the consumer and disproportionately hurt the poor. And let's get real: the oil companies aren't going anywhere. They make HUGE profits because we comsume HUGE amounts of their product. Let's work WITH them with incentives to "do the right thing."

Posted by: Badger on April 11, 2006 at 6:56 AM | PERMALINK




 

 

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