Thoughts on Jon Stewart's "The Cost of Energy Independence"
Posted by Robert Rapier on June 21, 2010 - 10:28am
I have noted before that every president since Nixon has talked about the need to get the United States off of foreign oil and moving toward energy independence. Jon Stewart recently captured this theme in a very funny, but troubling segment:
While Jon does a good job of demonstrating that this idea of reducing our dependence on foreign oil has been unsuccessfully pursued by eight consecutive presidential administrations, the question he asked but did not answer was why this has been such a challenge. So I will pick up where Jon left off and explain why we couldn’t get it done and what it would take to get it done. The technical issue isn’t really all that difficult, but the political challenge is enormous.
U.S. oil production peaked in 1970 at 9.6 million barrels per day, and today stands at 5.3 million bpd* (Source). The average rate of decline since 1970 of U.S. oil production has been about 1.5% (an impressively low decline rate). But by the time U.S. oil production peaked, our oil consumption was already over 15 million bpd, and today stands at 18.7 million bpd (off from the high in 2005 of 20.8 million bpd). An increase in demand at the same time U.S. production has been falling is not a recipe for energy independence.
It is immediately obvious that if we use 18.7 million bpd and produce only 5.3 million bpd, we have to find a way to either 1). Cut petroleum consumption by 13.4 million bpd (a drop of 72% from current rates); 2). Raise petroleum production by that amount; 3). Some combination of the two. Since oil production in the U.S. only ever achieved about half of our current consumption rate and has fallen for 40 years, I think Option 2 is out of the question. In fact, I would go so far as to say the U.S. can’t raise production rates much beyond current rates, and with the public souring on offshore drilling we may find it very difficult to maintain current rates.
So that leaves us the option of reducing current consumption by 72% from current rates. This is of course why energy independence has eluded the U.S. For all of the talk of getting off of foreign oil, who is willing to cut their oil consumption down to about a third of what you currently use? I am not saying it can’t be done, but I am saying it can’t be done painlessly and without making some major adjustments. And that is ultimately why our political leaders have not managed to get it done. They are selling a sacrifice-free pipe dream.
In the clip above, presidents mention many different options for reducing our oil dependence. The problem is that they are all more expensive than oil, aren’t fungible with oil, and/or are themselves dependent upon oil. So politicians ultimately only pay lip service to the idea of energy independence (very popular) but don’t take tough measures (very unpopular) to actually achieve the goal.
But if energy independence is something that is very important to us, there is good news. We can probably do it by trimming away a lot of fat. Here is the speech that President Obama needs to make in order to explain how it is going to get done:
My fellow Americans. It has not escaped my attention that we use a lot of oil. Further, I have noticed that we consume over three times what we produce. This is a trend that has worsened over the past eight presidential administrations, but I am here to reverse the trend. Today, I am announcing a program that will move the U.S. on a path to energy independence by rationing petroleum beginning in 2011. Over the next five years we will reduce the amount of petroleum that Americans can use by 17% per year. This of course means that you need to start arranging your life in such a way that a 70% reduction in your petroleum usage over 5 years is manageable. Details of the execution of the program will soon be announced.
I recognize that this calls for sacrifice. If it were easy, energy independence would have already been achieved. But I sense that the public is ready to sacrifice some of their personal comforts for the benefit of an energy independent United States. It is possible that new domestic oil discoveries, renewable energy, nuclear power, and other alternatives are able to reduce the need for the full 70% cut in usage, but these sorts of promises have thus far not moved us very far along the path to energy independence. They have to date merely served as a nice delusion that energy independence can be achieved without sacrifice from most citizens by merely innovating our way out of this problem. Based on the trends for the past 40 years I think that is rooted more in hope than in reality, so we are going to try something a little different this time. This time, Plan A calls for sacrifice, and our former Plan A for the past 40 years – innovating our way out of this problem – will now become our hopeful Plan B.
So there is the path to energy independence for the U.S. in a nutshell. Based on today’s production/consumption figures, this would require a 70% across the board cut in our energy consumption down to per capita levels of countries like Russia, Jordan, Mexico, and Malaysia (potentially adjusted based on decline rates, new discoveries, and alternative energy). We would still use more oil per capita than Hungary, Chile, Thailand, Brazil, and South Africa, but we would need to come in at significantly less than the consumption of the E.U. (Per capita consumption levels for many different countries on a bbl/person/day level can be found at NationMaster.com).
That is realistically what I believe it would take to achieve energy independence. If you can’t imagine a U.S. president taking those steps, then you can well imagine why our foreign oil consumption has increased over those eight consecutive administrations. What we can expect to happen as we proceed down the path we are going is that eventually the market will force those reductions anyway by simply driving prices so high that we have to voluntarily slash consumption. Until then, if you enjoy the level of mobility you have today, you can thank the oil exporting countries for making that possible.
* Total supply is somewhat larger than 5.3 million bpd because of natural gas liquids and oxygenates adding some to the supply. Nonetheless, the gap to be closed is huge.Contact
- Content: editors at theoildrum dot com
- Tech support: support at theoildrum dot com
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Then perhaps, if you are inclined to move in this direction, you start phasing in taxes to drive up the price of the things you do not want used, because of all the damage they are doing, or to make them pay for the national security interventions needed to protect sources, or whatever your excuse or reason is, until they become more expensive than the things that can replace them. Setting the tax so that the price of e.g. oil has a floor stabilizes for business planning.
For many items, the needed price increase is quite modest, relative to what is proposed above.
I am not saying that you have a good idea or a bad idea of an approach, but there are perhaps more sensible ways to get to your path.
I've always thought a steep gas tax 30 or 40 years ago was exactly what we needed.
A little late now, but better we voluntarily increase the price of gas to force the issue of mass transportation and localization, than waiting for mother nature to force the issue.
We could certainly use a "National Security Tax" on oil and oil products, in particular gasoline. It would be fairly straightforward to justify.
I agree and have strongly advocated for increased fuel taxes at every level (Federal, State, City) to help provide alternatives to roads and highways. Unfortunately, this would require an amendment to the state constitution in the otherwise green-leaning state of Washington.
Currently, the state constitution requires that all funds collected from fuel taxes be used for "public highways". Here is Article II, Section 40 of the Washington State Constitution:
For a legal interpretation of what constitutes a "public highway" in Washington State we have a 1963 opinion from Attorney General John J. O'Connell with the following summary:
Action Item:
A good way to raise awareness of Peak Oil issues in Washington state would be for people to propose a citizens' initiative that rewrote Article II, Section 40 to allow the use of fuel taxes for other transit related purposes besides highways. Whether it passed or not, it would certainly get people's attention and offer a chance to raise important issues about our use of liquid fuels.
To fully understand Washington State's history with respect to transportation I recommend reading the short Transportation Chronology essay at HistoryLink.org.
Best Hopes for understanding the historical reasons for our present predicament.
Jon
i think your proposed initiative would be counter productive.
People are already resentful at having gas taxes go towards non-highway uses.
They already express resentment towards bicyclists because they consider the current gas tax a road user fee which bicyclists don't pay, and don't realize the state DOT is also funded through sales and property taxes that bicyclists pay as well. (WA St has no income tax.)
So why not just go the simpler route of having the state DOT entirely funded from fuel taxes? ie, eliminate subsidized roads entirely?
I see this approach as having a few salutary effects.
first, it is simple and elegant. People have a hunger for tax systems that they can understand, where a dedicated revenue stream goes to a particular agency.
it helps give the public ownership in a sense. I know people (I'm one of them) who purchase hunting and fishing licenses every year just to support Dept of Fish & Wildlife.
second beneficial effect from this approach is that citizens would vote to raise their own taxes to gain a public good, which would promote a more honest debate about the issues.
As it is, we prefer to punish smokers and drinkers and gamblers...constituencies without proportional representation.
of course the most salutary effect is the one I'm sure you intend...gas taxes would rise and presumably consumption would fall.
I agree with your assessment that we should try to make taxes simple and elegant and understandable. I think your suggestion is entirely appropriate and would support it.
So the new initiative would introduce language that said something like "all funds for development of new highways must be paid for out of fuel taxes."
I expect that this would be more complicated but I agree that it would be more desirable.
Its getting painful here in the UK. A tank of petrol (60l) is costing me GBP72.60, USD107.
We are a small country, but its easy to rack up mileage, especially for professionals (100 mile round trip commute is not unheard of). Commuting by rail costs a small fortune*.
Our government, in their infinite wisdom, put the tax on fuel into the general coffers, and not use it for replacement infrastructure.
*The demand for rail, outstrips supply by a large margin, and has for a long time. With rail you just buy a ticket, which is unrelated to the actual train you take (unlike air), so for any given train they could have 200% over capacity, which is a heath and safety problem, so they need to reduce numbers, so they raise prices. I know it sounds totally crazy/nutjob/tinfoilhat. Other brits help me out here....
(I've worked in The Netherlands and Germany and their public transport system is amazing, so sometimes it works.)
It is exactly that kind of "unintended consequence" that made me vehemently opposed to any talk of a gas tax.
You can just imagine the glee guys like Barney Frank will have spending that revenue.
Of course they'll promise whatever the baloney d'jour is.
Secretly they'll be thinking: Jackpot!
But that was before the BP Spill.
NOW I want the largest gas tax imposed immediately.
If that doesn't crash this phony economy then maybe folks will get so pissed that they'll crash the spending orgy in Washington via pitchforks and torches.
I seem to remember a quote from AlanFBE that a gas tax should be "painful".
Wrong again Al.
It should be crushing.
Force the poor out of their cars and onto the streets, they can rampage more effectively there.
If the enormity of the BP Spill hasn't entered into even the thickest headed dolts in government and the citizenry by now, then we are BS, beyond saving.
Force the Poor out of their cars.
That is very funny, as I know a lot of poor people. People that make less than $12,000 a year, and most of them don't have cars to begin with, and those that do, drive them very very sparingly.
I am one of them, I live on under $9,000 dollars a year.
Before the lessening of Oil use gets started, A program to get most everyone on a nice piece of arable land should be done, that way when hardships show up they can't say they are homeless, they have a piece of land they can at least rain harvest and grow crops on. And pitch a tent or mud hut on.
Of course there are cheap methods of housing them all in small houses using simple methods. Once people have land and something to call their own, asking them to pay high prices for food and power is easier, without so many mobs in the street everyday.
How much of the 5.3 million barrels of Oil is used in the food production and distributing networks? How much is used by Police, Fire, Medical services? How much is used by Gov't in other areas?
Any left overs can be used for public transit and moving people.
Not an easy thing to get done, and no easy answers.
Charles,
BioWebScape designs for a better fed and housed world.
Hugs from Arkansas.
No offense meant and the statement wasn't meant to be humorous.
The Detroit area has seen many folks lose their homes and take up residence in their cars during the first wave of this economic retraction.
Kicking them out of their cars too, via a large gas tax, would be the tipping point for those.
The point I have been belaboring is our economy CAN'T withstand a slowdown.
Rather it can only continue as long as there are enough marginal gains that can be shared with the general public in order to keep them mollified.
UK rail is a good example of people wanting to use alternatives but is made impractical. I was surprised when a return ticket was cheaper than a single - meant they could show a higher usage of the service. My local station had a bus link that finished, for the night, as the fist commuter trains were arriving. In fact it left 5 mins after one of the first really busy ones was due and which was often more than 10 mins late so you missed the bus. Having your own transport to and from the station was essential. Why was the bus finishing early, people weren't using it - duh.
NAOM
If that surprised you, don't even think of looking at split ticketing.
The rail industry need a good seeing to with a cricket bat - its a mess.
I lived and worked in the UK for 12 years until 2002, when we sailed for Australia. Trains are expensive, but raising prices to to take advantage of demand is logical from a pure Economics 101 standpoint. What was less logical under the old days of British Rail were the occasions when passenger numbers fell during a recession and prices were raised to make up the revenue shortfall. The French and many other continental European states probably made better choices than the UK. I remember John Major privatising rail and supporting it because the other privatisations had been so successful. With the benefit of hindsight I am not so sure now. I also remember that the break even point between using the car and the train was 3 passengers, but that wasn't a direct comparison because trains were generally faster, didn't need parking and (mostly) didn't suffer congestion.
We ought to just have it automatically bump up $0.05 or $0.10 every fall, gas prices usually fall then, so it would not likely create much outcry.
And the broader issue of how to do a carbon tax.
And building more nukes, with the lessons of TMI learned (we know a lot more about how to manage alert systems now).
Electrify everything but what runs on roads, start that with plug in real hybrids (like the Chevy Volt, battery, with a generator, not just an electric assist).
Better intermodal rail/truck, no more long haul truck, just local.
If a gas tax is t be put into place in the US, it is absolutely critical that it be phased in slowly;perhaps a quarter per gallon the first yrear, and fifteen cents per year afterward, something along those lines.
This would give people in a financial bind fair warning in respect to buying or selling a car, deciding where to buy or rent, etc.
The money would have to be dedicated to some very popular program, such as lowering the sales tax on food, or raising the standard income tax deduction.
There is not a snowball's chance in hell of a gas tax passing congress otherwise, and only a VERY slim one with the offsetting tax reduction elsewhere.
Such a tax would be good public policy for several reasons but it is probably not necessary to reduce gasoline consumption except in the short term;the export land model and the continued decline of the economy promise to take care of that issue the easy way, meaning it's just going to happen, regardless, no political capital need be spent by anybody.
Any sudden and large increase in the price of gas right at this moment would utterly destroy the faith of the consumer in a recovery.
There is ALWAYS a bigger envelope to be considered in making policy decisions.
why is everyone straight on to "we need a new tax"
stupid stupid stupid
how about what we had in the military overseas....a ration card
you get x amount at x price
beyond that you buy it off the economy at a steeper price
lots of trading amongst people based on what they wanted most off the ration cards....went for smokes,fuel,liquor when overseas
same would happen in a different way
that way you arent reaching into everyones pocket...only the people who are using to much
it would give people the option to be more responsible without screwing over the people who were responsible
point2:the military uses 25% of our fuel as a percent of the total we burn
we only need to cut the humans' use of fuels by less than 50% if the military will cut the pointless BS wars and bases all over the damn place
how much more does the government waste flying pelosis useless ass around on a friggin jumbo jet?
more than i use in an entire year every single flight
common sense people
cut the biggest uses first...then move on down to the individual
how much could we save transporting goods by rail instead of trucking?
how much are we wasting today in petroleum products to clean up the gulf spill?
forethought could have prevented that
how about the amount of NG just getting flared?
how much co2 goes into the air from flaring operations daily worldwide?
all our solutions can be simple and easy if we think about it first
and if you give the govt more moneys in taxes they are just going to waste more of our wealth
and hell, they'll prolly just spend the money on fuel to power some weapon of destruction anyway
I think we face a future of increasing dependence on foreign oil imports.
In regard to this question, Robert, I wonder if you have any comments on Skrebowski's recent prediction of 2014 for Peak? Also perhaps you could comment on Stuart Staniford's current position that we probably do not face an imminent Peak.
Good to see you back at TOD!
In regard to this question, Robert, I wonder if you have any comments on Skrebowski's recent prediction of 2014 for Peak?
Just spoke about Peak Oil in Italy. What I said there was I felt like a 90% probability, +/- 5 years from now. We won't know until declines have been going on for a few years, but I think we are right there - especially with the BP spill souring the public on deepwater drilling.
Also perhaps you could comment on Stuart Staniford's current position that we probably do not face an imminent Peak.
Had not seen it. Got a link to the essay where he lays out his case?
Good to see you back at TOD!
Ditto, but I am not really back. I have slowly learned that for some reason I attract a contingent of trolls ready to pounce on and nitpick anything I say here. So I have decided not to say much. :)
I do not have a link to the Staniford article. I regret his departure from TOD just as much as I do your absence.
In regard to the trolls: Don't let the ignorant bast*rds grind you down!
Speaking for many I can safely say that you are always more than welcome back at TOD whenever you can make a comment or post an article.
Ditto! RR is the best. Robert. What doesn't kill you makes you stinger. But maybe trollls can kill.
http://earlywarn.blogspot.com/2010/04/exceeding-2008-peak-of-oil-product...
Thank you for the link. I should be looking at Staniford's site as well as TOD. But TOD is so addictive . . . .
http://earlywarn.blogspot.com/2010/04/exceeding-2008-peak-of-oil-product...
He is arguing the point that I argued since about 2005. I have maintained that there is some spare capacity in the system, and I think there still is. But I also think it will be gone before too long.
Stuart is very optimistic about Iraqi production potential -- see his posts on the topic at Early Warning.
I see no reason to doubt the technical potential to increase Iraq's production four-fold. But there are both domestic and international political reasons to think increases will be small until we come to the end of the 'undulating plateau', at the earliest.
RR,
Perhaps your attraction to trolls is a measure of your stature and influence-indicating that you are being taken seriously as threat to the status quo.
Well, apparently I am thought to be influential enough to start showing up on enemies lists:
http://www.consumerenergyreport.com/2010/06/14/im-number-5/
;-)
Keep working at it, Robert, and you too could one day be #1.
;-)
LOL, Well Robert we here in Oregon are very supportive of ethanol. We use 10 % all year round now. My wife's mileage went from @19 to @16 so I know that we are doing our part to reduce(increase?) or imports of foreign oil.
Keep at it - #1 looks a little tough to knock off how about 2nd?
Aren't you working on biobutanol?
Robert - Recommend you ignore the trolls. If we all conformed our behavior and expression of ideas to them, it would be a quiet world with little progress. Reasonable people can come to different conclusions on an issue, but the exercise loses quality if the nattering nabobs of negativism (borrowed) succeed in limiting the debate. Thank you.
In regard to this question, Robert, I wonder if you have any comments on Skrebowski's recent prediction of 2014 for Peak?
Just spoke about Peak Oil in Italy. What I said there was I felt like a 90% probability, +/- 5 years from now. We won't know until declines have been going on for a few years, but I think we are right there - especially with the BP spill souring the public on deepwater drilling.
Also perhaps you could comment on Stuart Staniford's current position that we probably do not face an imminent Peak.
Had not seen it. Got a link to the essay where he lays out his case?
Good to see you back at TOD!
Ditto, but I am not really back. I have slowly learned that for some reason I attract a contingent of trolls ready to pounce on and nitpick anything I say here. So I have decided not to say much. :)
http://www.youtube.com/watch?v=FvcJqcUlYTo
Agree 100%, but it will not happen. If Obama gave the speech above (and actually sent the legislation to Congress), the democrats would lose control of the house and senate in 2010, and Obama would lose in 2012.
To paraphrase WT, I expect the USA to achieve independence from foreign sources of oil by 2030.
I guess that's what's so maddening about this whole situation. We all know what needs to be done (more or less, we argue about the details), but we also know that if either party in congress or the president actually tried to do it, they would get their butts kicked out of power.
Personally, I favor a tax over direct rationing, but either would work. Current CO2 prices, if I have done the math correctly equal about $0.20 per gallon of gasoline.
I think the way to go is tax oil at the wellhead/point of entry to the USA. I would start at $10/barrel ($0.22 per gallon of finished product), and increase monthly by $5 per barrel in perpetuity. The other way to go would be just tax CO2 at $15 per ton, rising monthly by $5 per ton in perpetuity. Either way, I would have these taxes 100% refunded on a per capita basis.
Of course, I would also like to win the lottery, and have Heidi Klum leave Seal for me, but these are about as likely as having the above proposal put into place.
He might survive, but only if the last to words of the speech are "just kidding". Then we would find out if the electorate has a sense of humour. My guess is probably not enough of a sense of humour for him to survive.
Of course you got the math wrong 17% for five years is 85% (unless you meant a geometic reduction), which yields 39.4% of current consumption at the end (not quite enough). We could spread the transition over a longer time frame to make it more palatable, and to give people a chance to wear out their gashogs before they go into involuntray retirement.
Of course you got the math wrong 17% for five years is 85% (unless you meant a geometic reduction)
Each reduction is based on the prior year, in which case 17% over 5 years was supposed to be 70%. I can see that it should have been more like 20%. On the other hand, I didn't include oxygenates or NGLs, so the real reduction wouldn't have to be quite 70%.
The thing that strikes me is that there is an overall structure that keeps everything working (financial system, banks, international trade, internet, electrical system, roads and bridges, industrial agriculture, and lots more) as well as what we think of as discretionary purchases of oil --say oil used in the production of a new car or a new house, or used for a vacation.
The problem I see is that when we cut back on what we think are discretionary expenditures, we could inadvertently trigger a failure of the backbone system that is holding everything together, because everything is so tightly interconnected. One issue can be bankruptcy, or for a government, inability to maintain the services it has provided in the past.
I don't think scaling back oil use is all that easy. There is a decided risk that major systems will stop working in the process, causing indirection impacts no one expected--like a cutback in domestic oil production.
Gail is exactly right. Everything is connected. Even if republicans and democrats got together and both decided to take equal blame, it still could not be done without causing the catastrophic collapse of the economy.
If we cut oil use by 70 percent it would mean the GDP would drop by at least 50 percent, perhaps even a lot more. Half the workforce of America is engaged in producing that 50 percent. It would cause a depression at least twice as deep as the Great Depression of the 1930s. And unlike the 30s, there could never be a recovery because the energy would not be there to put people back to work.
Actually it is impossible to accurately predict what would happen, but only a complete fool would think we could do it without severely disrupting the economy and causing enormous hardship, hunger and misery.
Think about it. If we cut oil consumption by 70 percent we would only be doing voluntarily what we have been predicting would happen involuntarily when oil production declined to 30 percent of today's level.
Ron P.
We're probably headed for collapse anyway.
A gas tax 30 or 40 years ago would have been nice.
+1
Gail, Ron, both of you keep using the word “would” as though this future is only a potential one. I suggest using the word “will” instead, as our future that you are describing is a thermodynamic certainty. Massive GDP cuts and a depression twice as deep as the Great Depression? Less complexity of civilization due to losses of surplus energy? Enormous hardship? Yes, because we didn't tax gas in the 1970s, and built an overshot infrastructure based on happy motoring. And we won't change now until Mother Nature puts limits on us, very soon. The more we deny and delay, the harder the collapse. Might as well start talking in terms of certainties.
And you have to ask yourself, why have our policy makers chosen complicated carbon credits and other derivative games instead of the easy path of taxing gasoline? Hmmm.
As an Alaskan woman, I am particularly happy that Ms. Palin has backed herself into a corner with her populist rants of Drill Baby Drill. Here’s Cutler on reasons why we can’t be energy independent. While he provides a fairly comprehensive list, other good points have been made previously on TOD, and I might add my favorite, why use our grandkids oil while we can still buy it from the neighbors?
http://www.theenergywatch.com/2010/06/17/the-myth-of-energy-independence/
Good points Iaato, but while I know the future will be cruel and miserable I do not know exactly when, how sudden it will happen or how it will play out. So I cannot express certainty concerning anything about it.
Very good point. M. King Hubbert made the same point many times. He called our policy the "Drain America First" policy. He once wrote:
Ron P.
Think about it. If we cut oil consumption by 70 percent we would only be doing voluntarily what we have been predicting would happen involuntarily when oil production declined to 30 percent of today's level.
The only thing is that if we do it voluntarily, we have a better chance of avoiding some of the worst case scenarios. It won’t be pretty in any case. You have me wrong if you believe I think we could manage it without great upheaval. As I said to Gail, this is why we haven’t done it: Because it is hard. But the reason this has failed for 8 administrations in a row is they all failed to reel in consumption, instead holding out for technological miracles.
I don't think a failure of will is to blame entirely; for instance, vehicle registrations continued to climb all through the early 80s, so it's not surprising that gasoline consumption only managed to decline for four years before climbing again, reaching 97.22% of its peak value in only 9 years.
Things could have been worse, too; we phased out distillate for heating and resid for power generation rather handily, defying forecasts that US demand would climb even more inexorably at the end of the 20th century.
If an additional 2 MPG were mandated from 1983 on we would have had 50 MPG by 1990; gasoline consumption shifted around a bit in the early 80s - 1981 even saw a 9 kb/d increase. 1981 and 82 were 6588 and 6539 kb/d respectively; positing this linear increase in CAFE to a corresponding linear decrease in gasoline consumption we would see 5902 kb/d in 1995 instead of 7789 kb/d, a difference of 1887. Helpful? Sure, but not earthshaking; given the imminent decline of CA, TX and AK production we would still have been importing a fair amount of oil. Even with Prudhoe at full bore and the lower 48 looking like a pincushion from all the drilling we still had to import oil.
My numbers here could be off somewhat, but not much I believe. Europe haven't managed to really shake their dependency on liquid fuels either, simply shifting from light to middle distillates, and they've been much more rigorous in this matter than the US.
Many people here in Europe use cars because it's more convenient, but many of them could quite easily change to public transportation like buses and trains, if needed. So the actual dependency is probably much lower than consumption statistics indicate.
And if any significant number "easily changed to" the already jammed trains on already over-capacity lines, how well would that actually work out for them? Are there any major cities swimming in excess transit capacity?
That would be a difference without distinction. It also begs the question of why the IEA analyzed all these varying avenues for Saving Oil in a Hurry (title of the study if you're curious) like carpooling or telecommuting, if all that need be done is to cram people into trams like sardines.
BP stats say that EU light distillate consumption contracted 885.56 kb/d total 2000-2008, while middle distillates grew 1064.03 kb/d. I mean to examine this in much closer detail; but it would seem to imply that something trumps all here - traffic congestion? Population growth? At any rate hi tech diesels, draconinan fuel taxes, and ultra light/small car bodies don't seem to be sending them into negative territory as you'd expect. All of that MT line is another factor - perhaps France or Germany's reduced consumption are being dragged down by sluggards in the rest of the Zone.
I can't speak for all the cities, but here in Stockholm I find that at peak hour there's some congestion *, but there's still plenty of capacity, if more trains can't be added people just have to stagger their commutes a bit more (which they will if there's a sudden surge in the use of subways / light rail). And it's always easy to add more buses as a supplement.
Note that most European cities are organized around public transport, there's nowhere near the amount of far suburbia (hard to serve with trains and buses) as in the US.
* And when I say some congestion that's nothing compared to what I've seen in Chinese subway systems... When I went to China that gave me a whole new perspective on what a congested subway train is.
Exactly, we defer doing it because it is going to be very hard, and in so doing bring on worse hardship down the line. Meanwhile the earth adds 70 million humans each year. If in collapse we are going to have many people die earlier than expected, then waiting means that more will die earlier than expected. And more of the planet will be ravaged. Whatever the terrible costs of cutting back voluntarily, the costs of not doing so are far far more severe.
Unfortunately, most will not be able to see the horrible future we are preparing for ourselves until it is upon us, such is the nature of the human mind.
I don't think the costs will be so dire. We will still need energy so expenses will shift from oil to bio fuels, wind, nuclear, etc., but the money will still be spent and perhaps the wealth that is generated will create more jobs than is created by the huge profits of the oil companies. We will need to use less energy, but conservation is not so hard - there is plenty of fat in the system. The money we save on energy can be spent on things that make us stronger - infrastructure, research, education, health care...
Mr. Bubble, money is nothing. It is just a promise to pay - mostly in energy and resources. That can be food energy, the energy embodied in the things we make as well as the mineral resources embodied in them and of course the energy to run our machines.
I suggest you take the Crash Course to understand better how money works in our society. By Chris Martenson, available free at http://www.chrismartenson.com/ Well worth the time to listen to all his segments. Money is loaned into existence at interest. This requires that our economy always grow. If it stops growing serious problems develop.
You might also want to watch the John Stewart clip again to understand that no one is going to do anything until it is too late, which per the Hirsch report is already true.
Here's what I don't understand.
This whole edifice of modern civilization is built upon the acquisition and use of oil, cheap oil at that.
ALL of our technology has evolved around it.
How do you propose its use can be limited voluntarily?
To me that is like commiting suicide by witholding one's breath.
I used to favor rationing as a way of avoiding the worst case scenario.
Now that seems to be just a way to keep BAU around longer.
And, just as in a gas tax, involuntary.
Remember that new technologies, the kind our ancestors would have thought miraculous, spring from new energy sources, not the other way around.
Collectively we have shown no will to do the only thing that is clearly the reality of the future, powerdown.
I think now that the hardest of crashes awaits us in the future.
How do you propose its use can be limited voluntarily?
To me that is like commiting suicide by witholding one's breath.
Because there are lot of societies that do just fine on a fraction of the oil we use. One question I sometimes ask people is whether they could get by on a 1/3rd of the oil they now use. Most people will ultimately answer that it would be incredibly difficult, but by making some major life changes they could do it. So there is a lot of fat in the system. We must first learn to live without the fat, and that could be managed to some extent.
At each level of non use there will be businesses bankrupt, jobs lost.
How does that figure into the paradigm our current systems all share, that of continuous growth?
If a company took this proposal to Wall St. they would be eviscerated.
I think the ramifications of poweringdown and using less reach far beyond the ability of our economy to withstand.
A basic reformulation of economic activity is in order.
BTW, what societies do you refer to?
How are their economies organized?
At each level of non use there will be businesses bankrupt, jobs lost.
No doubt. There is no free lunch. Powering down - whether voluntary or involuntary - will not be painless. But if it was managed it could involve less pain than if we leave it up to mother nature.
BTW, what societies do you refer to?
Look at the link in the essay on per capita oil consumption. Brazil, for instance, has about 1/3rd of the per capita oil consumption of the U.S. But I bet they don't drive Hummers 40 miles to work.
They also have a lot of very deep poverty.
They also have a lot of very deep poverty.
As did the U.S. before the age of petroleum. I am afraid I don't see any way around that one once oil supplies seriously deplete. But I do believe it is possible to have a reasonable standard of living on a fraction of the oil we use now.
Some people will live reasonably well, most won't.
The future will be lumpy.
R^2, yes, of course it's possible to live on a one-third of the blood you do now, and you did so without issue when you were, perhaps, 10 years old. But today, attempting to live on one-third your blood volume will kill you.
I pointed out before that there is a critical threshold of energy flow, all of which is dependent on oil, below which the system cannot maintain itself and abruptly shuts down. This is how people collapse (die) from lack of food nutrients, water, or oxygen. This is how your car runs out of gas or your power goes out. In each case, there are still resources available, but they become inaccessible to the damaged/depleted infrastructure.
I'm going to use a harsh example here to illustrate this. Picture a girl underwater, drowning. She's not dead yet, and there is plenty of oxygen in the water which she can't access, and oxygen at the surface which she can't access. She then loses consciousness and her heart stops. But she's still not dead yet, because only the system has stopped. The hundreds of billions of individual living cells that make up her body, heart, lungs, brain, they are all still alive and clamoring for resources from the system, which has stopped.
But what's this? The Coast Guard to the rescue! They yank her out of the water and on the deck of their ship they perform CPR, supplying oxygen and exogenous blood-pumping energy through chest compressions. The billions of individual living cells are now supplied with the blood and oxygen they need and the body springs back to life.
In order to access those resources, someone else has to NOT be in collapse mode in order to "save" you. We can't perform CPR on ourselves.
This collapse is the die-off part of overshoot and die-off. Is there a part of this process you think we are exempt from?
As for "other societies" being able to live on less oil, well, you're talking about people who lived in different social structures and under different physical dependencies, and different life experiences. When you suggest that those low-energy processes employed by those humans might be exchangeable with today's humans, you are assuming that the human brain is some sort of magic box that can change ex-nihilo. No, the brain is a physical construct which changes physically and measurably in response to stimulus, repetition, and culture.
The human brain will always be the stumbling block to getting any "solutions" in place. To understand about brains in general, read "The Brain That Changes Itself", by Dr. Norman Doidge. It talks about how the brain changes, the physical changes that manifest in brain plasticity, and how the brain continually re-wires itself throughout life. To understand what to next do about your own brain, check out "Mastery" by George Leonard. And to understand what to do about other people's brains and behavior, I recommend "Influence: Science and Practice" by Robert Cialdini.
710, very well put. It is very difficult to explain to people why we simply cannot switch from our way of living, using lots of energy, to their way of living, using much less energy. Our system has evolved over the last two hundred years and it is just not switchable. Not without collapse and die-off as part of the process of the switch anyway.
By the way I read Influence: The Psychology of Persuasion about 15 years ago. I have since misplaced my copy and am thinking about ordering another. The fact that it is still in print today, revised edition, and still a very good seller is testimony to what a great book it is.
But I have not read: "Influence: Science and Practice". Does it cover material not covered in the original "Influence: The Psychology of Persuasion"?
Ron P.
"Does it cover material not covered in the original "Influence: The Psychology of Persuasion"?"
I have not read The Psychology of Persuasion, but as I understand it they are functionally the same material. I have the Fourth Edition of Science and Practice, and I don't know what minor changes are in the current Fifth Edition.
Painful indeed, but mother nature won't be as much a problem as our fellow man.
As for Brazil my boss just returned from Sao Paolo and you really couldn't have chosen worse example, pardon my saying so.
They have a huge population of absolutely wretched poor, which no doubt skews the per capita numbers.
Crime and organized gangs are just about everywhere and strangely, the gangs in their feud with the police seem to pick on buses, the only form of transport for many, chasing of the passengers then torching them, usually at rush hour too(my boss admits to it always being rush hour there).
Downthread a poster refers to Cuba as a good example but admits to totalitarianism as the means to their powerdown.
Now who is going to vote for that? ;)
I think it is likely that some populist dictator somewhat like Huey Long will be elected president in 2020, by which time oil production will have fallen significantly from current levels and also when ELM2 will have done its thing to cut U.S. imports of oil and oil products by a much larger amount.
If it does not happen in 2020, then my guess is that it will be 2024, when the economy has declined perhaps 20% or more from its level of four years previous and more than 50% from current levels.
By "the economy" I mean real GDP per capita in the U.S.
I didn't admit to that, I was accused of it. I simply pointed to Cuba as an example of successful, rapid powerdown. I don't see why democracies can't do the same, or better.
I don't have a view on whether socialism or democracy would do better but Cuba's neighborhood councils were instrumental in their response. We have nothing like that and will have to form them as we go. Perhaps the Transition Towns structure will help with that, or similar.
Socialism and democracy are not incompatible. But I agree that Transition Towns might help.
Can you cite a single example of a country that is both fully socialist and is also a democracy?
Please, Don.
YOU inserted "FULLY SOCIALIST" into this discussion, which was not necessary to apply to what was said.
We have far too many discussions here that get conveniently hammered by someone installing just such an Extreme interpretation of the other's point.
.. and This is fine, if we WANT this to be 'discussion for discussion's sake' .. if we are insistent that we can't be imaginative and creative, to help find new combinations that will move us forward.
Oliver Stone and Tariq Ali have just been promoting their new Documentary "South of the Border", in which they interview the leaders of several South American Nations, and show how many of the 'Socially Conscious' to 'Socialist' ideas are growing with these fully democratically elected leaders, and frequently in the face of US attempts to undermine the unity between these very different nations, and to undercut the leaders themselves.
http://www.democracynow.org/2010/6/21/academy_award_winning_filmmaker_ol...
It's ALWAYS shades of Gray, Don. ..and if you think 'Socialism' has some interesting hues, then what can we say about 'American Democracy', considering how many times we've OPENLY undermined it in countries with resources we adored?
O.K., strike the word "fully." I'd still like to have my questioned answered.
Note that countries such as Sweden are not socialist at all because the means of production--land, labor, capital and human capital--are all in private hands. Sweden is correctly described as a welfare capitalist country with high tax rates to finance numerous programs to enhance the security and well being of its residents.
Cuba? Nope, a dictatorship. The U.S. Pentagon? Nope, socialistic but not a country. Public schools in the U.S.? Socialist, yes, but again, not a country, just part of the economy.
IMO you and others are stumped to come up with a real-world example of democratic socialism. Hence, it is just a hypothetical case--and hence not very interesting.
If the original comment that 'Democracy and Socialism aren't incompatible' gets to be diced with your imperatives on their adherence to Marx Engels manifestos, then you can surely define away any challenge you like.
That's the problem with shades of grey. They don't fit into idealistic petrie dishes.. particularly when previous moves in Latin America that had distinct Socialist ties quickly brought in American guns or proxies.. but the direction remains constant, and 'Socialist Tendencies' are cropping up across a chain of functioning democracies.. and the discontinuity is NOT apparently these to systems, but the fears of the Oligarchies in the 'Great Democracy' to the north, who reveals more shades of Dictatorship when seen across the prism of the Equator.
http://www.democracynow.org/2010/6/21/academy_award_winning_filmmaker_ol...
I'm only stumped to find you engaged in clinging to such inflexible definitions..
For definitions of ordinary words, I look in the AMERICAN HERITAGE DICTIONARY. For definitions of more technical terms, such as "welfare capitalism" or "democracy" or "socialism" I look in the appropriate technical books, especially widely used college textbooks.
There is nothing inflexible about correct definitions. I am very careful in my word usage.
Sometimes getting stuck on the definitions costs you hearing what is being said. Forest and Trees, Don.
"There is nothing inflexible about correct definitions. "
You play a different tune down below.. but maybe looking at 'Socialist tendencies in Democratic states' doesn't apply to this flexibility of terms, because it doesn't really bear on 'sociology'.
Surely after the healthcare 'discussion' this year, it's clear enough how broad the definitions of 'Socialist' have become. And when our own elections have gotten so convoluted that Jimmy Carter's election watchers couldn't even consider them viable for gauging, then clearly 'Democracy' comes on a sliding scale (slippery slope) as well.. and one which the American Heritage Dictionary would hardly have the subtlety or candor to address.
- I do recommend watching the interview with Stone and Ali in full. It certainly engages the issue you challenged us on.
"I didn't get a harumph outta that guy!" - Gov. William J. Lepetomane
I do not and will not contribute to the debasing and corruption of the English language. Usage matters. See the famous essay by George Orwell, "Politics and the English Language" or take a look at newspeak in his novel 1984.
From the time of Confucius and Socrates the importance of clear definitions to logical thinking has been emphasized. Indeed the Socratic dialogues with Plato are largely about clarifying definitions--e.g. "What is love," which got several answers in "The Symposium" by Plato.
Here is a perfect example of why Americans (in particular) are deathly afraid of Socialism: they confuse it with Communism.
As a native Brazilian, born in São Paulo, I won't dispute the fact that there is extreme poverty, gang violence and a myriad of other deep social problems that go with being in a city of 20 million inhabitants. Having said that I doubt that your boss went to the parts of the city where he was exposed to the underbelly of the city. As for gangs, I can take you to places in Miami where I live now, that would make the hair on the back of your neck stand up... I've lived in a few other large US cities that are even worse!
No offense but anyone who thinks that is the predominant situation in São Paulo, is full of it!
My 76 year old mother still has a home there and often commutes by city bus. When I go there I do the same and there is an excellent subway system too. São Paulo, is also a vibrant international city and cultural center for Brazil.
Very impressive images.
As for comparison, I was born and raised in Detroit and live just a couple miles North of there now.
In many parts of my hometown just my white skin identfies me as target for crime.
Here, unlike Sao Paolo I'm sure, race matters alot.
My boss, on the other hand, actually chose to buy a home in the city, albeit one of the "nicer" areas.
Still the steady theft of his vehicles, the beatings and robbings his kids endured and the staggering property taxes he paid were taken in stride until the mayor he campaigned for, Kwame Kilpatrick, disintegrated in a notorious scandal.
He jumped at the chance for the international assignment.
Yet he was cautioned to not take a ground floor apartment in the housing structure he chose because of the likelyhood of break ins and worse.
This is in one of the areas professionals reside, Santo Amaro, I believe.
Then the Overseas Security Advisory Council must be since they state:
And
At any rate, the high numbers of poor without access to transportation make my original statement stand without retraction.
It sounds worse in Rio.
Why dont you bring your Mama here?
My mother is a US citizen, she prefers to live in Brazil.
As for your other comments, I didn't deny the problems, they are very real.
I have also lived in Rio, yes it too has its problems...
You could say the same of any large city anywhere in the world, I was attacked and mugged on Park Avenue in New York once. I have also enjoyed Samba, beer and cat barbecue (Brazilian colloquiallism) with some truly wonderful people in the shanty towns of Rio and on a different day those same people, might be just as likely to hold up a gringo or a well to do Brazilian business man, at gun point in order to survive.
I haven't been to New Delhi but I imagine the same conditions apply. Population overshoot and the consequent social inequality is a fact of life all over the world. Unless we deal with it somehow we are all F**KED!
In my Dad's work ethic, it is get the Hrad things done first so that you have more time to be lazy later, (though he rarely is the lazy type).
As a Nation and as a People we have gotten used to getting the easy stuff done first and then having to tackle the hard stuff later, and then never getting it done.
Somewhere the work ethic of people like my dad got bred out of the generations that followed. Laziness is everywhere, people doing only what they need to do to get by, and nothing more. Why help the guy next door, I don't even know him. Why lift a finger when someone needs help, why do more than I have to, to get by. Me first.
So now we are paying the piper for what we tried to avoid paying him the first time he asked for his wages.
The when it all happens is a given, It will happen in the future, and everyone knows if it can be put off till tomorrow, you are going to do that first.
I am already seeing the suffering masses around me, helping the homeless, and jobless can be a downer most days, when You can't help them more than giving them a hug.
Charles,
BioWebScape designs for a better fed and housed world, one person at a time.
Hugs from Arkansas.
It could be done, but only if the country thought it was responding to s foreign existential threat. Then the government would be given enough power to do whatever it took to get it done, and keep people working on something. Baring, that, you are right, the proposed change is much too rapid, twenty years might be more realistic (do we have that long?).
Per the Hirsch Report we need 20 years BEFORE Peak to prepare. We are too late.
http://en.wikipedia.org/wiki/Hirsch_report
The Hirsch report, the commonly referred to name for the report Peaking of World Oil Production: Impacts, Mitigation, and Risk Management, was created by request for the US Department of Energy and published in February 2005. It examined the time frame for the occurrence of peak oil, the necessary mitigating actions, and the likely impacts based on the timeliness of those actions.
The Lead Author, Robert Hirsch, published a brief summary of this report in October 2005 for the Atlantic Council...
Mitigation efforts will require substantial time.
Waiting until production peaks would leave the world with a liquid fuel deficit for 20 years.
Initiating a crash program 10 years before peaking leaves a liquid fuels shortfall of a decade.
Initiating a crash program 20 years before peaking could avoid a world liquid fuels shortfall.
All this ignores our "other" imported oil.- Plastic - TV's, computers, I Phones, clothing, sleeping bags, toys, etc., etc. How much of China's imports end up here in the US?
I wonder what we truly consume?
The decline is going to happen anyway. It has been foundational logic on this site for many years that it is better to reduce consumption by choice than to be forced to by circumstance (supply/price etc).
I like that term "foundational logic".
I wonder if the user name Hari Seldon is taken..
Why? Are you planning on starting a new galactic empire?
The major means to cutback oil usage is taxes not rationing.
This can also be phased in over time with say 10 cent per gallon increases
in federal gas taxes over time until we reach at least $1 per gallon.
We CAN cutback initially fairly quickly if we move people out of cars onto
public transit. This happened in 2008 when gas prices hit $4 per gallon-
public transit ridership increased 17%!
In many metropolitan areas there are already primarily ELECTRIC trains
in place BUT they run very infrequently or not at all on nights and weekends.
The tracks exist, enough trains exist to serve frequent peak hours.
Transit agencies just choose not to run them in order to save conductor,etc costs when their tax revenues are in crisis.
The other barrier to more public transit use is the last connection - there
need to be shuttle vans and buses from train stops to key destinations which could be supplied by our dying Auto industry.
Another way to increase transit usage is to engineer local/express service.
20 years ago I could actually reach Hoboken, New Jersey and Midtown NYC
in 52 minutes with an express train whereas now it takes well over an hour,
and an hour and a half or more for "Midtown Direct" to NYC as they cut
Express trains to Hoboken.
Transit agencies have to stop seeing trains as "Commuter Trains" and therefore
engineer all service for work rush hours and instead see them as the normal
way to get around 24 hours a day instead of roads.
Why does Europe use just slightly more than half the energy per capita as the US? They have frequent public transit with local connections everywhere!
Along with high-speed trains and extensive and frequent intercity train service to reduce flying which is the most oil-consuming transit mode of all.
Oh yes, and let us not forget the Oil wasted in Wars for Oil!
The US Air Force uses 2.5 Billion gallons of aviation fuel per year!
See http://www.commondreams.org/view/2010/06/14-1 for more on the major
wastes of Oil by US Wars.
Politically most Americans would love not to waste over 50% of their federal
income taxes on Wars.
But this topic is the elephant in the room along with Auto Addiction for the
Corporate Media.
For example 16% of BP's oil sales are to the US military.
To stop endless Wars for Oil which burn very greater quantities of it up
is a no-brainer as part of how the US could cut our oil consumption by more
than 50% in a few years.
Yes…,our mass transportation in L.A. is lousy. All our Metrolink trains go to one central hub in downtown L.A.
Great, but what if you’re not headed to downtown? What if your destination is Orange County? You have to travel 20 or 30 miles out of your way through downtown L.A to get to somewhere in Orange County?
Yes!
And we have no local connections.
Most everyone has to drive at least several miles maybe ten miles to a parking lot to get to their local stop to board an over priced train.
It's a stupid spider web passing through downtown. We need to learn a few lessons from Europe and Japan.
L.A. is getting better; additional twenty lines planned. Orange County will be left behind if its transit board remains blind to our energy situation. Maybe one day we will have what we had in the 1920's.
Let's hope that today's agencies don't become as hated, for whatever modern reason, as the Pacific Electric became on account of all its exploitative real-estate shenanigans. I've said it before, many people practically danced on its grave.
As I am sure you know, Henry Huntington (my city's namesake) founded the P.E. Railway and used it to sell property in the hinterlands. He built the Big Creek hydro power plant to supply the electricity it needed. I had a tour last year. It is now owned by Southern California Edison. Today's transit agencies are public.
Funny!
The rail barons, the hated,despised monopolists of their times are now held in great esteem by those who would've cursed them had they been around then.
I guess BP has a future after all!
Pure evil is just as rare as pure good.
And now they idle in traffic. :)
Debbie, Great post of the Pacific Electric map!
In Switzerland, virtually every railroad line ever built is still in operation, modernized and electric powered. There are hourly trains on rural branch lines and dozens of suburban or intercity trains each hour. Where the trains can't or don't go, there are postal buses on synchronized schedules.
Switzerland learned the lesson or energy insecurity in WWI, when coal became scarce. Electrification was largely accomplished prior to WWII -- by a very small country. The system is a source of great national pride.
Look at what we have here -- 75 years of mal-investment in suburban sprawl. Obama was in Ohio on Friday celebrating the 10,000th shovel-read highway project as part of the stimulus. Plus we have a grossly over-sized military that serves as enforcers of the status quo on the rest of the world.
The only thing "shovel ready" about the one party rule we have in the US is the hole they are digging for their constituents. And as long as American Idol and Facebook are still up and running, most people don't even notice or care.
Really? What lessons could those be? The Paris Metro is a "spider web passing through downtown." In fact it pretty much serves only downtown, the two million people living in the 30 square miles of Paris proper, out of the 10 million living in the immediate area. Everyone else must use the RER if they have a train at all, and those lines converge on Paris proper.
Ditto, more or less, for the Tokyo Metro - outside the small part of the Tokyo region it serves, there are mainly the suburban trains of JR East. Those are very efficient and on many lines are frequent, but then again, we can have that too, by somehow persuading (or frog-marching), say, the entire population of California, to cram into one typical-size Eastern-US county. (On another hand, that would upset those doomers who want to frog-march folks to farmettes instead.) Oh, and to pay for it we'd probably have to charge JR-like fares since our capacity to give it away practically for free and put the tab on the never-never seems to be diminishing.
As usual, no simplistic easy cost-free answers.
In the decline phase any place connected by electric train is somewhere and if not, its nowhere
orbit, please "wrap" your comments. they take up too much space visually when whatever interface you are using has a hard return after 80 characters or so.
ROFLMAO. 17% of what? 17% of near-zero is near-zero. Noticeable in a tiny handful of localities but immeasurably small effect on the national picture, which is what is under discussion here. And with a deep recession now visibly well under way and tax collections tanked, providing service practically for free - which is really how we got people to use it - seems to be more problematical than in 2008.
Give it time, Paul. People change their beliefs about the future only slowly. And they were right to do so in this case--the price collapsed after the spike.
If $4-plus per gallon had persisted from July 2008 till now, ridership would be up several hundred percent, possibly to noticeable numbers.
Price volatility is the real problem. It makes it hard to predict things, so both drivers and transit providers just 'wait and see'.
The major means to cutback oil usage is taxes not rationing.
I have been a strong advocate of raising gas taxes for years:
http://www.theoildrum.com/story/2006/9/18/12529/1219
Assuming that we are still talking about the US:
BTS | Table 7: Journey to Paid and Volunteer Work
I believe it is obvious that BAU cannot continue with a large reduction in available petroleum supplies. And, this should have been the second thing in the president's speech; "...and to accomplish this we are going to (insert things such as reduce the work week to three days, provide assistance to up-grade insulation, blah, blah, blah)."
In fact I would argue that the proposed changes should be the first thing addressed followed by "so that we can reduce our use of petroleum."
Further, many/most people and governing bodies such as cities will not have the funds to make significant investments to reduce energy consumption. This also needs to be addressed out front.
My expectation is that the new society will hardly be recognizable after all the changes are made.
Todd
Yep.
At the individual level, for many people. scaling back oil use is not hard. We use a boatload of oil for transportation, meaning, driving cars.
First, if you regularly drive some distance that is smaller than 10 miles (whether to work, or chores, or whatever) you can replace that with a bicycle. You probably need the exercise anyhow. The median US commute is around 11-12 miles (hard to tell, and it changes over time), so there's a lot of potential car trips that can be avoided. One-third of the US population lives in places denser than Assen (Netherlands). (How do I know this? At least 40% of my work commutes, 10 miles one way, I do by bicycle, in Boston weather on Boston roads filled with Boston drivers, all suboptimal).
Second, drive a smaller car. When biking, I get passed by many cars, when there are traffic jams, I pass many cars. Most of them are single-occupancy, with little or no visible cargo. Often the "car" is a minivan, SUV, or truck.
However, I think you are right about the potential economic effects, but maybe through a different mechanism. I already cut my car mileage by 1/3 (that's not enough, but bear with me, please). That means my car will last about 1/3 longer, and I cut my gasoline consumption by 1/3. All the exercise I get, means there's no way on earth I'd ever pay for a gym membership. Furthermore, it reduces the need to deal with various chronic medical conditions that occur later in life. Suppose, hypothetically, 1/3 of the country (the 1/3 for whom it is easy) behaves in a similar way -- that's about a 1/9 cut (11%) in oil and gas revenues, and quite likely something similar for chronic-condition drugs.
So, in some large US industries, a semi-plausible (requires no new technology, does require some individual initiative) but inadequate effort, results in a permanent 10% drop in revenues for several major US industries. An adequate effort, meaning, what you get with infrastructure improvements and a critical mass of cyclists (as well as, perhaps, either e-assist or aerodynamic pedalcycles, both available now at unfortunately high boutique prices), and they take an even larger hit. When I see car companies advertising futuristic hybrid people-pods, I don't see innovation, I see desperation. I see those people carriers in Wall-E. A bike is great transportation, especially bikes made with modern technology (kevlar-belted tires, LED lights, wide-range internal geared hubs) -- fast enough in semi-urban areas, doesn't actually require a road, you can repair it yourself, you can "tow" it yourself. Cargo bikes can carry people*, groceries*, dogs, ladders*, kayaks, firewood*, a bathtub, shrubs*, even (I have seen the picture, though I think it was a stunt) a washer and a dryer. The auto companies would much rather you buy one of their pods. (* = stuff I have carried)
And, sure, maybe I don't understand the needs of "real people", maybe I am some DFH with no life. Or maybe I agree with Tom Toles' recent cartoon, maybe I am old, have a family, too many degrees, and engineering background, and have lived in several parts of the country, both wet (Tampa, Houston) and dry (California), hot (Tampa, Houston) and cold (Boston), flat (Tampa, Houston, some of California) and hilly (some of California, Boston).
We need to get our oil habit under control. We have the means to do it, and it's less of a sacrifice than you'd think if you get through the first two months (investment in your personal engine is tough, and even four years in on this, I still notice slow improvement). I am frankly mystified at our inaction -- it is completely counter to all of our favorite patriotic myths, and the people most fond of those myths, also seem to be quickest to belittle the use of bicycles. Why? Individual action, personal initiative, physical strength and fitness, and independence. What could be more American than that? Do I need to put a flag bumper sticker and magnetic yellow ribbon on my bike, too?
Would it be the end of the world if:
(1) mothers left home 15 min earlier and walked their kids to school
(2) long distance commuters spent 5 more minutes giving neigbours a lift and organised car-pooling
(3) shoppers used still existing corner shops instead of driving x times a week to distant shopping centres
(4) car-free days were introduced and people took to their bikes on convenient days - not too hot, not too cold?
Would that be harmful to the economy?
Come on, develop some creativity, we need to bring those traffic numbers down otherwise we get more freeways built!
Not the end of the world at all. Just, at least in the USA, death by a thousand cuts. Your UK mileage may vary depending on where you live.
(1) Mothers are often already desperately short of sleep. School is very often not within a "15 minute" walking distance, not even close. I think this might be true to some extent even in the UK, since the factors that lead to huge distant megaschools come into play everywhere (one of those factors being utterly limitless "disability accommodation" mandates that can not possibly be supported any longer by a small neighborhood school.)
(2) The days when large numbers of people commuted to the same place at the same time are largely gone. The highly unionized factory drudge jobs where they all left right on the dot at quitting time have largely decamped to Asia. At many jobs, you can't count on getting off right on the dot every day. So it will usually amount to a lot more than 5 minutes of waiting around (or else monstrous taxicab bills), and people are not seeing their children enough as it is. If it were just a matter of snapping one's fingers, we'd see it done more than it is, which is hardly at all and even less than it used to be.
(3) What "corner shop"? Just because TOD has a regular contributor from New Orleans, do you think the USA on the whole is Victorian London? The most frequent shopping trip would be for groceries and the like. So do you mean doing the grocery shop at the chain convenience store that charges triple for everything and has a very limited selection of stale stuff that's bad for you?
(4) Either those "car free days" are voluntary, or they are mandatory. If they would be voluntary, no need to worry, the very idea would be studiously ignored as more asinine fulmination from the nutters. It might go slightly better in Berkeley, CA, and Madison, WI, but that doesn't matter; those places are notorious for being not quite part of their surroundings. OTOH if they would be somehow mandatory, then, well, the USA is not Europe despite what casual foreign visitors to New York might come away thinking - the average commute is something like 12 miles one way. In part that's because there's little history here of being jailed within narrow precincts by ubiquitous international border controls or by local residence permits; we don't even have residence permits. (Also, with any mandatory component at all, we'd be needing a whole new massive bureaucracy to decide who was to be exempted by "disability".)
Oh - and yes indeed, the USA is getting roads built. (How about the UK?) It's called "stimulus", which was to be spent on "shovel ready projects." The orange barrels are everywhere. (I think Limeys refer to such installations as "road works", which would be something of a misnomer here in that, at most of them, most of the time, no one is even present, much less working.)
You've elevated "we can't, because" to an artform, PaulS.
Cuba made a successful transition to a low-oil economy when the Soviet Union collapsed. It wasn't painless, but they didn't collapse:
http://harpers.org/archive/2005/04/0080501
Cuba is a country with a totalitarian dictator and 1950s automobiles, it's not exactly what I would deem "good quality of life".
The point is that Cuba made a very rapid transition from a system that had lots of subsidized subsidized fuel to a system that didn't, and they did not crash. They accomplished this by switching from highly mechanized agriculture to organic farming. Totalitarian or not, they have enough to eat, and are as healthy as the US. And yes, they can't afford many new automobiles, so they do a great job of keeping the old ones running.
Are you saying that democratic countries are less capable of managing such a transition?
Here is a more scholarly take on the whole subject.
http://www.unicamp.br/fea/ortega/energy/Folke.pdf
In Ortega, E. & Ulgiati, S. (editors): Proceedings of IV Biennial International Workshop “Advances In
Energy Studies”. Unicamp, Campinas, SP, Brazil. June 16-19, 2004. Pages 37-64
RURALISATION A WAY TO ALLEVIATE VULNERABILITY PROBLEMS
Folke Günther
Holon Ecosystem Consultant, Kollegievägen 19
224 73 Lund, Sweden, Ph: +4646141429
URL: http://www.holon.se/folke/; E-mail: folke@holon.se
I don't think scaling back oil use is all that easy.
I think you misunderstand, Gail. If it was easy, we could have done it already. It is hard, but the bottom line is that the reason we aren’t energy independent is our usage is far higher than our production. Failure to bring usage in line with production is the failure of those eight consecutive administrations.
Gail, et al —
What we have here is a lack of imagination, while the neocons have imagined it already.
The economy has already done what you describe as impossible.
I live in a WWII housing complex, and I've worked as a volunteer restoring one of the Liberty ships (The Red Oak Victory) that were built while the economy was seriously devoted to a tremendous change in priorities.
Now, you may not be able to imagine such a huge change in direction, but Osama Bin Laden did, and he made it work. Review his elation on Google.
A closure of the Persian Gulf to oil tankers? Concerted sabotage of all the major oilfields in Mexico, Venezuela, Nigeria? Matter of a few dozen RPGs and some dedicated volunteers. They could even be American patriots who had a moment of practicality in their planning for a new American style.
Get out more. Americans are coming around to a realization of their incredible luck of consumption choices, and the impending decrease in those choices of home, transport, and leisure.
The best bet is the carbon tax precisely because it's confusing. Direct taxes on fuel are too easy to spot.
We'll do it or die as a nation. I don't really care about whether we get our fuel here or there, but the atmosphere demands we use less of it. I wish OPEC would just man up and raise prices...
Ormondotvos;
Was your Liberty ship built in the South Portland, Maine yards? We made a huge amount of them here, and I'd love to know where some of the survivors are.
Bob Fiske
I live in Atchison Village. Google for the story.
Right. All your water's on the wrong side.
Reminds me of dear Mehitabel, a fine old Maine Lady who always said she'd get to California before she died, and we heard that she just made it. Apart from the rest of that tale, she was asked on arriving in Sacramento just how she liked California, and she reported that 'It's fine, it's just too darned far from the Sea!'
I believe Marshall Dodge gets credit for that, but no credit for being from Massachusetts..
Have you seen the latest EIA projections for US domestic oil production? Domestic output up, import share down, all thanks to deepwater production. This puts Obama in a corner.
Here's my analysis: http://tinyurl.com/2aqv7hn
A few thoughts along those lines.
How many people that now live here, that have moved here into the USA over the last 20 years, are sending their paychecks or large portions of money to their relatives in other countries?
How many USA citizens have desided to live in other countries, basically still getting paid for jobs or retirement from US firms or Gov't, but are now spending that wealth in other countries?
How much has this hampered Sales Tax receipts in the USA?
How has the unemployment or under worked of up to 17% of job aged people done negative things to the structure of the country?
How has all the debt defaults done to the system that holds it all together?
Each snowflake is okay, but when the ball gets big enough it starts rolling downhill, and picks up speed as it grows and gets further down the hillside.
I see this all as the snowball just starting to roll downhill.
Charles,
BioWebScape designs for a better fed and housed world, For whoever that needs it.
Hugs from Arkansas, It is night time cool at last.
On your way to a 70 per cent reduction you (americans) will pass by most european countries, who consume about half as much oil per capita - having the same living standard as the average american.
So - it's not all that bad.
As has often been said here, America has infrastructure designed for current levels of consumption. I suspect that moving even to average European levels is going to be more economically painful than it is for current Europeans. That's not to say that reduction shouldn't be done, but a prerequisite appears to be an public acceptance that the pain of restructuring for reduced oil exports will still be less than the pain of not doing so. The UK faces the same problem to some extent -- I've just been to a job interview at a business park in the middle of nowhere that's predicated on people being able to drive in in their own cars. How will that fare when petrol hits 2 pounds per litre, let alone higher...
Well, in the UK the average fuel consumption for a car is about 35mpg (Imperial). You can buy today an 'average' sized European car that will do 70+mpg using diesel fuel.
So in theory even Europe could halve its domestic transport fuel bill in about 15 years if every new car used half the fuel of the one it replaced.
This is of course simplistic but not by much. The US drives bigger, thirstier cars. These could certainly be replaced with European sized cars (If a few of the safety and emissions standards were reduced to European levels) and cut consumption by more than half in 15 years. Of course, you would need to retool every car factory in the country... and you can only get so much diesel out of a barrel of oil.
If you cut safety standards back to , say, 1980 levels and accepted lower levels of comfort and smaller than European average cars, you could probably cut consumption in half again with only modest drop in quality of life.
That would give you a couple of decades to restructure your infrastructure before the oil ran out...
Can't be done until/unless it's forced. Spending $100 to get $10 in "safety" is now a legally entrenched religion in all developed countries, with the smallest heresy sometimes punishable as a felony. The oil spill will be used as an excuse to compound this, same as the one-in-a-million chance of getting a tummyache from that US meat scandal last year is being used as an excuse to make life difficult or perhaps eventually impossible for farmers' markets in the USA. (Europe, with its spend your whole life jumping at shadows "precautionary principle", is no better. Surely you must know this from all the utter "ealf'n'safety" rubbish in the UK. Last I heard, there were exoskeletons coming into use for kids to play bloody soccer, and that's filtering a bit into the USA.)
Wow, I actually agree with you on something.
Meanwhile, we subsidize meat and corn production, which are killing many more people than what reasonable safety standards would.
Regarding safety standards, it's been estimated that, if you regard death from diseases of the unfit (heart disease, stroke, diabetes, some cancers) as a risk to be avoided, that an automobile is at least 10 times as dangerous as a bicycle, crashes and all. So much for "safety".
Where on Earth did you come up with THAT stat?
EDIT Surely you meant 10X more dangerous to a bicycle?
Mayer Hillman. Here's an article about him: http://www.guardian.co.uk/theguardian/2002/nov/02/weekend7.weekend2
I've been working on tracking down the reference, but I cannot find it online. "Cycling: Towards Health and Safety BMA, Oxford University Press, 1992"
Accounts that I have read indicate that it, and its methodology, are reliable. The actual ratio varies a lot from country to country because the denominator (cycling crash rate) is variable.
If you look at the various causes of death, diseases of the unfit (heart disease, stroke, diabetes, etc), you'll discover that they kill an awful lot of people. If you ride a bicycle for transit, you (1) slightly increase your bicycle crash death risk (it is a small number), (2) slightly reduce your automobile crash death risk (it is another small number, per-hour not that much different from cycling) and (3) reduce your risk from diseases of the unfit, which is a large number.
In terms of danger to others, just looking at causes of pedestrian death, it appears that cars about 20-40 times as dangerous as bicycles.
Another non-intuitive factoid, probably true, is that time spent cycling is paid back directly in (expected) extended life. That is, if you cycled for 10,000 hours (one year), which works out to 4 hours per week for 50 years, it would not be surprising if your life expectancy were extended by one year. I ride at about the level of effort, and since I use it for my commute, I am actually only paying half -- if I were not on my bike, I would be driving my car for about half that time, getting fat.
Really, truly, I am not making this stuff up. You car is bad for you, bad for other people, bad for the country, bad for the world. But hey, it will help you tow that boat you don't own up that mountain you don't live near.
I am dead serious, we need to quit being a nation of wusses whining "I can't" and "it's too far" and "it's too cold", and get off our ever-widening asses. Yes, some of us have nasty commutes, some of us live on the wrong side of a 10% grade, but a whole bunch of us do not. A non-trivial fraction of the US population has a 5-mile commute; that's bikeable, right now. Can't figure out how to do something on a bike, ask around on the internets, there are forums, people can help. And if you think it is too hard (in particular, too dangerous), demand better infrastructure.
Sure the car is bad for you, if you think driving them is bad for your health try designing them.
But I don't buy your assertations.
How about "its too dark" or "its too dangerous"?
Based on my experiences of two Summers of suburban bicycle commuting, it is simply too risky.
People driving to work, hung over from bowling the night before fly into a rage at the sight of someone on a bicycle.
Also all the health benis vanish after sucking in 10 miles of tailpipe emmisions.
Then there's the association with the fools who insist on riding roads that aren't dual purpose, one was killed here last month.
I used to see him riding 6 inches from the curb on a major surface road daily - cars blaring their horns, whipping by him.
It's almost like he had a deathwish.
Now some poor grandma has to hear his dying gasps for the rest of her life.
As long is oil is available and cheap, I'll be choosing the safe option because that is the rule of the road.
Even given the not-good bicycle crash rate in this country, more people biking would result in a net reduction of years of life lost, because it is so incredibly unhealthy to not get enough exercise. Driving is not "safe", unless we make distinctions between "unsafe" ways of dying (crash) and "safe" ways of dying (heart attack, stroke, cancer, complications of all of these). I don't make that distinction -- my definition safety revolves around reducing death and disability, period, and cars score pretty low on that scale.
I'll buy the book, it is on Amazon.
And, obviously, avoid the dangerous roads. Are you yourself a fool? If not, then you will only ride on safe roads, right? Why would you say "fools ride on dangerous roads" as a reason for your own use of a car? Look at your arguments, ask yourself why your brain is working so hard to churn up excuses, that you would say something like that.
If you want to maximize the net benefits of cycling, certainly, you aim to reduce the "costs" as much as possible, so certainly, avoid riding on dangerous roads, and prefer daylight, and really be careful after the bars close. If your personal commute forces those choices, then maybe cycling to work is not for you. But most of us work the day shift. Secondary to getting off our asses, is to do something about the status quo that makes it acceptable for people to drive quite so carelessly, so that there are fewer dangerous roads. If tailpipe emissions are foul, lobby your state for regular emissions checks -- modern cars smell pretty good, if they are well-maintained. (Training to race back in the 70s, if a monoxide-mobile lingered in front of you for too long, you'd about want to throw up, it was so bad.)
As to the dark thing, modern LEDs are wonderful. I run a bunch of them on a generator hub, they are always on, which seems to help during the day, too, since the largest cause of car-bicycle crashes is "I didn't see him" (I made my own lights -- I'm a lapsed EE, and retail bike lights are horribly expensive).
I'm probably only foolish in continuing this thread.
What I stated is only plain common sense.
Only a fool would ride his bike on a street that has no provision for them during periods of high traffic or at night, lights or no.
Lights won't help you when the driver of the Jeep is too busy with their phone to pay attention to what's on the road ahead of them.
Unless bicycling is done en masse smarter folks such as yourself can blaze the trail for me.
BTW what kinds of jobs do you think you will be pedaling to, should there be a 70% reduction in oil use by our economy?
It's a little more nuanced than that. High, fast traffic is unpleasant, and somewhat more dangerous. It's not as dangerous as you think, what tends to kill adult cyclists is turning traffic, not getting run down from behind. This misperception, which comes from our gut, is (I think) the main reason that "effective cycling" has failed in this country; your guts don't do statistics, they just demand to be heard, and if you don't get used to riding in traffic at an early age, you will probably never overrule your gut (but your gut actually is wrong, and the crash statistics say so). The effective cyclists tell people to ride in traffic, and most adults try it at most once, and quit, thinking that the EC-ists are f*cking crazies.
High, slow traffic, especially a traffic jam, is not so bad. It boils down to details of road construction, and road width. And you won't get a consistent answer from existing cyclists about what is best; it is actually a matter of personal taste. I will tolerate higher traffic speeds and volumes, if I get more room (where "more room" is relative -- a 2-foot wide gutter/lane is adequate, for me, though 3 is nicer, and 4 is nicer yet. The curb also matters; if my path is constrained by a nasty granite curb, then I need more room to be safe). Other friends of mine prefer roads that are narrower, with less (but not zero!) traffic, and much reduced sight lines (thinking of that guy in texting in the Jeep, I prefer to give him as much time as possible to notice I am there, I think the opinion of my friends is that anyone texting on a twisty road will hit a tree first, which could also be true).
But anyhow -- the roads are not all dangerous, and you overestimate the danger anyhow. Part of the problem is that the ways you know to get places, are in a car, and the best route for a car is not the best route for a bike. There may well be non-dangerous routes that you simply don't know about. And if all the roads are in fact dangerous (I know a few places like this), then you do not bike. But: you can bike in Silicon Valley; you can bike in the Boston area; you can even bike in parts of Houston.
What jobs we have, after a 70% reduction in oil use, depends very much on how we get to that reduced-oil state, which is one of the reasons I think it would better to get more people on bikes. You can displace a good fraction of car miles with a bicycle, enough to get you within striking distance of that 70% reduction, if we also downsize cars, hybridize cars, etc. If we don't do something to make our demand for oil more elastic, when the crunch comes, prices will soar, the guys who own the oil will make out like bandits, but our economy will be trashed.
And, also, I am not exactly blazing a trail for you. To get many people onto bikes (with all their guts demanding to be free of overtaking auto traffic), we need more bikes-only infrastructure, and greater separation from cars when the only accommodations are on-road. This is what worked in the Netherlands. I don't need that, though I would like it. I've been riding seriously for almost 40 years (racing, touring, commuting, that sort of thing), and what that gives me is a large investment in street smarts (anticipating problems before they occur) and in bike handling skills (able to ride through small potholes no-hands, able to recover from skids, able to recover from minor collisions), and in knowing what bike to ride (it's a longtail cargo bike, with huge fat slick tires. Big fun, also big comfort, and big safe). In some sense, I've got mine, and I am only suggesting that "you" might like it, too, and that you could ease into it, starting small, gaining skills, gaining muscles, and increasing over time. I do make a point of riding in "normal" clothes usually, so as to let people know that lycra and weird shoes are not required (I rode in flip-flops yesterday and today, just for grins).
And seriously, even with our crappy status quo, not getting enough exercise is still more dangerous than riding a bike (averaging over all bike riding choices in the real world, and assuming standard levels of caution (or not) on a bike.) A whole bunch of people die from cardiovascular disease and its ilk. Your gut is not a statistician, and is easily misled by sensational information.
Nonsense! If our economy had been built, from the very foundation, on less energy then perhaps you are right. But the American infrastructure is built around cheap oil and lots of wide open space.
Of course we could tear down that infrastructure, abandon everything and build a European style America. We could have everyone abandon their homes in the suburbs and move into much smaller "flats" nearer their work. Which would mean millions of new flats would need to built. People could abandon their cars and those who could afford it buy much smaller cars.
But of course all this would cost enormous amounts of money and energy. And with millions being laid off from their jobs, no one would have any spare money and the tax rolls would dry up as well.
And as Gail points out above, everything in the economy is interconnected. Without energy less would be produced and those producing all that stuff would be out of a job. And when they stopped spending money more people would get laid off. There would be a positive feedback that would not stop until we hit rock bottom.
Ron P.
WE are stuck between a rock and a hard place. We will likely just keep on doing what we have been doing for the most part, and then when we can't use it because we don't have it, we will wonder how we will ever live without it.
Though I know several people that won't even notice when you can't buy gas any more, they will only notice when you can't buy food anymore. They don't drive, don't have cars, walk to the bus stop, or catch rides with other people. Likely if times get to hard, they will be the first to die or be homeless in the underpass bridge boxes everyone talks about the homeless sleeping in. Most sleep against walls and under bushes in these parts, if they are forced to sleep outside.
The USA should issue land to people, free and clear, only having to pay the taxes to the local county/state. 310,000,000 people should get 1/4 acre per person, giving land next to each other to a family. If you already own land via deed, you don't get any more in this program. You have to be a citizen to get any land. The land needs to be arable, even if that is only rainfall.
At most this means doling out about 121,000 square miles of land. People can do whatever they want with it, but sell it. Though I guess they could lose it for failure to pay taxes on it. But if they had their own land, they would at least be able to have a bit of the american dream.
Programs can be set up to get homes put on the land that are energy wise, and low impact, and able to be low cost, if people so choose. No one can further say they are homeless, because they have a piece of land and can live on it and at least have a rock to lay their head on.
Not prefect, but better than what most people I know have to deal with, given the cost of rents and other things in living expenses.
I think I'll add this to my Free Right Now presidental bid for 2012.
Just another dream that is not going to happen, but hey what are dreams for anyway.
Charles,
BioWebScape designs for a better fed and housed world, one person at a time.
Hugs from Arkansas.
I'd pick a north arkansas 1/4 arce lot, just cause it gets more snow in the winter. Build a small passive solar earth shelter on it, and start designing the systems to help others live better. Though I am currently using my parent's 1/6th an Arce city lot to do the same things.
Yes it is that bad.
We do not have their mass transportation.
This meme comes up regularly, and I know not what thin air it comes from, since international economic comparisons are often tricky. (With "happiness" comparisons being wild guesses conjured up from the quantum vacuum by professorial imaginations unanchored in any reality and simply running amok.) It absolutely does not in any way square with what I've heard over the years from American expats who have lived in Europe on an ordinary budget. And based on what I've seen myself as a visitor, it's at least problematical.
I've seen charming cityscapes to be sure, but as they say about New York, "nice place to visit but I wouldn't want to live there." Up close one often sees relentless gray. Cramped, overcrowded living conditions, tenements from some bygone era. Houses (in Delft, a small city) so tiny that when I showed pictures to friends, I had conversations like this - seriously:
"What are those?"
"Houses."
"Houses? You've got to be kidding."
"No."
Upstairs apartments and offices (in Paris) that were stuffy stifling ovens with the afternoon temperature a mere 22C outside (32C being a routine summer high across most of the USA, and 40C not unusual in some regions.) Awful "suburbs" with too many grim Brutalistic concrete pigeon coops. Very high prices in the stores, sometimes double those in the USA. Oh, and once when we were running very late, "food" (from a place along a Belgian motorway) so plastic it made Marc's Big Boy seem like gourment heaven (I rounded on my host a little about that one, mainly because it never would have occurred to me that such a thing could be possible.)
And from what I've heard but not experienced directly - and it partly explains the living conditions - income taxes so astronomical that "I felt like the government took everything I earned and gave me back an allowance [in a nominal amount such as would be given a child.]" (I don't know how widespread the custom of giving such allowances might be in Europe.)
So for myself, I'll take the "same living standard" assertion with a large grain of salt, since so much of that is in the eye of the beholder. But as for general readers newly arrived here owing to the oil spill, IMO most will take it with the whole salt shaker. No, actually not - they'll either fall over laughing or, worse, they'll shake their heads as they conclude that they've accidentally clicked through to some flaky UFO site.
Note a couple of things: In Northern and Western Europe
1. People live longer than they do in the U.S., and European infant mortality rates are much lower than those in the U.S.
2. Highly taxed people often don't mind so much about the tax rates because they get great benefits in return (cradle to grave medical care, better Social Security type benefits, lower cost of higher education, much higher quality of primary and secondary education than in U.S., abundant bike paths, and the list goes on. The Germans, Swedes, Finns, Icelanders, Danes, Brits, Dutch and French people that I know all seem to think their home countries have a better standard of living than do U.S. citizens.)
True, the crap we buy at Wal-Mart is cheaper than goods in most European stores--in large part because of the Value Added Tax that is common in Europe and Britain. Big whoop.
Europe is turning into the poster child for bankrupt states, they couldn't afford their welfare states and since they can't afford them they won't have them. If England is so great, why do so many English say their country is terrible and are running for the exits? Higher education in the U.S. is very inexpensive, I don't know where that meme that it is unaffordable comes from. The reason the Euros do better in school is merely a matter of demographics, how many foreign aliens reside in Finland and Norway?
Why do so many Americans retire overseas? True, they often retire to cheap Latin American countries, but some are relocating. Why? Because they think they will have a more secure future in Sweden or Ireland or even Spain than they will in the U.S. By no means is the migration flow one way.
If Swedish taxes are so bad, why don't more of them emigrate to the U.S. A hundred and fifty years ago more a million or so poor Swedes came to Minnesota, where almost all of them made good livings. Not a few are thinking about going back to the Old Country, and some of them are already doing it. Clearly, Sweden has a much more enlightened energy policy than does the U.S., and I expect death rates not to go up much in Sweden over the next fifty years as they will probably increase in the U.S. over the next half century. Other European countries also have much better energy policies than does the U.S., e.g., France (nuclear) or Germany (nuclear and windmills) or Denmark (windmills).
.
Swedish taxes are possibly not quite bad enough to induce emigration, which even nowadays is a rather severe step. And the US immigration authorities have become some of the hardest to deal with in the world, notwithstanding the nearly wide-open Mexican border.
In the reverse direction, nostalgia in old age for the Old Country is by no means new. Some countries make expat retirement easy because it captures money, similar to tourism; I don't know how many European countries still do that deliberately or accidentally. OTOH I don't suppose most people retiring back to the Old Country care a whit about wonkish stuff like energy policy...
Swedish taxes has been bad enough to induce emigration and they still are for some people, for instance has manny economists migrated to GB and London. But the taxes are going down and it is good for our economy and peoples freedom, we are still way to far along on the laffer curve. This is also an ideological point in the election campaigns, our left wants to reverse this proces and raise taxes.
Perhaps you have an excess of economists in Sweden, and that is why some emigrate to Britain for better job opportunities.
If only the U.S. could export one million of its lawyers to Europe, then we would destroy the viability of European economies for decades. I think in Sweden you probably do not have a great excess of attorneys. Count your blessings!
That we have an excess of economists is probably correct.
A larger flow of people are Swedes working for a short or a long while in Norway. Norway has high taxes and high living expenses and lots of petro income making for high or very high wages. The culture and language is simmilar enough for it to be a very easy move. Swedish workers has a reputation for working harders the Norwegians, much as Poles has in Sweden... Open borders make for new interesting patterns and I am sure it can lead to manny good things.
One of the forces breaking up one of the last bastions of nearly complete socialism in Sweden are doctors and nurses moving from low wages in public monpoly healt care in Sweden to high wages in public monopoly health care in Norway.
Sweden and Norway has a special relationship where many Swedes cheer for Norwegian sport teams in competitions where there are no Swedish finalists and manny Norwegians cheer for any team but Sweden. But I think this is dying out, large parts of it is a long backlash from a forced Swedish - Norwegian union dissolved in 1905 that to a large degree integrated foreign policy and trade The Norwegians had allways been the poor but proud neighbour traveling free on the high seas, they started to catch up with electrification and sailed way past us economically on north sea oil and gas. And to add to the problem I and others sometimes has a condensating attitude to them when they try to solve all the political problems in the world as we tried to do in the 1970:s when we though we had the worlds best socialism and did not notice that what we were pushig onto others were something different then what had made our fortune and freedom.
Somtimes I get a suspicion that promoting goose butching while livig on the stock of old golden eggs happens in other cultures and political systems then Sweden turning from strong market economy, low taxes and a limited socialist government to high taxes, all ecompassing socialist government and a period of stagnation. Here one of the turning points from constructive to destructive where the replacement of aging social democratic leders who actually had worked in ordinary companies with people who had grown up with the ideology and applied pure theories togeather with modern PR and often skilled leadership. Wonder if other governments and kinds of institutions have the same problem? It probably is so.
Hmm, rambling moode today. ;-)
People moving to a country with high expenses. Ron Paul is staring in open-mouthed astonishment right about now.
I have several American friends who thought about moving to Canada for ideological reasons but noticed the difference in taxes and pay rates: we pay a greater percentage of what, for the same work, is usually a lower pay cheque.
However, the benefits are things like a rational housing market (so far), sound banks, and a culture which, while under siege, is still thriftier (the percentage of Canadians who drive small cars is greater than in the US.) We pay less for smaller cars and houses, and have fewer toys. I don't worry about losing my health care, and a smaller proportion of my income keeps me healthier than a comparable American. I live in a walkable and cycleable city.
I can't speak for the Swedes, but I know that myself and a lot of other Canadians look south and see stark raving insanity. American political culture is totally divorced from reality.
We (Canadians) pay higher taxes than the US (though lower than Europeans.) We have seen a decline in various services and infrastructure over the past 20 years, in Ontario mainly due to tax cuts from the previous Conservative government.
Why would we want to go somewhere that has even deeper infrastructure problems, and regional tax and governance systems (think California) that are from fantasy land?
It might not be that "Swedish taxes are possibly not quite bad enough to induce emigration".
It might be that they see an energy system that is unsustainable, a health system that would put their lives and livelihoods at risk, government programs that are under-capitalized, and massive social inequity.
The US looks good to the privileged from the inside. The rest of the world can see that the Emperor is going to have a nasty sunburn on his private parts.
Lloyd
Tax is the price one pays to be a member of a civilized society.
OTOH, as a couple of our European regulars have already pointed out, that doesn't mean that taxing without limit buys more civilization without limit.
Warning:
Taxation, like strong drink, is a pleasant thing -- but only in moderation. Otherwise, it becomes poison that can lead to a nasty hangover and if brought to the extreme, can cause death.
Show me a place with no tax and I'll show you anarchy. Show me a place with all tax and I'll show you slavery. A happy medium is much to be desired.
Btw, the Swedish policies are changing slightly now during the run up to the elections.
A few days ago our parlament voted yes for allowing replacing the current 10 nuclear reactors at the three current sites with new ones. This is an acceleration of the pro nuclear trend. Unfortunately has the left and "greens" promised to reverse that decision and it makes for an interesting electin since at least half of the social democrates, the old shrinking power-party and the industrial unions realy want renewed nuclear power.
Today were the ruling right wing and center alliance environmental and climate report with election promises made public. The peak oil relevant bullet points are in short:
40% CO2 reductions to 2020 compared with 1990. (Does not include all sectors but these kinds of goals tend to become influential. )
No fossil fuels used for heating in 2020.
A fossil fuel independent wehicle fleet in 2030.
The visionary goals that influence reserach etc is:
zero net CO2 release in 2050
Fulfilling these goals are almost BAU if the public and private investments continue to increase as they have done for more then a decade. The main difference is that it need a fair ammount of biomass gasifiers and a break thru for EV:s would make it a lot easier. The research for this is already subsidized but the investments need to be a market resonse. The latest fad is b.t.w. speculations about trolley trucks as a complement to our mostly electrified railways and a way to make good use of the highway infrastructure. I think that could work out well.
Export of CO2 free electricity from nuclear and renewable sources will be a national goal. The HVAC grid will be strenghtened to make this possible.
Even more investments in railways.
More investmentsin biking, especially regional bicycle lanes (about 10 to 40 km)
interconnecting the already bicyle friendly towns.
More research in renewable and nuclear power and education of people to build and maintain systems.
More energy efficiency work in all sectors.
Implementation of per hour billing of electricity and research into smart grids. (Smart grids are from my p.o.w. a market reaction to houerly prices and billing or an even more fine grained market. )
The foreign policy focuses on EU and removing (ethanol) tariffs, increasing trade, advocating CO2 taxes and tradable allowances and coordinating the green certificate incentive system for renewable power with our neighbours.
Then there are lots of environmental suggestions such as trying to set a value on the free ecosystem services to make them relevant for our market economy.
BAU will continue with CO2 taxes and energy taxes, we make a point of keeping the incentives and rules stable.
Our main stimulus policy has been to lower taxes on work, especially poor people and middle class and some energy taxes has been increased. The lowering of taxes on work will continue and this also strenghten the middle class and makes people less likely to vote on the social democrates or the former communists. This works realy well as a tax base shift that allow establishing more services and I personally expect more light industry. And the government budget and most munucipiality budgets are now close to ballanced due to the large surpluses and growth before the financial crisis and a focus on getting stuff done instead of stuffing faild institutions with money.
Our policies still focuses on climate change but peak oil is common knowledge and most of the practical stuff is identical.
Here is the PDF in Swedish:
http://www.alliansen.se/wp-content/uploads/2010/06/Milj%C3%B6rapport.pdf
I am quite proud of it and expect our greens to go way over top in suggesting impossible goals.
I expect Sweden to be a net exporter of energy and energy intensive goods during the post peak oil era and a good place to site complex manufacturing and that is a very good position.
Yes, a very good position. If only other parts of the world had such a BAU dynamic at work.
Magnus, you mentioned that a key debate in the current election campaign is over nuclear renewal. Am I reading you right?: if the left and the "greens" have their way, the retrofitting or replacement of aging nuclear plants may be in jeopardy. Curious as to what they are they proposing to use instead to generate electricity. What are the renewable options available?
Best wishes for zero net CO2 release in 2050!
Maintainance of the current nuclear powerplants is not in jeaopardy but they are soon fully uprated and it does not make sense to use them for more then 50-60 years. What is treathened is planning and license approval for new builds to replace old powerplants. The energy industry also likes that our policy makes it ok to replace an old 800 MW rector with a new one of any size.
Our "greens" suggest the same alternatives as we do, biomass CHP, wind power, a litte bit of additional hydro power, some photovoltaic, a hope for wave power and lots of savings. The minor difference is that we are more positive to investments in our neighbour Norway where the sea currents are much stronger, the waves bigger, the wind stronger and the hydro protential larger. The major difference is that we want to replace coal powerplants in our neigbouring countries thru electricity export and free market competition and the "greens" want to make all these investments and then throw the environmental and economical benefit away by closing nuclear powerplants.
So the Greens are self-contradictory. No surprise. Politics is the art of the possible and the Greens are appealing to every faction possible to gain influence.
Smaller scale alternatives can handle some of the load, but biomass, CHP, wind power, photovoltaic, etc., are not the universal panacea they are alleged to be, particularly when dealing with economies of scale.
Very pleased to hear of the cooperation between Sweden and Norway. Yes, if you can tap into the renewable energy sources next door, you will be well on the road to reaching your goals.
Best wishes for navigating the politics of energy. At least the Swedish public seems to be taking the subject seriously. Promising to watch.
Thank you Magnus for a glimpse of what progress in the face of Peak Oil will look like.
I get tired of all the doom and gloom we read as I feel it does not fully apply to the Cascadia region (Oregon, Washington, British Columbia) where I live. Yes, there will be some areas of the globe that experience horrific deprivation. Even today I wouldn't want to trade places with anyone in the Congo or Chad or rural Yemen. But there will also be many areas that successfully navigate the challenges ahead. The future is not all-or-nothing and the effects in each region will vary depending upon available resources, local attitudes, etc. Global trade will continue and minerals and materials will continue to be mined although they may command a much higher price.
Many families in my community (urban Seattle) have already made initial steps toward the smaller footprint, less consumer oriented, community focused living that will be required. We think we actually lead much happier lives because of it.
It looks like Sweden (along with Denmark and Norway) is moving in the right direction in large part because Swedes are being honest about the situation and the prognoses. To me, that honesty is the first important step that Americans (and Brits) have failed to take. That's why Obama's speech was so disappointing.
Jon
I absolutely agree that we are lucky to have such good neighbours and I would like to add Finland to the list, they are even more practical then us Swedes.
One part of my own list of good stuff to do ASAP if things realy go bad is to increase the cooperation with our neighbours to free up man hours and other resources for investments.
Of course, I have outlined my own "plan" to reduce our reliance on foreign oil--we continue to be effectively outbid by developing countries for access to global net oil exports. And in fact I think that we are well on our way to becoming "free" of our reliance on foreign oil--just not in the way that most people expected.
US net oil imports fell at 4.3%/year from 2005 to 2008 (from 12.5 mbpd to 11.0 mbpd), while Chindia's net oil imports rose at 9%/year from 2005 to 2008 (from 4.6 mbpd to 6.0 mbpd). If we extrapolate these two trends, at these rates Chindia's net oil imports would exceed US net oil imports some time around 2013.
It's also helpful to express Chindia's net oil imports as a percentage of (2005) top five net oil exports. Chindia went from importing the equivalent of 19% of the combined net oil exports from Saudi Arabia, Russia, Norway, Iran and the UAE in 2005 to importing 27% of their combined net oil exports in 2008. If we extrapolate this trend, Chindia would be net importing the equivalent of 100% of the combined net oil exports from Saudi Arabia Russia, Norway, Iran and the UAE some time around 2019.
I wonder how much of the BP carcass will wind up under the control of Sinopec or CNOOC or PetroChina. I seem to recall BP's reserves are priced @ $7 a barrel.
Gates could buy BP if he was smart enough to think of it.
"Microsoft Gas"!
Of course, nothing will break the auto- grip on the US imagination until it is too late to do anything but watch the entire enterprise grind to a halt. (I wonder how this will effect the BRIC nations?)
The reason the 8 presidents did nothing and will do nothing is the cost. Cutting energy use could start with a $5 a gallon gas tax (with another $5 in a year). Use your imagination and you can already hear the howls of pain from the public at large.
Cheap gas is an entitlement along with all the rest of the (non- productive) oil- energy platform; the malls, subdivisions, sprawl and highways to everywhere. Don't forget the hundreds of millions of cars and trucks.
WT's 'plan' is going to do the job one way or the other - or rather, physical depletion will do it. The jobs will continue to vanish, unemployment will rise, currency, borrowing and interest rate tricks will be deployed to little effect - the rise of the developing countries' consumption will simply hasten the overall economic freeze. The idea of 'prosperity' is the American style of it, rather than the Bali style.
Now, the US is too late to effect the outcome for the rest of the world. The auto industry is world- wide. Cutting transport fuel use in half in the US will not effect China's consumption increase. (It would give America a competitive advantage in our new oil- constrained world.)
At the same time, the BRICs can outbid for a little while but their wage advantage is only useful in the export context; they export cheap(er) fuel in the form of 'finished goods' to more developed countries. As these latter slip further into recession the wage advantage disappears and the ability to gain funds (current account surpluses) also vanishes. The mercantile BRICs will then be faced with either consuming more and more of their own reserves or will follow the developed world into recession.
This leaves out the effects of dollar- preference and dollar- exported deflation.
This is what its like being in a situation where events drive policy, not fun, is it?
Do you have any data on net imports of oil into the U.S. for 2009 and estimates for the first half of 2010?
http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTNTUS2&f=M
Using this link, and posting on a spreadsheet you can average each year and then do a percentage change for each year.
U.S. Net Imports of Crude Oil and Petroleum Products(Thousand Barrels per Day)
Note. If you bring the page up in IE then you can do a direct copy and paste into Excel. Won't work if you bring the page up in Firefox however.
Ron P.
Thank you.
Four week running average data for Net US Oil imports:
http://www.eia.doe.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=wttntus2&f=4
If we extrapolate the 4.3%/year decline rate, the data would look like this (versus 12.5 mbpd in 2005):
2009: 10.5 mbpd
2010: 10.1
2011: 9.7
2012: 9.3
Thank you. But why extrapolate a 4.3% decline rate in imports if
1. The Saudis have even have the excess capacity they claim or
2. Skrebowski is right about 2014 being the most probable year for Peak Oil?
I have yet to see anybody critique Skrebowski's latest numbers--that were referred to in a comment about a week or so ago on TOD. I'd love to see an article on TOD on Skrebowski's latest estimates of increasing oil production for a few more years.
I'll let you know in 2020 who was right, but IMO 2005 was the final global net export peak.
By the end of 2013, Sam Foucher's most optimistic projection is that the (2005) top five net oil exporters will have already shipped half of their post-2005 Cumulative Net Oil Exports (CNOE).
But here is a little bit of math that I did earlier, for illustration purposes.
For the sake of argument, let's express Chindia's net oil imports as a percentage of (2005) top five net oil exports. As noted above, using various metrics and if we extrapolate current trends, Chindia's net imports would be equivalent to 100% of (2005) top five net oil exports around the 2019 time frame.
In 2005, non-Chindia importers bought the equivalent of 81% of top five net oil exports (about 7.6 Gb allocated to non-Chindia importers). If we assume zero for everyone but China and India in 2019, then the post-2005 (top five) CNOE available to non-Chindia importers would be about 53 Gb. Of that 53 Gb, probably about 30 Gb will have already been shipped by the end of 2010, leaving about 23 Gb of remaining CNOE from Saudi Arabia, Russia, Norway, Iran and the UAE available to non-Chindia importers. Non-Chindia importers are depleting this remaining 23 Gb of available (2005 top five) CNOE at the rate of about 25%/year, or about 2%/year month.
I do not believe that you are wrong, but I still hope that you are. We'll know a lot more in a couple of years than we do now. Clearly, the long 2005-2010 slightly undulating plateau cannot last. Either we'll produce more oil, in which case Stuart Staniford and Skrebowski will be proven right, or global oil production will decline, as you think is now the case.
I fully understand ELM2 and realize that even if world oil production remains on the plateau, U.S. oil imports will fall. But I tend to think that domestic production will fall at a higher rate than will global oil production.
Thanks for your attention to my queries.
Don, you wrote
Why? Can you elaborate?
Thanks
PS Glad to see you posting again.
As a general rule, production of no commodity stays on a steady plateau for more than five years. I consider 2005-2010 plateauing of oil production to be an extraordinary phenomenon.
The US Lower 48 and the North Sea had initially slow declines for about three years following their respective production peaks, followed by more rapid declines. Based on the logistic model, global conventional crude oil production in 2005 was at about the same stage of depletion at which the Lower 48 and the North Sea peaked. IMO, what is propping up global crude oil production right now is unconventional production.
To finish your thought: Increases in unconventional production cannot for very long offset decreases in conventional oil production, if I understand the implications of what you have written.
I think you're correct about that. This is not the prettiest graph, but it shows what makes up the plateau of the last five years:
Total liquids production (green) has been more or less flat since 2005, with perhaps a slight trends upwards. Crude oil production (red) is clearly trending down, although both fluctuate noticeably with the volatility in prices (gray). The gap between the two is, as far as I can tell, "unconventional oil."
If that's the case, subtracting crude oil production from total liquids gives reasonable numbers for unconventional oil along the same time period, plotted here against the same price backdrop:
The gap between crude oil and all liquids is explained here:
13/4/2010
Natural gas liquids and other liquids mitigate crude oil peak
http://www.crudeoilpeak.com/?p=1352
Thanks for the link, Matt. I don't suppose you can point me to production numbers for unconventional oil? I have not found them on the EIA website. Perhaps I just haven't looked enough.
Any idea where, say, Alberta tar sands fall in this? I seem to recall some controversy maybe last year that they were being included in the crude oil numbers when they are not really crude oil and very much "unconventional."
Bob, your commentary was excellent, but you know as well as I do that an energy rationing plan would never happen. It couldn't. Many people must drive to get to work, sometimes as far as 70 miles, one way. We have little reliable mass transportation in this nation anymore than can substitute the use of a private automobile and, with our economy now a shambles, there is no way that a national mass transit project could ever succeed. For the mass transit systems that do exist, most employers will not alter their work hours to conform with mass transit schedules, nor will mass transit systems alter pickup and dropoff times to conform to employer needs. This lack of compromise has made mass transit a lose-lose situation.
In my personal opinion, as I just mentioned, most working people in our society whose job is located outside of walking distanct cannot cut back, while many others will continue to refuse to do so. The action of the latter group has a very debilitating effect on those of us who are willing to reduce our petroleum usage. For example, every single item in my house is energy efficient, including my refrigerator, lightbulbs, and all of my electronic items. I use a car, but I only drive about 1000 miles year, because I live in an area where most of my mandatory consumables are relatively close. I never use it for recreational purposes.
However, over the years, as I have saved energy in every form, I have watched as my neighbors have grossly increased their usage as if energy was an unlimited commodity. You can't say anything to them about energy conservation without them becoming confrontational, as they refuse to listen to reason. Last year, for example, one of my neighbors was taking a trip. Instead of using a fuel efficient car, he used a two ton, extended cab Dodge with a V10 engine for a 1000 mile trip. He was taking no cargo! I simply made the comment that it must be costing him a mint to drive it. His reply was that it was nothing to him, with the inuendo that I should mind my own business. You see, he holds one of the few jobs in my area that pay a decent wage. He works for a nationally known gun manufacturer, and it is the last major manufacturer now existing in my area. All the rest of them closed up long ago. To this person, his extended income seems to infer that he has the 'right' to use whatever energy whenever he wants, regardless of the consequences to all of us in the long run.
The actions of people like this nullify any reduction I may have created by my lifestyle, and the situation gives one pause to wonder why we deny ourselves the benefit of an easier life when we don't have to, while so many others take advantage of the situation only for their own best interest. At times, I have really entertained the idea that, perhaps, the rich have orchestrated this entire energy conservation situation to get the working people to cut back, so the well-to-do have more energy to waste in their playful pursuits. Be this as it may, I have no desire to change my habits over this possibility, whether it is true, or not. Call it 'preventive survival maintenance' if you will.
The fact is, there is only one way the aggragate of the people of the United States are going to reduce their collective petroleum usage. That is by force; not force by physical means, as through the end of a rifle, but by the force of economics. Only when energy becomes probitively expensive, even to the rich, will we see any form of real energy conservation. Unfortunately, those caught up on the bottom rung of our society are going to feel the sting of this reality the hardest. This is particularly true in my area, where the average income is now so low that it just barely meets the level needed to support a family, much less spending $4.00 on an energy saving lightbulb, verses the $.20 cost of an incandescent bulb.
I'm one of the lucky ones, as I have been able to maintain a low income, but I used what little extra income I had to invest in 'green' energy saving appliances. The overall monthly cost savings to me more than covered the initial costs, but I was able to do it. Most people can't, and that does not only include the low income workers in my area, but throughout this nation. There are far more of them that the MSN wants the listening public to know.
I keep hearing in economic blogs and financial programs that the average income of American workers is about $35,000 to $40,000 a year, and I say, point blank, that is nothing but media BS. In my area alone, there are at least 100 people earning miniumum wage, or slightly above, for every person that earns the MSN average, and I know the same thing is true in nearly every major city in this nation. A minimum wage job in New York nets the worker a little over $15,000 a year, and that is only because New York has its own minimum wage law that superceeds the Federal regulation. Much of this income is negated, however, due to the fact that employers have used cutbacks in hours to reduce employee payroll expenses, so I would imagine the worker's annual income figure would be considerably less.
When economics forces energy conservation, the outcome is not going to be pretty. While the affluent may think they are immune, they will face some very grueling moments at the hands of those who are watching their families being destroyed by a society that can't even get them back and forth to work. Putting people in a situation where they must choose between keeping a roof over their families heads or food in their mouths, verses filling up a car's gas tank to get to a job that pays so little it cannot cover their basic needs will not lend itself to a peaceful outcome, as I am quite confident you will agree. This is particularly true now that State Governments, like California and New York, are cutting programs for those caught up in poverty conditions.
You are looking at mass panic in the streets, and I see it coming in the not to distant future. Like many other people who believe in Peak Oil, I see a day when gasoline will be priced at $7.00 a gallon, or more; a level that will put gasoline far above the ability of many low income earners to afford. Additionally, heating a home in winter in my area, Upstate New York, will drain what little resources people have. Believe it, or not, there is a good side to this madness though.
My concerns on this issue are not new. They started way back in the early 1970's. Since that time, I have been able to discover a number of things that can work to my advantage, and I plan to use them to the fullest when the economy of my area falls apart. For example, I can show the people of my local area how to generate all of the electricity they will ever need, for non-heating purposes, without burning a single tree, using trash incinerators, using hydro-electric, wind or solar systems, or using one drop of petroleum. It uses a recovery method that will provided an unlimited, renewable energy source for as long as mankind exists, and it requires no exotic fuels. Additionally, when gasoline and diesel fuel are gone, I can show them how to use a tractor to plow a field so they can grow their own food using a couple of simple tools and few pieces of scrap materials.
The politicians in our local offices of public trust wouldn't listen to me when everything was hunky-dory, but when the worse case scenario hits, I have little doubt they will be knocking on my door, wondering why I am not suffering any of the energy related situations they, and their constituency are facing, as my house will be fully lit up, stereos will be playing, a big screen TV will be projecting a recorded motion picture on its screen, and I will be driving to fields to retrieve food. However, if they want it, it will come only at a price. I'm sick of their BS.
Knowledge is power, and that fact will become more than evident shortly.
"For example, I can show the people of my local area how to generate all of the electricity they will ever need, for non-heating purposes, without burning a single tree, using trash incinerators, using hydro-electric, wind or solar systems, or using one drop of petroleum. It uses a recovery method that will provided an unlimited, renewable energy source for as long as mankind exists, and it requires no exotic fuels. Additionally, when gasoline and diesel fuel are gone, I can show them how to use a tractor to plow a field so they can grow their own food using a couple of simple tools and few pieces of scrap materials."
portals, could you let us in on your secret? Are you using sewage or something?
Nice idea, flaunting energy use in a collapsed state.
Some dirtbike gang will shoot you.
I don't generally respond to replies, but this one was just too compelling. For some reason, people like you think that this world is made up of nice guys, but it's not. A person from Russia, Germany, China, England, America, or any other nation of this world create a set of priorities based on how their own country has treated them over the years.
In my case, I'm a Vietnam Veteran. I was spit on by my community when I came back home from a grueling year, watching my friends being killed and maimed during the 1968 TET offensive. A few years later, I had my entire career destroyed by the people of my own country because they thought that buying cheap foreign made goods was more important than the livelihood of their fellow Americans. I have had our judicial system deny me equal protection of the law because it wanted to hide it's own BS from the people of a community who didn't even care what kind of scumbags they elected into public office. So, as far as I am concerned, I own this nation nothing and when it falls apart, any loyaly and/or oath that I have maintained towards it is gone. In essence, I become a free agent.
You call my act flaunting? Well, you are right! I am flaunting it, and I don't care who responds. If it's my community, so be it. They will be much better off then they would have been otherwise. On the other hand, if it's a biker group, do you really think I care?
Most biker's, with the exception of a few, have the mentality of a flea, and obtaining a technology they don't understand will do them no good whatsoever unless they have the expertise to use it. I have that, and much, much more. For example, I have the capability of producing portable CW lasers that, by using a special configuration, can cut a man's head right off his shoulder's at 200' or more when properly aligned, silently, and invisibly. He won't even know it happened until he catches his own head in his hands. Just this, alone, will really put a feather in a biker groups hat wouldn't it? Just who do you think they will want to lead them, some dumb bozo who thinks his bad tatoos and loud mouth are successful survival attributes, or a tried and hardened combat veteran who, by the way, is now a high energy physicist?
The way I see it, if the people of this nation don't get their act together very quickly, they are going to have to make some very difficult decisions. Do they want somebody who has a sense of loyalty to the United States Constitution lead them, or a band of thugs who care about as much for them as they do about the ants caught under their biker boots? Either way, it makes no difference to me. It's their choice. I've already made mine. When the United States is gone, I will become a social prostitute, so to speak, and I'm available to the highest bidder.
This is, indeed, going to be some very interesting times. Perhaps, now is a good time for the people of this nation to reflect on the way they have treated their so-called fellow citizens while they still have the chance to do so. Otherwise, they will have nobody to bitch too after the fact about injustice except themselves, and don't think for one minute that I am an isolated instance of what you might call immorality or unethical actions. There are thousands of people in this nation who have grown to hate some of their own people for the way they have been treated over the years.
The people of this country may have been able to separate some of us from opportunity and prosperity for ourselves and our families, but you haven't been able to put a lid on education, particularly to those of us who have had the capacity to learn on our own. Therefore, be forewarned.
The only thing I could do is probably throw a brick and use a sharp stick against the gangsters. Tough times ahead.
That head-cutting laser would be handy to help me put some Wallaby's in the pot. ;)
I have the feeling that those favoring higher taxes over rationing are people who can easily afford the tax but want the guy who can't afford the tax to cut back. I prefer rationing with the option of selling part or all of your ration to others. I prefer rationing over higher CAFE standards because the reduction would be immediate. CAFE takes several years to take effect and most of the savings in per car use is offset by an increase in the number of cars on the road. The problem isn't per capita use but total use and rationing would cut use immediately.
The problem with energy independence is it looks like a drain America first plan. Why not give the exporters dollars which will lose value while conserving domestic resources which will increase in value? Why not redefine energy independence to include our NAFTA partners and maybe the Caribbean basin. Such a cutback would be much less than a total cutoff of imports?
"I prefer rationing with the option of selling part or all of your ration to others."
How is that any different than a tax with per capita refund? They are exactly the same thing, the only difference being whether you give the money equally and then adjust the gas purchases, or give the gas equally and then adjust the money. You end up with the same people getting the same amounts of gas and money in the end.
The difference is that a ration card that can be sold is both a carrot and a stick. You only get so much, so there is an immediate incentive to stay within the limit. If you can't and have to purchase more, there is a long-term incentive to institute a change- say a smaller car or shorter commute. The carrot is that if you use less gas, you have a surplus to sell. In an open market where the price of a ration allowance floated, the incentive to avoid frivolous use of fuel to have surplus to sell would benefit those who chose to conserve. Those who chose to use more would see exponential cost increases the more fuel they consumed (with the usual caveats about farmers and essential uses.)
Thus, you have immediate feedback, rather than waiting for your tax return.
Lloyd
I may not understand the gas tax system you are discussing, but on the chance I do, I don't see how a per capita refund basis is the same as rationing w/sales.
Under Buy/refund:
A buys $0 gas, B buys $2, and C buys $1;
At refund time, A,B,C each get $1, therefore;
A = +$1, B=-$1, C=$0
Under rationing w/sales:
A,B,C each get $1 gas card;
A uses $0 and sells his to B for $1.35;
C uses his ration;
A = +$1.25 less $0.1 overhead, B=-$1.35, C=0
Seems like the ration w/sales would create a market. The tax refund method buries the transaction cost in more IRS overhead.
Am I missing something?
I don't know how you came up with your overhead or market price, but I don't see why that would be different either way.
Under Buy/refund:
A buys $0 gas, B buys $2, and C buys $1;
At refund time, A,B,C each get $1, therefore;
A = +$1, B=-$1, C=$0
Under rationing w/sales:
A,B,C each get $1 gas card;
A uses $0 and sells his to B for $1.00;
C uses his ration;
A = +$1, B=-$1, C=0
The chosen overhead and markup price are illustrative. I got it from the reality that most people are unable to buy a loaf of bread at cost. As Consumer, you probably already know that.
If the publics gas conservation got ahead of the policy goal, the price of a ration exchange could become negative, sending a signal to distribute fewer rations, in order to urge further conservation. So your example is a valid market condition.
I strongly believe that within ten or at most twelve years the U.S. will impose both rationing and price controls on gasoline, and probably on diesel as well. IMHO, there will be overwhelming political pressure to allocate gasoline "fairly" and to do everything under the sun to keep its price down as long as possible to keep BAU going. Price controls and rationing logically go together.
Price controls can have undesirable side effects.
http://www.washingtontimes.com/news/2006/may/15/20060515-122820-6110r/
Price controls always have undesirable side effects. All economists know about these. The point is that during emergency conditions, such as World War II, price controls plus strictly enforced rationing is less bad than the alternatives. Hence I expect the lesser evil of gasoline price controls plus rationing within a dozen years. I would be delighted to see the national speed limit of 35 m.p.h. reintroduced--but I doubt that there will be political support for that much before 2024. These are all SWAGS, based on data and models that I've studied on TOD during the past four years.
I have posted previously about WWII rationing. I do not expect a repeat. The bureaucrats managing the massive program for a US population of 400,000,000 or more would have an impossible task as they would have no way to way to know how much gasoline, diesel, propane, coal or wood would be available in following years. Nor would they know to what extent they could continue to trade fiat for foreign goods.
--------------------------------------------------
robert wilson on May 6, 2010 - 7:33am Permalink | Subthread | Parent | Parent subthread | Comments top
I was a child in Texas during WWII. It is said that the gasoline rationing was primarily designed to save rubber. My father had a B card for our single car but we drove very little and never over 35 mph. 1941 was the last year of full automobile production. I traveled around Amarillo mostly on a light weight "Victory" bike or on foot. Occasionally on a bus. Though some food was rationed I don't recall going hungry. For me personally the single greatest impact of rationing and shortages involved basketball shoes. I don't recall the populace being particularly unhappy. There was extreme solidarity. Amarillo had a busy air base and a bomb factory. Pantex, the bomb factory is now dismantling atomic weapons.
The main negative effect of price controls is that it provides disincentives to increase supply. Since we have virtually lost the ability to increase supply regardless of price, this negative effect is inoperative given peak oil. Supply will decrease regardless and we need to decrease consumption of fossil fuels anyway.
As far as that goes, cap and trade is a kind of rationing system in the sense that we are rationing the amount of carbon emitting fuels available for consumption. Since we are rationing, anyway, we should at least try to make the ration somewhat equitable. Using a market based rationing system at the consumer level will at least allow the frugal consumer to benefit twice, once because of less consumption, and twice because the consumer can sell credits at the price based on marginal demand. I don't know what this premium will be but it could be quite substantial and would benefit the low income person who consumes little.
The difficulty will come about for the poor consumer whose circumstances require consumption beyond his/her allocated ration. For example, what does one do with the poor person who lives 50 miles from work if one is doing rationing as opposed to tax and rebate.
Objections will be made to both rationing and taxing because of its impact on those with lower incomes or in circumstances where they require large quantities of fuel. There will be negative impacts but the impacts of just relying on the market will be worse.
There is no one size fits all policy but consideration should be given to providing incentives for people to live closer to work. In addition, there are a lot of people who choose to live far from work so that they can live in a larger house. And I am not talking about trading off a so called cramped flat in the city vs an adequate house in the suburbs. I am talking about people who live in the outer suburbs so they can have a very large house versus living in an inner suburb so they can have an adequate house. During my working career, I always lived 5 miles or closer to work as a lifestyle choice and I lived in nice houses and town houses. Most of my colleagues, literally chose horrendous commutes so they could in very large houses. My boss said he loved living 30 miles from work so that he could "think" on the way to work. I told him I would rather spend the extra time "thinking" in my bed in the morning.
For the poor, it is going to suck but it sucks now. Treating the problems of the poor shouldn't be the responsibility of an energy policy but should be within the purview of an incomes or a welfare policy. The rich will find a way to get the energy they need, even in gross excess of what the average person consumes. But this is not a society that does not believe in equality of outcomes. As soon as we have a consensus that outcomes should be equalized, we can figure out how to do that. But an energy policy should not bear this burden.
Hi Don,
In a rational world where the populace was math literate, we would immediately implement a 35 or 40 mph max national speed limit law controlled by mandatory governors in every vehicle that used public roads.
The impact of this law would pave the way for much lighter vehicles (much lower safety standards), Neighborhood Electric Vehicles (glorified golf carts), scooters, and bicycles. Faster mass transit on rails and non-public roads would soon be appreciated. We could greatly mitigate the worst consequences of PO with this one simple law that would be inconvenient but not impossible for the vast majority of commuters.
However, we both know this will not happen in any useful time frame. If I can find the time, I'll offer my opinion on the root causes for this inability to act in a rational manner.
And so for the 100th time we go round and round ending up in the only consensus that seems to ever be reached; that even with the knowledge that we must act we are hamstrung to do so. And so we carry on allowing the joker to play the fiddle.
That pretty much sums it up. We could make this much less painful than it would otherwise be, but we won't.
The psychology of making painful choices with regards to energy usage reminds me of how a lot of people react to end-of-life situations. People don't want to pull the plug on grandpa, who has a terminal condition, because they think some sort of miracle may yet happen. It's a combination of denial and wishful thinking. They will surely think of something!
Well, they're known as "Painful Choices", probably because you make them when the pain is right on top of you. Not at some safe distance.
Did you ever utter the silly line.. "Why do I always find it in the last place I look?"
Some things maybe can't really finish up until they're done. What happens right after a drought?
I argue that energy policy has impacted national policy way before Nixon. Remember that whole Second World War deal.
And cutting our imports that fast and furious and PUBLICLY would probably mean WW3. The State Department would sure be busy manning the phones after that speech!! "Secretary, the Saudis on are on line 1 and 2 and 3 and 4 and..."
What a perfect-storm Al Queda training tool it would be for us to kill off the economies of the oil-producing Middle East just as they're having a demographic boom in under-25 populations...newly jobless under-25s, in the 10s of millions. Picture that.
Perhaps, but at this rate the Chinese are already going to have to make that call.
The problem is the usual mismatch between the horizon of analysis and the horizon of action:
PO was something presidents were likely aware of 30 years ago, but they also knew that it wasn’t inside of their term. Therefore talk suffices, and a president mentions it even if it were just for CYA purposes ("I did give a speech about it...").
Rinse, repeat.
By leaving the time element out of predictions one greatly reduces the urgency and believability of one’s message. My guess is that is why PO is by some many viewed as on the fringe.
“Yeah, theoretically we’ll run out of (cheap) oil at some point but I just want to go on vacation/ get a new car / better job etc. And THEY will come up with something. They always do. So who is won the soccer match today?”
Rgds
WeekendPeak
I find it interesting that many people, such as Gail, cannot help but point out how difficult it will be to reduce our consumption of fossil based fuels. Yet, it will surely happen. I'd like to see an analysis or projection of what a reduction in fossil based fuel would look like, given no scalable alternatives in the forseeable future.
For example, given our current domestic production, how would we slice that pie, given no scalable alternatives in the forseeable future. Leaving out all the reasons it won't "fly" in the current enviroments (social, financial, political, etc.) what would be the division between the pieces of pie - military, social aid, infrastructure, food production, transportation, education, etc.? Yes there will be dramatic life style changes (to say the least!), but come on, it is going to happen. And by 'it' I mean a future with nearly 7 billion people adjusting to less and less fossil based fuel AND no scalable alternatives in the forseeable future.
I say it's time to forget dreaming of the desired future as something more or some better more than of today. I think Robert's message should be broadcast continually... with Ron's (Darwinian) realistic view of the future right next to it. I believe these two gentlemen along with the likes of Gail (with her pulse on the structural interdependencies and the looming walls up ahead) have written or said all that needs to be. We are engaged in navel-gazing. Each day that passes, WTs export land model continues to unfold. But, let's not let facts get in the way of the future.
Our continued, intentional looking the other way seems to suggest that we will indeed be reduce to cats fighting in a bag. Oh the joy of that scene.
Time to fertilize the garden with my urine.
I recommend THE LONG DESCENT as possibly the single best of all available books on Peak Oil and our probable future.
I think R^2 has forgotten the Pickens Plan and existing hybrid technology.
60% of 17.8 mbpd goes for fuel for cars and light trucks or 10.6 mbpd.
Small hybrid cars get roughly twice the fuel economy of conventional vehicles, so if hybrids were mandated
you could cut that to 5.3 mbpd. A cars for clunkers program could phase out our inefficient fleet and reduce the number of superfluous second cars.
Further if you converted the hybrid vehicles to natural gas internal combustion engines, you would reduce oil consumption to 7.2 mbpd which would be covered by domestic consumption plus Alberta tar sands production/or Colorado oilshale production(1.9 mbpd 2030?) if Canada decided to nullify NAFTA.
Natural gas production would have to go up by 50%, 11 Tcf for NG vehicles. Given the apparent glut of unconventional gas and the convenient Phill technology this is a possible way to oil independence.
At the risk of seeing R^2's blood pressure explode, I would also point out the NREL billion ton biomass study, that estimates that large scale cellulosic ethanol could replace 1.9 Gboe of oil or 5.3 mbpd.
Both these methods would significantly reduce out CO2 emissions as well.
So energy independence is definitely an option but
one unlikely to enrich Big Oil, which runs the USA---ask Joe Barton!
Of course the National Renewable Energy Laboratory would spout such nonsense, their very existence depends on projecting renewables to play a dominate place in our future. However renewables are really a joke. From a previous Oil Drum Thread:
The chart below shows that global primary energy production is running at about 11,000 million tonnes oil equivalent (MMTOE) per year and that the 50 MMTOE provided by renewables is barely significant - it is the skinny red line marked by the big red arrow.
World primary energy production 1970 - 2009. In 2009, fossil fuels (oil, natural gas and coal) accounted for 87.5% of the energy we used. Wind, solar and geothermal combined accounted for 0.4%.
Ron P.
Ron,
Of course the National Renewable Energy Laboratory would spout such nonsense, their very existence depends on projecting renewables to play a dominate place in our future. However renewables are really a joke.
Renewables( including hydro) already make a significant contribution to electricty production and together with nuclear could already replace ALL of the oil used in land based transportation. We dont have to replace the BTU's present in todays FF use, just the work performed by low efficiency ICE powered cars and trucks. US domestic oil production is more than enough to supply air and sea transportation, and chemical synthesis. In time biofuels could even replace the oil used for these activities that can not be powered by electricity.
Yes, that is what I have been hearing for years and years and years. Eight presidents have been thrashing this straw for over forty years. And just look at how much these biofuels, or renewables, have grown. That tiny red sliver of a line in the chart above is hardly visible. Yet hope springs eternal. In time... in time... in time...
Ron P.
I think R^2 has forgotten the Pickens Plan and existing hybrid technology.
LOL! Watch the video clip. We always had Pickens Plans and new technologies on the horizon. It was the promise of those that always kept presidents from addressing the demand side of the equation. They didn’t have to, because all of this new supply was going to replace oil. So you are describing 40 years of status quo.
At the risk of seeing R^2's blood pressure explode, I would also point out the NREL billion ton biomass study, that estimates that large scale cellulosic ethanol could replace 1.9 Gboe of oil or 5.3 mbpd.
It’s just delusional, and again the sort of thing that has kept us from addressing demand side. The numbers you quote above are nonsense. What the study said was the in 2030 there could possibly be that much biomass available. But a billion tons of biomass only has the raw energy content of about 7.5 mbpd of oil. That has to be transported and processed, and right now there is no technology that can do that without consuming the vast majority of the raw BTUs.
But it’s all a perfect case study of why we are where we are.
Do you really think that hybrid cars, ethanol and natural gas vehicles, etc. are just intended (by politicians) to lull the world into complacency?
They all symbolize a desire to reduce oil dependency.
I own a hybrid and I think I am reducing my need for oil compared to my neighbor. Ethanol helped Brazil radically reduce its need for oil.
In Canada, the government backed tar sands and now Canada has the second largest oil reserves in the world.
Canada and Brazil had backup plans, the US has Big Oil's plan(drill in the few problematic spots left or import--no plan).
Under a politician, Jimmy Carter, there was a big push to reduce consumption and find alternatives but Big Oil got into the driver's seat with Reagan Bush and the alternatives except ethanol got cancelled. The status quo is total control of our energy sources by profit-oriented energy companies.
And these oil companies have largely failed in the search for new oil. Companies don't care about the future, just about the next quarter.
And they make money selling imported oil.
That's the last 40 years as I read it.
The 'billion ton of biomass' study actually is for 1.3 billion dry tons of renewable biomass.
http://www.ornl.gov/info/ornlreview/v40_1_07/article03.shtml
http://www.nrel.gov/biomass/pdfs/39436.pdf
I guess 'a billion ton study' sounded better than 1.3 billion tons. The efficiency for cellulosic ethanol is given as 45% and one Btu of petroleum is consumed for ten Btu of ethanol.
Do you really think that hybrid cars, ethanol and natural gas vehicles, etc. are just intended (by politicians) to lull the world into complacency?
That’s not at all what I am saying. The previous eight administrations weren’t trotting out all of those technologies to lull the world into complacency. They trotted them out because people like you were easily convinced that they could save the day and thus avoid the tough choices we needed to make.
I guess 'a billion ton study' sounded better than 1.3 billion tons. The efficiency for cellulosic ethanol is given as 45% and one Btu of petroleum is consumed for ten Btu of ethanol.
As we have discussed, those are fictional numbers. When someone actually builds a commercial facility and starts gathering up some of those billion tons, moving it to a conversion facility, and processing it into fuel – then we can talk about actual efficiencies instead of optimistic projections.
So that people can wrap their heads around the Biomass issue just a little better.
Imagine 310,000,000 americans carrying 22 pounds of leaves to the big processing plant near them each and every day for a whole year. That is 1.3 billion tons of biomass.
That is more than they would themselves produce in waste products per day. Just the energy needed to carry the 22 pounds very far would mean they might need to eat another meal that day. Oh and remember this is everyone, babies and old sick people included. So if you have any old sick people, or babies in your family, you need to carry their loads yourselves.
This is also more than all the trash a person generates in one day.
People get starry eyed when others throw big numbers out there, and never bother to take the time to make those big numbers in more usable forms.
If you had to go out in the yard and cut down the 22 pounds per day per person, you would denude your land pretty fast. Especially since that total was DRY weight not water filled weight.
I could in turn take 22 pounds of biomass and improve my soils by just a few weeks worth of it, That would be the best use of the the biomass in the first place.
I recently got on sale six(6) 2.2 cubic Feet of Peat Moss bales. That would be about 2 weeks worth of the 22 pounds of biomass for power generation I get as soil improvements. It'd be neat to get 26 times that, plus the 22 pounds per both my parents for the year. That would work out to maybe 400 peat moss bales, more than enough to use for the next decade. silly me, I could of had a V-8.
Charles,
BioWebScape designs for a better fed and housed world.
Hugs from Arkansas.
If I could get 400 bales of hay, I'd make a nice house out of it. Hey maybe you can convince those Biomass people to build houses with all those tons of biomass, and save energy that way?!!?
The problem is not one of leadership - it is one of FOLLOWERship, of CITIZENship. The reason why our "leaders" promise painless fixes is that we-the-people demand no pain, no sacrifice, no self-restraint.
So long as a voting majority of Americans demand the lowest possible energy prices, talk of higher taxes on fossil fuels will remain just that - talk.
I would ask every one who is reading this post, "Do you need gasoline pumps to tell YOU to keep your hand off that nozzle as much as you can?" Good grief, when we expect technology and regulations to substitute for enlightened self-restraint, we're in deep, deep trouble.
This is a moral problem. We-the-people have gorged on all-but-free manna and now we're terribly spoilt.
An individual's morals do not exist in a vacuum but in the context of the greater society. Individuals need mentors to inspire and help define their morality. Who are today's mentors? Our politicians are chasing power or defending their sweet asses and our corporations are driven by greed or fear of litigation. Our religions are anti science and looking to the invisible man in the sky.
We need to address this. For rational analysis is futile when the power structures that need to act on this analysis are irrational.
Can the individual and collective align together toward sacrifice? Here in America? How about China? Anywhere?
At what point do consequences become severe enough to align us all toward the required sacrifice?
An individual's morals do not exist in a vacuum but in the context of the greater society.
I agree. I blame consumerism for our current state of U.S. affairs. The gullible public has some blame, but didn't get where they are all by themselves.
Hey, now there is an idea. Just like cigarette packets the petrol pumps should come with a warning.
"Warning, use of this product could jeopardise your financial future". ;-)
Yet another difficult variable to the energy independence equation is population growth. Population growth within the US, from 1970 to 2010, has been approximately 50%. We have grown from 203M to 309M during this period...
Increasing illegal immigration in the hard times to come will probably boost the U.S. rate of population growth, IMO.
It is entirely possible that illegal immigrants "stealing" American jobs during really hard times will find themselves suffering the same fate as "horse thieves" in the old west. Suspended by a rope from the nearest horizontal support?
During really hard times, "Justice" is very often swift and uncompromising.
I agree that Immigration Policy is a part of the excessive growth problem. However, I also believe that Tax & Social Policies will need to be modified, and enforced, to shift the cost of the excessive growth to its source demographic. If this is not done, the "I am entitled" mentality will continue to prevail.
IMO the "I am entitled . . ." mentality is getting worse, especially among the middle-aged and elderly but also among younger people.
"I am entitled to an 8% return on my 401k money!"
Yeah, right.
LOL!
8% was considered "conservative" in the brochure of the scam co. my employer bought into.
Agree. Immigration can be a problem.
Ask the American Indians
WeekendPeak
The funny thing is that just a few decades ago, endowment funds used numbers in the low 3% range. Bubbles, bubbles, bubbles.
IMO, pension and endowment funds should use the yield on TIPs as their guideline for yield and they should also buy TIPs. That way and only that way can you get a safe yield plus protection against increasing inflation.
Even Stoneleigh and Ilargi over at theautomaticearth.blogspot.com say that this mess will eventually end in hyperinflation.
Myself, I'm not so sure about the "hyper-" part, but I do think we will see increasing rates of price inflation before 2020 and possibly much sooner.
Can't get off oil- it will kill the economy-The people will stand up.
Can't end war,close bases- it will kill the economy-The people will stand up.
Can't address health care- it will kill the economy-The people will stand up.
Can't let the FIRE economy fail- it will kill the economy-The people will stand up.
Can't get off GROWTH- it will kill the economy-The people will stand up.
Can't stop polluting the planet- it will kill the economy-The people will stand up.
I guess that leaves only one option WWIII
The economy moves. Sometimes fast, sometimes sloooow, but it moves nonetheless. The same economy that dictates 5000' offshore wells, dictates that those wells are temporary. I would think nature would dictate such too, but nature can be calculated to some degree. In other words, we all speculate for tomorrow based upon today. Gulf Shores Alabama is supposed to get a large influx of oil tomorrow. Maybe yes, maybe no but regardless of what I write here, it will or will not happen. Better for me to be on the beach taking pictures to raise awareness while I wait for my BP check. It is an insane proposition, but it is the best option I can come up with right now.
Tomorrow will be different, let's say 50% bad/50% good. It should be so or maybe our definition of good and bad needs a revisit. All these 'problems' you listed are constantly being solved and addressed. The thing is, we create an equal amount of new problems in the process.
Eeyore;
Why does 'The people will stand up' only translate as WWIII ?
To me this sounds like, "To a nail, every problem looks like a Hammer."
Bob
Can someone confirm if America really does have the trillion-barrels of oil they say we do in Utah tar sands (bitumen) and Colorado oil shale (kerogen)?
If so -- why are we not mining these fossile fuels like we do coal?
Couldn't these resources enable America to totally eliminate the need to import foreign oil?
We do not have an energy shortage in America, we have an energy allocation problem. Of course, if we use better personal and business judgment when it come to energy use, then the government would not have to get involved and life would be peachy. Unfortunately, judging by current consumer trends, energy consumption is rarely factored into most purchases. Therefore, we weakly leave it up to the group and government and then complain about the results. At this point, bring on the $5 gas. I remember when cocaine went to above $100 a gram. That gave rise to the meth labs, which gave rise to home meth labs. I do not condone such drug use (not anymore), but I see some parallels. Cocaine is as cheap and plentiful as I have ever seen it. Heck, from what I understand locally, the price for all street drugs have gone down around here. No out of town customers and it is not like a pot dealer can make a BP claim. Do not worry about the economy. It is a lagging indicator anyways. Do the right thing and the economy follows merrily along.
edit: Just went and looked, I used about 300 KWH last month for just me. I think that is a low average but I am guessing high for the posters here.
"we have an energy allocation problem"
But energy costs money. Are you saying a market price system isn't a good way of allocating resources? Please tell us, what price fixing or rationing do you recommend? Comrade, if someone is caught selling oil on the black market, how should the criminal be executed - beheading, or firing squad?
"Unfortunately, judging by current consumer trends, energy consumption is rarely factored into most purchases."
Yeah, magically, the price of energy doesn't factor into the price of derived goods that consumers buy every day. When gas went up over $3, everyone continued buying SUV's without noticing. People like nothing more than to waste scarce resources, and don't care one whit how much it costs them. Thanks for the economics lesson.
My car gets 35 MPG. My car in 1979 got guess what, 35 MPG. There is no choice of 'systems.' You have to increase price and decrease supply. The rest is dog and pony show.
BTW How many KWH did you use last month and you get my point. We as a society have proven that pure market does not necessarily lead to the economy of conservation. Otherwise, my car would now get 50 mpg no problem.
Edit: Oh yeah and do not call me comrade please. I was active duty during the cold war.
Just to point out, but increasing price is a poor way to ensure that usage with high worth are supported whilst usages which are waste are eliminated.
While the poor commuter that helps run the food distribution system is bankrupted, the rich playboy continues to jet around unaffected.
Resource allocation and rationing make more sense, but its something that has to be carefully worked out ahead of time. Personally I'm doubting this rationing will be done well.
"Just to point out, but increasing price is a poor way to ensure that usage with high worth are supported whilst usages which are waste are eliminated."
Actually, as the prices rises, people will give up their least urgent uses first.
"While the poor commuter that helps run the food distribution system is bankrupted, the rich playboy continues to jet around unaffected."
If the commuter is crucial to operations and if the customers continue to sufficiently value the food purchased then the fear of the commuter going bankrupt is unfounded. The value of the commuter's labor is ultimately imputed by the customers' subjective valuation of the food distributed. As gas prices rise unbearably, the commuter will protest to his employers. The employers will have to raise his wages to keep him employed. Some part of this cost will then be shouldered by the customers.
"the rich playboy continues to jet around unaffected."
As he should, having made valuable contributions to amass his wealth. And what have you done lately?
"Personally I'm doubting this rationing will be done well."
Yes, central planning committees cannot understand the vast knowledge possessed by market participants and cannot cope with the vast amount of market data. Socialists playing with stolen money cannot allocate as well as market participants risking their own money.
We need rich playboys in their jets. It just needs to cost the playboy enough that his jet is propelled by less burning of hydrocarbons. I know an electric plane works I have seen one. A solar one too. Yet the playboy has no incentive unless one is artificially introduced. Just like when we introduce a requirement for the playboy to hire a competent pilot or become a competent pilot. This cost money too. It is not a 'pure market' requirement. Again we can argue about systems and methods all day long, but I try to keep it simpler. We screwed up. We did not make our move to a solution that would prevent this kind of thing fast enough, so we will try to hasten those solutions. There are only a few things we can do, but they will work.
1. Make offshore drilling safer, or do not do it.
2. Use less petroleum, or charge more for it, ration it, whatever works.
We have proven that conservation and alternatives are going to be a reaction. The free market acting alone failed to foster it as an action.
The above is the reason I think the US will collapse, rather than adapt. The unending faith in markets, despite the available evidence.
By the time they've worked out that it doesn't work in a timely enough fashion, the system has already broken. Oh well, there's a good few million barrels of oil for the rest of us to buffer again transition times - thanks for the sacrifice.
Exactly. Pimps should be allowed to do whatever they want. It's hard work, keeping the girls in line.
These would be the same market participants that gave us the Tech bubble, Housing Bubble, GFC, off-shoring jobs, etc?
This mythical 'market' you people believe in does not exist anywhere in the world. A pure market requires all participants have equal knowledge. This is clearly not possible. Further, The Market is now tilted on it's side, due to the heavy use of computers and reactive/predictive programming. Case in point: Trader sells a billion instead of a million, and the DOW drops 1000 point virtually instantly. In your Pure Market, the trade would not have been reversed.
Which is why it may not make much sense. It barely worked out in World War II, with all the patriotic fervor and with the fundamentally temporary nature of the war. Given a permanent mandate, that sort of rationing board would evolve into a mafia of bullying thugs quite quickly.
My hobbies do not often come into play here, but 20th century military history is a hobby of mine. As far as I can tell the real reason for rationing was the rubber shortage. The government figured less gas, less tires. Gas was in short supply too, just not like rubber. It was more effective to ration the gas.
Rationing of most goods such as food and clothing worked rather well in World War II. The gasoline rationing part was leaky, because enforcement of the law was weak; it was too easy for a city person to cheat by going out to Uncle MacDonald's farm and filling up--courtesy of the unlimited gasoline allocated to farmers. Even gasoline rationing worked fairly well until the second half of 1944, when it became clear that the Allies were going to defeat both Germany and Japan.
EI -- Yes...we do have huge reserves in these unconventional deposits. And yes they can be extracted if we accept the negative environmental impact that goes with it. And, most importantly, the price of oil is no where close to making such efforts economicly viable IMHO. Having a trillion bbls of oil in the ground that can't be extracted economicly isn't much different than not having them at all. And yes, if prices boom again some of these resources might be viable. But the price boom will bring about another economic down turn and swing the economics back the other direction. Right now I find it difficult to see a way we can avoid such cycles for a good long time. Just one geologist's opinion.
Couldn't these resources enable America to totally eliminate the need to import foreign oil?
The problem with oil shale has always been a poor or negative energy return. If we have a trillion barrels, but the energy cost to get them out and process them is over a trillion barrels, it doesn't nothing for us.
Because it takes energy to make energy but at diminishing returns
Fist the shale has too be dug up, ground, processed with water then chemicaly treated and then distributed.
It means the net energy you get is low. Too low to justify the cost of digging it up because of coal and way too low to get the oil out of it.
The problem is that Bitumen and Kerogen are not OIL, they are fossil fuel in nature, but not the same thing as OIL. BOth have to be processed to become OIL. You could if you wanted mine them and put them in a hopper in your Fire Place and burn them, with nasty side effects, and LOADS of waste products, not to mention mostly black sooty smoke. Have to clean your chimney about once every two weeks.
But just because we have tons of the stuff, does not mean it is in a form that we can use.
To process the stuff in place would require water and lots of it, and would also require Natural Gas and Lots of it. So if you study the deposits with an Eye to the Energy needed to make them useful, you see that you waste more to make a few bits than you would if you clear cut the whole country of trees.
Too many people looked at the Tar Sands and oily Shale and saw OIL, when that is not the case, so don't be fooled into thinking that they are anything but nice rocks to use as door stops, not on rugs though.
If it could have been used like OIL they would have done it faster than drill in the 5,000 feet of water, having to build Million Pound vessels and rigs and all that infastructure they have spend oodles on in the world's oceans. If they had something easy to get to and easy to make into OIL on land, they'd be there right now.
If they aren't, there is a reason.
Welcome to the world of misinformation on the Radio, and the Internet, check all things you hear for your best interest.
Charles,
BioWebScape designs for a better fed and housed world,
Hugs from Arkansas.
David Frum, of all people, nails it:
http://www.cnn.com/2010/OPINION/06/21/frum.oil.reality.check/index.html?...
Stewart nailed all 8 presidents on what is obviously in most cases lip service to the idea of becoming energy independent. It's become a regular routine in which each new President is told by an aide to add something in their speeches about energy independence.
Carter made the bravest attempt by trying to scale up algae fuel, but the project was nixed by Reagen in a thumbs up to Big Oil and a rejection of Mother Nature.
No....the oil was formed courtesy of Mother Nature....
I think rather than looking back at the terms of 8 Presidents over 40 years, why not look back 800 years. We have lived with so little energy, the steady solar flows, for thousands of years. Only as coal began to be understood and burned (that was very limited at first) did humans find alternatives to steady but constrained solar flows (fishing, hunting, agriculture).
We are like bears used to lumbering through the forest, finding the rare beehive, the salmon now and then we have to catch with effort.....when suddenly a beehive filled with honey the size of, well, Texas, looms up. A mountain of honey! How could we resist? We fall to eating. Its size seems to hardly diminish at all though we gobble up as fast as we can. We are thrilled with this. We don`t have to hunt for food anymore, just sit and gobble up the honey. Some people say it will disappear, that it isn`t "ours" (whatever that means), that it isn`t enough. Yet who can go back to the lean hungry lfe of before? It`s unthinkable! The naysayers are waved off with a fiesty shake of the paw....(sounds of gobbling, grunting, smacking of lips--ummm, do bears have lips?)
The Jon Stewart program was funny precisely because he feigned shock and surprise at the gullibility of the American citizen....but the larger context, of 800 years of scarcity, shows that noone would like to give up any of this magical, powerful, natural (yes, it is) substance without a fight. The alternative is solar flows. Sure they keep you "poor-but-honest", but as long as any of that mountain of oil remains is is too tempting to try to remain "rich-and-living-a-lie". And that is the unspoken assumption that underlies this well-done comedy routine.
Along with about half the population, I decided to write the speech Obama should have given. Here it is (again)
And pa-leeass don't tell me it won't happen, I know, I know.
"Ladies and Gentlemen, thank you for listening to my third speech on our national emergency. As you know, in the first one I gave a statement of the problem: that we have run out of cheap energy, and simultaneously have seriously threatened our environment, and that the science behind this is overwhelming. And that there remains no doubt whatsoever, in the minds of rational people, that this truly is our situation.
We have lived too long and too far beyond our income. We cannot continue this way.
In my second speech, I outlined the potential for disaster implicit in the situation I had described in the first. You were horrified, as well you should have been. I requested doubters to rebut my case, and you know the result, no one gave convincing refutation to my most dire projections, for a simple reason- there is none.
The catastrophe that threatens this nation, and the entire planet is real, growing, and fundamentally, literally, unimaginable.
In response, you have demanded, as you should, leadership. I am the president of the USA, I was elected to lead, and I intend to do so.
As President of this country, and as of now, I am making the following declarations, effective immediately:
1) I declare a national emergency, and in doing so I assume the position of commander in chief, as is proper in such emergencies.
2) I will immediately appoint a director of resources, whose task it will be to see to it that our present capabilities in all fields be directed away from the frivolous, the useless and the harmful, toward the rapid development of sustainable energy resources, and as an imperative first step, this director will announce a rapid and certain rise in taxes, at the source, on any carbon fuel.
This, along with similar moves, will allow the free market to be properly guided by pricing, to the most cost-effective -in the full sense of those words- sources of energy and methods of using them.
3) And this next will be most controversial, but also most necessary- I am calling a halt, now, to any immigration to this country for whatever reason, from anywhere. As you know from my first speech, we are heavily overpopulated, and cannot allow ourselves to become more so without increasing even more the already overwhelming threat of collapse. And to that same end, I am asking for government regulations that make having two or less children a clear personal advantage, as indeed it is to us collectively.
4) I shall gather together the best ideas for further action, from all sources, and, in the immediate future, I will add to this initial list of imperatives.
I have one closing remark. Not every generation is called upon to be heroes. We are called to be. And I intend to see us answer that call."
Thank you for your kind attention. Now, get to it.
I need to pursue grocery independence. I always buy my food from Safeway and they never buy anything from me. They only accept green pieces of paper.
Instead of depending on outside groceries, I'm going to start putting gardens and livestock inside my house and spend hours every day laboriously producing my own food. Because I need to end my addiction to outside groceries. In addition, I'm starting a program of rationing my grocery purchases over the next year. I also will be dieting to reduce my overall food intake.
From the point of view of economic science, this article makes as much sense as my post.
"This of course means that you need to start arranging your life in such a way that a 70% reduction in your petroleum usage over 5 years is manageable."
It doesn't get much more socialist than this. Thanks a lot comrade, please let me know what other aspects of my life you will run and what products I can consume and in what quantities.
I really can't believe how much socialist nonsense has been posted here by various people.
And then, when you don't have any green pieces of paper left, you can actually eat some of that food you produce yourself. Whereas when you try to get food from Safeway with no green paper, you will have less luck. Thanks for making the point for us.
>And then, when you don't have any green pieces of paper left, you can actually eat some of that food you produce yourself. Whereas when you try to get food from Safeway with no green paper, you will have less luck.
I guess what you're implying is: because there is the danger of the US economy producing nothing of value in the future with which to trade for oil, we should damage our economy even more through socialist intervention that 1) redirects capital to extract locally where the marginal cost of extraction is greater and 2) switch from processes consuming cheap foreign oil to more expensive substitutes (e.g. eating expensive locally grown food instead of cheaper food trucked in)
Basically you want to ignore Ricardo's Law of Comparative Advantage. You want to intentionally harm the economy for the reason of xenophobia or something. If foreign oil is so harmful, then I suggest you errect a barrier around your neighborhood and don't allow any oil or oil-derived products in. Good luck.
It's funny that everyone thinks they understand economics. These are the same people who want to drop battleships and nuclear bombs on the oil spill.
Actually, in my haste I got the metaphor backwards. I should have said that when Safeway has no food left, you can still eat.
The point is that much less oil will be available in the coming decades, so the more we prepare our economy to function without it, the better positioned we will be. If you have not studied westexas' ELM, I highly encourage you to do so.
Global net oil exports will be trending to zero in approximately two decades, which would seem to indicate that oil will become more dear. We may have something to exchange for it, but why put ourselves in that position?
>Global net oil exports will be trending to zero in approximately two decades, which would seem to indicate that oil will become more dear. We may have something to exchange for it, but why put ourselves in that position?
We won't. Battered by the recession, people are already making changes - such as reducing their commute length. People will find alternatives when they are confronted by high prices. People will switch to locally grown food when it becomes too expensive to truck food in. Entrepeneurs, guided by the profit motive, will risk their own money on the most urgently needed research.
To recommend that governments intervene is to to suggest that governments have greater foresight than entrepeneurs, and that governments can spend money stolen from other people more wisely than entrepeneurs who risk their own wealth. Both propositions are pretty doubtful. And there are always the moral issues of taking other people's money and curtailing people's freedom. One wonders how much better off we would be if the government hadn't squandered so much already.
"One wonders how much better off we would be if the government hadn't squandered so much already."
Squandered,,, as on Wars for "security" and massive bailouts for financial institutions?
The good Doctor (newbie) actually thinks there will be an economy (one he/she understands, anyhow). Since Doc is bent on BAU capitalism continuing perhaps he can describe how we will overcome the multiple/simultaneous challenges we currently face (peak oil, peak credit, peak complexity, declining resources of all kinds, climate change, environmental degredation, over-population, and peak idiocy).
What's the plan, Doc? Surely you have one......
Perhaps it's time we expose him to the light :)
Or wait for the full moon.....
"Since Doc is bent on BAU capitalism"
Note sure where you got that idea. I'm not at all for business-as-usual "capitalism", which nowadays means huge taxes, huge welfare, huge warfare, and socialist oil rationing. I'm for actual capitalism: free markets based on economic science.
"how we will overcome the multiple/simultaneous challenges we currently face (peak oil, peak credit, peak complexity, declining resources of all kinds, climate change, environmental degredation, over-population, and peak idiocy)"
Peak oil is hardly a difficult problem for an unhampered market to solve, as I explained in my earlier posts. Governments are not equipped with the ability to solve the problem, and will surely make everything significantly worse (e.g. millions of deaths) if it attempts to do so. One million people have already been killed in Iraq, which the US has turned into a charnel house.
And climate change? Yes, the climate keeps changing. Personally I'm excited about the release of CO2, a plant food and negligible greenhouse gas, which will produce a world of lush flora and fauna. 31,000 scientists can't be wrong: http://www.oism.org/pproject/
And peak idiocy? You mean idiocy is declining? The socialists here and the children being churned out of the collectivist concentration camps sure don't seem to be getting any smarter.
Free markets? You mean the ones where the following are not controlled: market power, information asymmetry, externalities, irrational volatility (panics), and moral hazard?
Even very slight knowledge of real economic history should show you that markets cannot work as you claim without active and firm social control. But why let reality falsify the theory, eh? It's so simple.
The Oregon petition has been debunked countless times. Google for "skeptical science'. Political scientists are not a good source for climate science; climate scientists are. But again, why let reality intrude?
The only idiots are those who believe that stability and social harmony are not worth the price, those who think there's a simple answer for problems that have been around for a long time, and those who refuse to believe facts that make them feel uncomfortable, preferring to live in a fantasy world.
Standard question for those skeptics of climate change: What is the atmospheric residence time of CO2?
Good one! If they bothered to try to find the answer, they might learn something. We can hope.
>Standard question for those skeptics of climate change: What is the atmospheric residence time of CO2?
From http://www.geocraft.com/WVFossils/Carboniferous_climate.html
we see that CO2 has declined roughly linearly from about 7000 ppm to 400 ppm over about 500 million years.
Also from this page:
"To the consternation of global warming proponents, the Late Ordovician Period was also an Ice Age while at the same time CO2 concentrations then were nearly 12 times higher than today-- 4400 ppm. According to greenhouse theory, Earth should have been exceedingly hot. Instead, global temperatures were no warmer than today. Clearly, other factors besides atmospheric carbon influence earth temperatures and global warming."
Also check out this page http://landscheidt.auditblogs.com/, it's very interesting:
"One of the main climate drivers is the PDO (Pacific decadeal oscillation) which aligns with solar velocity modulation, the other metric that Nicola shows is the solar distance from the SSB which moves in 20 year approx modulations but fluctuates higher when Uranus & Neptune are in conjunction (see top graph). The two oscillations combining to achieve the largest amplitude of modulation for over a hundred years that also corresponds to the large temperature increase between 1970 and 2000. The IPCC determines this as an AGW forcing but perhaps they have been riding a wave driven by celestial forces that is now crashing down around them? The celestial patterns have been coming off a high at around 2000 and are now well and truly on the decline phase, with the PDO also into its cool phase. Add to this the Landscheidt minimum and the stage is set for a reasonable period of cooling along with a platform to prove/disprove our theories."
Thanks Doc. I guess you have a plan to restore all of the finite resources we rely on , rejuvenate the oceans and aquifers, control population, restore the arable land with mineral rich top soil, all of the things I've been worried about,,, and without any political structure to acheive this. The free market will handle it. Ahhh, pure Capitalism!
Despite yet another record heatwave, I feel better now.
Wrong, CO2 has this interesting fat-tail distribution of residence time. A significant fraction of the CO2 released will hang around for at least a hundred years, so that it is very difficult for the atmospheric levels of CO2 to return to equilibrium when hit with a strong impulse.
That also makes it susceptible to positive feedback effects.
Congratulations on confirming you can't even use an internet search engine to find the answer.
ROFL!
Your username is quite appropriate for someone who espouses the supposed benefits of vampire-squid infested Free Markets!
You explained nothing. You just waved your hands in the air and muttered something about lawlessness markets. Perhaps the unfettered markets can invent us a Perpetual Motion Machine? After all, there is sufficient demand for one.
Which reminds me: where's my hoverboard?
Only some plant families respond favourably to increased CO2 concentrations. Further, plants rely on more than just CO2 to grow (use the internet to find out what NPK stands for). If plants are limited in one need, increases in other needs will not promote further sustained growth.
Dracula is an economist?
Why am I not surprised?
When people articulate a POV you disagree with, do you often find their words leaving contrails high in the sky?
point of view of economic science
For your statement to be true, Economics would have to be a science.
Economics is not a science.
As an economist, I agree with you, Eric. Economics is an art, not a science. John Maynard Keynes was a great artist, and so were Thomas Robert Malthus, Adam Smith and Alfred Marshall. Even Paul Krugman is an artist, though not in the same league as the others I mentioned.
I think "social science" is an oxymoron.
Econophysics is a science. I am doing some interesting work with the statistics of labor productivity. This approach leapfrogs what economists are doing in many ways.
And don't forget that oil depletion is a science, which explains why most economists won't go near it.
Do economists do econophysics? Or do physicists do econophysics? My guess is that even the indexes of the fattest econ textbooks do not have an entry under "econophysics."
Econophysics involves the use of techniques that physicists use for statistical mechanics, for example, to solve what are best described as ensemble problems. The ensembles could be of urban population size, income distribution, and labor productivity.
But Web, you still have not answered my question about which discipline (if any) uses econophysics.
My own discipline, trying to make money.
http://mobjectivist.blogspot.com/2010/04/extracting-learning-curve-in-la...
I do this kind of stuff in my regular job as an analyst. I call it econophysics because I use more knowledge of physics than of economics to understand the problem.
The idea of using a physics approach to economics is an old one. Much of later twentieth century economic theory tried to use exactly the same mathematical techniques that Isaac Newton did in his PHYSICS book for economics. This approach has proven sterile, and many of the younger economists are turning to different (non econometric) approaches. These include steady state economics, environmental economics, institutional economics, radical economics (variations on the theme of socialism), and economic history.
I know its old. Some of the theories were based on early physics models of "ether".
The problem was that economists continued using these long after physicists went to something new, like Maxwell equations.
During the last half of the twentieth century the economists adopted every single new kind of math that the physicists use currently--and then went on beyond physics to find ever more complex kinds of math and statistics. Take a look, for example, at advanced game theory in economics or behavioral economics.
The classic book for econ math I studied was R.G.D. Allen, MATHEMATICS FOR ECONOMICS (or maybe "economists"--can't remember for sure, because I sold the book about 45 years ago.) Take a look at THE AMERICAN ECONOMIC REVIEW--more equations than words in most of its articles it almost seems.
Because .... how can you argue with the numbers ?
We tend to think that number crunching makes it true and correct.
Number crunching is not only useless but dangerous if the underlying model is faulty.
Number crunching can easily lead to faulty and fatal conclusions.
_______________________________
How does that equation go again? You know; the one for O-ring strain under reduced temperature?
The problem is that the economists are still looking for new math because apparently what they have hasn't worked.
Physicists have the basics that work and they are looking to explain new phenomenon.
Someone from CompSci recently has shown that game theoretic problems are largely intractable. Good luck with that.
http://www.physorg.com/news176978473.html
The Standard Model in physics no longer works; it has internal inconsistencies. For example, see the latest research findings on neutrinos. Thus physicists do not have the "basics that work." They cannot even figure out how to reconcile the General Theory of Relativity with quantum physics. In other words, physics is a mess, and string theory is not going to bail out the physicists leaky boat.
You may not like economists' models, but at least they are internally consistent.
Aha.
Now I know you are an impostor.
The old Don Sailorman wouldn't have said that.
How about starting off with a definition of "accounting" that ostensibly accounts for everything;
except that it doesn't account for an awful lot of things, such as not accounting for "externalities" and not accounting for the irrational parts of the human brain that exist even in the allegedly rational brains of economists and not accounting for fraudulent financial data?
Economic theory comes nowhere close to the consistency of Newtonian physics, where the latter is pretty darn good (although not perfect) in the everyday world. Economics is pretty darn dismal every day and in every way. There is no comparison here. Apples and squashed digested bananas.
In economics, the term "accounting" is seldom used as an unmodified noun.
For example, there is "cost accounting," a term used by accountants but ridiculed by economists.
There is national income accounting, which includes rigorous and consistent and agreed-upon definitions of GDP, national income, consumption, investment, government spending, government transfer payments, disposable income, and discretionary income.
You can justly pick on the economics profession for many things, but you cannot fault their definitions. They are in a whole different league from the definitions in sociology (where I did a lot of graduate work) which are vague with the same word or phrase having two or three distinct and different meanings (depending on which sociologist is using the term) and often two or three different terms that mean the same thing. Even a definition of a basic concept such as "culture" varies from sociologist to sociologist, and the meanings have changed over time.
Economics is an exemplary discipline in terms of the clarity and lack of ambiguity of their terms. Furthermore, economics is not split into two or three warring factions, as is sociology. For example, Milton Friedman had civil dialogues with Paul Samuelson for many decades (The two men were friends and colleagues for sixty years.), though Milton Friedman believed in capitalism with as few fetters as possible, while Samuelson was a Keynesian who favored government use of discretionary fiscal and monetary policy. You won't find any such civil dialogues in sociology or political science or psychology or cultural anthropology.
I noticed that you brought in the strawman of sociology. Why?
My favorite branch of physics is Statistical Mechanics, where only the laws of probability hold, yet is self-consistent enough for us to build computers of billions of gates that collectively obey the law with nary a miss.
This discussion about models and accounting entity economics is paralleled by another interesting article posted over @ Steve Keen's web site.
He discusses Wynne Godley's approach which is similar to the balance relationship (increase in commerce value vs. decrease in money value) remarks as well as other accounting entity approaches found elsewhere (Fisher).
There is more here as well as the rest of the article which is very much worth digesting.
Godley's model has a distinct advantage over open- ended 'equilibrium' models in that it insists upon a set of limits within which the various dynamics take place. It's a good model and can be shifted to account for other behaviors in other economic areas. (Deflation in Europe/America leads to inflation in China/S. E. Asia, for instance or the inverse relationship of narrow money or currency and unemployment.) There are also three- way accounting entity relationships that produce high- variability outcomes, like the classic 'three- body problem'. An example is current account balance, sovereign deficit/surplus and currency exchange rates. This three- body problem is taking place in real time between Germany, China and the US with regards to FX and current accounts.
I suspect there is a lot of curve fitting that takes place in the economic profession. At the same time, a simple set of relationships such as velocity of money or interest rate/output ratios (Taylor Rule) are very useful and don't put on airs.
What stymies establishment economics are points where perceptions ... "where only the laws of probability hold, yet is self-consistent enough for us to build computers of billions of gates that collectively obey the law with nary a miss ... " change and the billions of gates that are open instantly close. Modeling the 'Minsky Moments' has proven almost impossible to do convincingly - how does one predict various shades of gray swans?
It is also impossible to model cheating or fraud. Since much of the economic misadventure of the past ten years has been the outcome of criminality, how can an 'honest' economist be properly oriented?
Steve, I think that is exactly where game theory comes in, and what makes the analysis of predicting gray/black swans intractable. That is the point at which everyone involved is playing the Spanish Prisoner con on everyone else. Like you say, instant deadlock.
All is not lost though, in that you let the system collapse, and you use the statistical models to predict how the system rebounds.
There is no rebound if the system collapses into a black hole.
(The ultimate Black Swan.)
This is correct, there has to be a large sector of those not gaming so that the possibility of choice - or operable equilibria - remains a valid option. The proportion of non- gamer is likely to adhere to the ol' 80- 20 rule. Once the proportion reaches a certain point then game theory reverts to mean where every participant 'loses', where the equilibrium is static and all choices fixed.
Everyone was gaming for awhile; 'real estate prices can never go down', 'the (insert currency here) will constantly lose purchasing power', even 'technical innovations will propel ordinary growth- based economics'. This gave the illusion that there was a different set of ground rules. When these white swans lost their paint jobs the outcomes were shocking.
Yes !
Just the mere definition of whether "we" (who is we Keemosobie?) are in:
1. A recession
2. A great recession
3. A Depression
4. A total Collapse
5. A double dip
6. A Recovery
is unknown in the supposedly crystal clear universe of "economics".
Oh dismal science, ambiguity be your other name.
I majored in sociology as an undergraduate because the ratio of women to men in that department was 7 to 1. After graduation I pursued a Ph.D. in sociology and took all language exams and seminars and did research in sociology; all I lacked was the dissertation. Later I changed my graduate major to finance, due to an interest in the stock market.
BTW, if you know sociology is a straw man, how do you know that? In other words, how many sociology classes did you take as an undergraduate? Or are you merely throwing idle assertions around?
Why bring in socialogy when we all know that it is not the most amenable to analysis.
Compare economics to something that is rigorous if you want to demonstrate its apparent superiority.
Classical economics--Malthus, Adam Smith, Ricardo, Jeavons, Alfred Marshall--were all rigorous and consistent with the rest of the disciplines in which they taught, to wit, Moral Philosophy for Malthus and Smith and Political Economy for the others.
IMO economics has regressed rather than progressed since it split off from moral philosophy and political economy.
Web, you would enjoy reading Malthus, Smith, Alfred Marshall. Marshall practically invented the use of graphs in economics. "Graph" is short for "graphical equation," and Marshall used footnotes with calculus to help explain his famous graphs of supply and demand.
My day job is in the definitions game.
Essentially all words and phrases are ambiguous.
Remember Bill Clinton's attempt at clever when he said "that all depends on what your definition of 'is' is"?
But I digress.
In economics there is a term: GDP that supposedly "accounts" for all "domestic" production of all "goods and services" within a 365 day period.
Does the phrase "goods and services" encompass "bads and disservices"?
Clearly air pollution is a bad. Oil depletion is a bad. Or is it? Which day does each happen on? If the Deep Horizon explosion had happened around midnight Dec. 31, which year's GDP would it have gotten accounted into?
How can one possibly know if something is a "bad or disservice" as opposed to a "good or service"? Was the initial drilling of the Deep Horizon well a good or a bad? What column in the GDP accounting do we put these various things under? Or do we simply sweep some of them under the rug?
There are many instances where you simply can't determine if something is a service versus disservice.
Example: A woman (with no health issues) goes to her doctor and gets an abortion on a day that is supposedly the 3 month marker of her date of conception. Is the doctor rendering a "service" or a "disservice"? Which column of GDP should the procedure be listed under for accounting purposes?
If a disservice, is it a plus(+) or a minus (-) in the GDP summation?
Let's bypass the religious arguments and just look at the legal aspect.
Let's assume that if the procedure is performed inside the "3 month" period (first trimester) it is legally defined as a "service", but if beyond 3 months, a disservice under Roe v. Wade.
If one of the "months" in her 3 month gestation period is February (not leap year), i.e. February, March and April; she randomly gets short changed by 3 days as compared to a woman whose "alleged" 3 month gestation period is Nov. Dec. and Jan. I use the word "alleged" because we don't know for sure. So you can see that just a random shift in "month" can randomly flip some activity from being a "service" to being a "disservice". Plus there is always the unknown regarding the alleged date of conception (i.e. suppose she had Biblical knowledge with an SO at around 12 midnight on 3 consecutive days. What is the true date of conception? There are 5 possible answers.)
The world is full of ambiguity.
It starts on the day of conception ;-)
That's Inconceivable!
("You keep using that word. I don't think it means what you think it means.." Inigo Montoya ) http://www.youtube.com/watch?v=G2y8Sx4B2Sk
You are flat out wrong in your definition of GDP. See any elementary economics book--even high school ones--for correct definitions.
All economists know that only market transactions are included in GDP. Hence we have an underground economy and widely varying estimates of how big it is and how fast it is growing.
Aha.
Now it becomes crystal clear.
There is an official Market with capital M and then there is that "other" market.
There is an official Economy with capital E and then there is that "other" economy.
All Economists with a capital E know that.
All other economists (lower case e) don't even exist.
The economics universe is now clear as a crystal ball, complete and self-consistent.
-----------------
Wiki definition:
I'm part of the Market (I participate). What is the final "value" to me as I breath them in, of the noxious gases "made" by a US driver driving his SUV past me as I stand on the sidewalk?
All economists know about negative externalities. Their usual solution is to tax them to make them less. With a high enough tax (say $10 per gallon of gasoline) almost all of the negative externalities that come from the consumer's choice to burn the fuel would be eliminated. Industries can be taxed appropriately to minimize (or eliminate) negative externalities of production.
Dear Don,
With all due respect, you used to be total genius on these TOD pages just a year or two ago.
You don't appear to be the same dashing and poetic Sailorman of yester-year. What happened?
As for ALL economists knowing about ALL externalities and appropriately accounting for same, perhaps you should tune in to the 5-part series in the New York Times regrading the unknown unknowns (and unknowable unknowns --my edit) which the NYT refers to as "The Anosognosic’s Dilemma"
Basically it says that incompetent people are usually too incompetent to know they are incompetent.
I think many "economists" fall into that class of people.
(Probably we all do, myself included.)
____________________________________
Putting a tax on gasoline does not make the SUV go away.
There will always be people rich enough to afford high priced "necessities".
Don't many Wall Street types find a way to afford high priced cocaine?
Especially if they are "addicted" to it ...
as we are all "addicted" to oil?
Keynes was not an "artist", unless you mean to say a con-artist. His mess of a theory was reduced to shambles by Henry Hazlitt (see Failure of the New Economics).
>Economics is an art, not a science.
You're confusing the science of economics with econometrics (childishly playing with numbers).
Doc, as you can see from the inane jokes about your user name and strident, nearly unanimous clamor for higher taxes and nonprofit public transportation, including praise for Cuban impoverishment and one-party rule, it's pointless to talk about liberty or the wisdom of markets. Even at the margins of this stampede to political suicide, Boone Pickens and his acolytes need multiyear subsidies and mandates to compel conversion to natgas vehicles.
The solution to peak oil is obvious, and it has nothing to do with Iraq or Venezeula or government policy. It's called demand elasticity. But you and I are so far out of step with the whim-worshippers that this personal greeting is all we have at the moment.
The indomitable human spirit can't be crushed, and I believe it's possible that America will find its way around the threat of coercion and collectivism.
avonaltendorf, I did NOT praise Cuban impoverishment or one-party rule.
If you weighed 300 pounds and were of average height, your food bill could be reduced considerably at a net gain to your health.
If you had 2 acres of land that was paid off, you could do this. If there was no food in the store, only an idiot would not.
I can see that you're from the "Let's assume that we have a can-opener" school of economics.
Your point of view is the same as the economist in the joke: to ignore reality. My opinion? If there is no oil, we will use less. It doesn't matter what we assume, or what incomplete or inaccurate models say. You can't use oil that isn't in the ground or available for purchase from others.
Speaking as a socialist, don't knock it until you've tried it (and if you(or your dad) use Medicare, well, you're socialists too...)
Who needs a can-opener? It seems like Drac has used his teeth, exemplifying the extractive ideals of the free-market.
Of course, it leaves all those canned calories with something of a tinny flavor, but that's the price you pay when it's all built on greenbacks.
(Sorry, Count, but you're tossing out so much Kool-Aid today, what else could I offer?)
They DO buy something from you. Your paper represents an approximation of what your labor is worth to Safeway and - at a remove - the money-community. Whether this value is appropriate is up for grabs. What the government does is attempt to reaffirm a mean and stable value for money. It does so by accepting it (your labor) for taxes due; it tries to prop up real estate values, the bank system, finance and defense. It does this for its own purposes but largley to maintain a flow of commerce. Commerce is presumed to be valuable, all of what we call 'progress' is the end-product of commerce and business activites.
(This is really not true, culture and art are much more useful and valuable than commerce, but that is another comment.)
Instead of putting your gardens/livestock inside your house (unless you are going to grow pot) you might try the back and front yards. Spending time growing some of your own food, not buying from Safeway, cutting back on spending and dieting are all good steps to take if only for health reasons. Most 'grocery store' food is poisoned by toxic chemicals which tend to concentrate at the top of the food chain in feedlot meat.
Moving down the food chain is good, knowing what is on and in your food is good ... cancer and processed- food related obesity are bad.
Energy and money; briefly- money is a representative. It does not and cannot exist on its own self, it is a derivative of something else. Money either represents a thing (gold, silver, diamonds, oil, etc.) or it represents commerce, the output the issuing country (products, business, inventiveness, culture, military power, etc.) Beginning with the end of WWII and the consequent destruction of much of the 1st world's manufacturing capacity the dollar has represented stability and US- made products (Hollywood, Disney, Coka- Cola, Ford and Chevy, Superman and comic books, television, rock and roll, FUN in general) and was pegged to gold arbitrarily by concord (Bretton Woods Agreement).
Gold - and the lack of real worldwide competition - made the dollar a reserve currency but the products of US culture made the dollar mean something more than just an investment.
What has happened since 2000 (and Peak Oil, btw.) was production has become increasingly expensive and unprofitable due to the rising price/declining availability of crude oil. At the turn of the millenium the decline in commerce was very marginal and only effected employment (the 'Jobless Reconvery' of the early 2000's). As oil prices continued to rise more and more US businesses either shifted jobs (and customers) overseas or automated (putting more customers on the shelf). Eventually enough businesses failed for lack of paying customers that the credit structure itself became compromised.
What happened next as production became unprofitable is that money began the shift from representing commerce to representing a thing: that thing being the driver of commerce which is oil. Analysts such as Doug Noland speak about the money-characteristics or 'Moneyness' of other finance derivatives such as credit instruments. What matters more is the 'thingness' of money, this ebbs and flows with the ability of money to represent commerce more or less perfectly. The ideal is to have intrinsically worthless money (tally sticks or Genghis Khan's paper money) and extremely valuable commerce/business activities. Money value increases as commerce value declines, this is the reason all governments seek to press downward the intrinsic value of currency/money and do so by all means.
(It can be said that the point of recognition of the dollar's 'thing' value being greater than that of commerce is the 'Minsky Moment' for in general the value of commerce increases as that of money declines proportionately, this decline in value being the largest component of inflation.)
Dollars priced in oil are valuable. Don't believe me, look to Saudi Arabia and other gulf states. (They use dollars to buy gold which is one reason why gold prices are rising). As proxies for crude dollars represent the surest way to obtain fuel. As such they are increasingly hoarded, they become scarce, and consequently more valuable in a self- reinforcing vicious cycle. Keynes called this process the 'paradox of thrift'.
Central banks fall powerless. They cannot put more currency in circulation as it winds up hoarded in liquidity traps (often as reserves in the central banks themselves) or it triggers runs (which are high- speed currency/liquidity traps). If currency leaks into markets the oil price rises until a crash takes place destroying oil demand. (It appears another run @ $80 oil is taking place right now. If it does the other markets will react with some sort of 'crisis' which will drive the oil price downward.) It is the trading range that makes the dollar a defacto hard currency backed by oil; a hard currency exchangeable on demand for a valuable physical good.
Make no mistake about it, the ills of the Great Depression were largely the outcome of hard currencies (pegged to gold and exchangeable for gold) and the desire of nations to obtain/maintain gold reserves. This activity became the entire world economy from 1930 to 1934 (when France finally abandoned gold). banking systems world wide were ruined, unemployment skyrocketed, money disappeared from circulation, advanced countries' industries corroded from disuse, and deflation rampaged.
Money was valuable and commerce did not exist. This was the breeding ground of Hitler, Mussolini and Tojo; the Western economies were faced with ruin by currency strength. The rats came out of the woodwork spouting objectivist and other self- serving ideological garbage and targeting scapegoats for reprisals.
People have no idea what is going to happen to them over the next few years. Deflation will smash the United States of America. In order to obtain fuel people will hoard dollars (this is a contradiction but this is what happened during the Depression). Producers will demand dollars in place of their own currencies (just watch). Dollars will disappear from circulation. Fewer will have a job that pays a living wage or will have a job at all. Food stamps will be the US currency (not for fuel except at a ravaging discount to cash dollars.) There will be no generalized credit. Existing credit will be repudiated destroying trust in finance structures. Complex forms of business that require credit or 'hedging' will cease. This and the decline in consumption will slice the GDP. People with 'adminstrative' skill but little otherwise will be unemployable. Deep poverty and crime will increase, women (and children) will turn to prostitution, so many people will make/sell drugs that the prices will drop to near zero (already happening), there will be almost no auto transport (no fuel except for dollars which will be hoarded to obtain fuel). Essentially, this will be the triumph of speculation (the value of oil itself and its proxy the dollar) over commerce.
Ironically, dollar hegemony and general tight- fistedness (oil being more valuable than any scaleable commercial use for it) will leave a lot of easier to obtain crude in the ground for those with the wits and discipline (and a different economic system) to drill for it. This will represent the time when the speculators have driven each other out of business. At this time, the dollar price for oil will appear ridiculously cheap. No one, however, will have money to 'waste' on fuel - or have money at all.
This is the beginning, things will go downhill from there for those who desire the 'machine centered' life. There will be no industrial 'recovery' as the deflationary effects of dollar hegemony expand acress the country and around the world. The dollar will truly ba a) the reflection of the true value of petroleum after it is gone and b) the instrument of both conservation (from the bottom up) and the destruction of the American empire.
At some point the dollar will disappear and producers will only accept barter - food in trade (which will be hard to find in industrial quantities as agricultural surplus productivity will decline with the disappearance of dollars. Barter trade will also take place for weapons. This militarization of crude trade will take crude out of the commercial sphere altogether; the Defense Department will commandeer available fuel.
Relocaliation and an art and craft- based economy will rise from the ashes of the current waste-based non-system which ruins will stand in accusing silence in the background of what, exactly? Perhaps our decendents will build cathedrals as were built during the so- called 'dark ages'.
The world escaped the rigors of hard currencies in the 1930's by breaking gold pegs - going off gold. In order to break the current peg the world will likewise be required to go 'off oil'. The US will have to cut consumption to the degree it becomes a net- exporter. (Importing at any level will simply reinforce the peg.)
This implies a reduction of about 70% from current levels of use. Keep in mind that Cuba has retreated into 3d world status with a mere 20% reduction of fuel use from its peak.
In the new world that is unfolding under your feet, the money you receive will not represent your labors (which are now considered worthless) but an amount of oil that you were somehow fortunate to receive. Since this oil will be useful to someone (and you might not see another dollar) you will hang onto you dollar for dear life, even as you slowly starve. (This happened during the Depression, too.)
________________________________________________________________________________________________________________________
You can (and will) call me names or indicate I am an idiot or a communist or whatever, but I don't care. What will happen will happen and there is nothing anyone can do to stop it. Cutting fuel use in half immediately would be a place to start but carrying on as if there is nothing to worry about - the Ronald Reagan denialist approach - makes the overall outcome that much worst. And ... if you or anyone else can come up with some way to outmaneuver the wonderful dollar/oil peg we have created for ourselves ... I would love to hear it.
Otherwise, God have mercy on us all as we now lack the means to help ourselves!
Intriguing idea to ponder. At that point does everything turn into game theory? In that all everyone does is try to outguess what someone else is going to with their money?
>What has happened since 2000 (and Peak Oil, btw.) was production has become increasingly expensive... As oil prices continued to rise
But have oil prices actually risen?
Remember that the US treasury / federal reserve and fractional reserve banks are continuously creating fiduciary media. In the former case, the money is created through counterfeiting. In the latter case, the money is created through fraud.
Usually, at any given time, the money supply is increasing rather than decreasing. About 98% of the value of the dollar has been destroyed since 1913 through money supply expansion. In the last 10 years alone, the price of many things including oil, copper, silver, and gold have risen around 13%-20% per annum.
So my question is, has the cost of oil actually rising - relative to tangible goods and not simply green pieces of toilet paper fresh off a printing press? If the cost has not been increasing, then does it even remain valid to speak of "Peak Oil" as if it's already happened?
In my neighborhood, the werewolf run organization known as "Safe"way has driven the Ma & Pa groceries out of business.
It has replaced branded groceries with the one and only choice option of Safe-&only-way brand grocery.
Like a fresh juice squeezer, it has slowly squeezed competition out of the system to thus emerge as the neighborhood oiligopoly.
I either get my life-sustaining consumables (i.e. type B+ True Blood drink) from the "Safe"-socialist-way outlet or that autocratic oligopolist outpost let's this comrade in fangs die.
You mock this as being "socialism".
But isn't it the other way around?
Isn't growing your "own" food on your "own" land a form of competitive capitalism?
Who you trying to turn into a sucker?
And as more turn to this form on income-earning, it will depress prices. Will they be on the leading or trailing edge of the wage spiral?
We see something similar even now. Brothel owners (the legal ones) are reporting that as the economy tumbled, more women were applying for jobs there, as it was good income. But at the same time, the patrons had less to spend (and there were less of them).
The first part of your post was about where we need to be, getting as much of our food from our yards as we can. Then again this is what most people everywhere did for most of world history, though only when cities showed up did people start going to the markets to buy food as well as other things.
What has happened in this country over the years is that few people even understand where food really comes from, let alone has a clue how to grow it themselves.
Then you kinda ruin my happy thoughts of you understanding the issues when you say .
Most of us Aren't saying these things because we want to go to a socialist from of gov't, but that if people don't change their habits in time their habits will be changed for them by the lack of OIL available to them.
Best to be proactive than to be reactive. We have seen the writing on the wall and we are still not growing food in our yards? We are still not lowering our usages of things and energy? Maybe just burning through it seems like the only thing to do, but in my mind, if I don't save something, I am wasting it.
In the years to come when you go to the grocery store and the shelves are bare, and you go home and your pantry is bare, remember we told you to watch out for this time. Stop by my house, I'll hand you an apron and put you to work, and feed you when you are done. Yeah It might feel like a commune, but at least you will have food to eat and a place to sleep. If you don't want to stay you'll be free to go.
So what are you waiting for, get some gardening skills ready today, why wait?
Charles,
BioWebScape designs for a better fed and housed world, one person at a time.
HUgs from Arkansas.
"Most of us Aren't saying these things because we want to go to a socialist from of gov't, but that if people don't change their habits in time their habits will be changed for them by the lack of OIL available to them.
Best to be proactive than to be reactive."
I agree with wisdom of your last statement. Fortunately, the market has a mechanism to do that: oil futures. The speculators with greatest foresight, who speed the market to equillibrium, are rewarded with profit. The reality of scarce oil is already being anticipated and priced into each barrel of oil. The price reflects the consensus of speculators who are putting their own fortunes on the line.
If one really thinks we are in danger of running out, then shouldn't he put his money where his mouth is and buy oil futures too?
Anyway, because the price of oil is moderate right now, the market is signaling to us that oil scarcity just isn't that urgent of a problem, YET. I believe, measured against gold, oil is actually getting cheaper.
The way to measure the real price of oil is its relationship to GDP. As oil prices increase to a certain percentage of output - around 4% - output slows. This is from Steven Kopits:
We are about 5% now. Keep in mind this is a US current account hemorrhage of almost $400bn (off the top o' te head) per year. (Similar amount for the Eurozone, no wonder their economy is crashing!)
There are variables:
- GDP is not an accurate indicator, it doesn't measure productive output by itself but includes non- productive finance and consumption activities and government fiscal interventions. Real GDP is lower now than prior to 2008 because of the effect of stimulus. This means ...
- That the lower nominal price is high relative to depressed GDP. Then again, the 'Law of economy' (Occam's Razor) suggests ...
- Lower nominal oil prices reflect the inability of oil customers across the energy user platform to pay the higher nominal price!
Their business has folded, or they don't have a job, or they cannot obtain inexpensive (fill in blank) as a substitute for expensive inputs, or they cannot get a loan or cannot pay off existing loans.
So ... oil scarcity IS an urgent problem because it a) puts its customers out of business and as a consequence b) causes customers to hoard their money (in the event that real prices will become lower) which in turn causes even more businesses to fail. It's a vicious cycle that becomes entrenched in a hurry.
As for the futures markets; these markets are manipulated and of diminishing hedging utility as a consequence. Search 'Chris Cook' here and read the comments/articles. Put simply; the futures can discover nominal prices but stumble over real prices (value). If the value increases, nominal price can (and will) decline. Discovering value requires multiple trades across different trading platforms. This is the province of large institutions that are staffed and highly capitalized ... and also happen to be the exchanges' bank (Goldman).
Can't beat the house!
Energy Independence is impossible right now. They need to stop using it as a cheap applause line.
The Right needs to stop acting as if drilling regulations are preventing energy independence. If we allowed drilling EVERYWHERE in the USA, we would still be dependent on foreign oil. Period. There are too many rank & file people on the right that think hippies & greenpeace are stopping energy independence.
The Left needs to stop acting as if renewable energy could provide all our power needs. Even if we scaled up renewable energy efforts by 10X, we would still be heavily dependent on fossil fuels.
We need to come up with a rational energy plan that provides our needs and moves us away from the dead end that is oil. If we don't do that, the price of oil will . . . and it will be a very painful rude awakening for many people who've been living in denial.
Energy Independence is impossible right now.
No. It is 100% possible.
The average citizen will not not like the result. And the government would not survive such an instantaneous transition.
Total Energy = number of Citizens x Rate of use
The equation needs to stay balanced.
The leadership is interested in fighting a political war. The care and feeding of useful myths that help their side is the choosen method, real world facts be damned. The rank and file, largely believes the propaganda/myths.
One of the left myths is we can make progress by closing down Nukes. Renewable energy will be up to the task, its really a matter of timescale and level of effort. Some of that effort involves using less, and managing demand. But those sound like sacrifices, so they can't be discussed lest some low information voters flee to the opposition.
An easy way to decrease oil used for transportation would be to eliminate air conditioning and heaters in automobiles and light trucks.
It would increase gas mileage a little, and it would decrease miles driven a lot.
It would also simplify the design of EVs.
The resulting increase in drag from open windows would have to be factored into such savings. Also, more showers.
You ain't takin' my heater, dude...though the gas savings from not using my car 4 months of the year would be impressive.
Besides which, in an ICE vehicle, you're using waste heat that has to be exhausted anyway, so there is no savings.
Lloyd
An air cooled engine should produce enough heat to keep the winshield frost and fog free. Without the water pump, and the weight of the radiator and coolant, it should be more efficient. My brother had a '68 VW in Minnesota. See also next post.
Antifreeze is also made from oil, so that could be saved as well.
If an air-cooled engine could be engineered economically to be as clean and fuel efficient as a water-cooled one, that's how they would make them. Honda produced air-cooled engines in the '60's, and had to drag their founder (who didn't want to change) to water-cooled to meet emissions standards. Porsche was the last air-cooled engine from a major manufacturer, and changed for the same reason. I suspect that Porsche continued with air-cooled longer because the additional manufacturing costs to produce things like more fins in hot spots (which can make the engine more difficult to cast) were more easily absorbed in a luxury automobile.
Lloyd
No big deal. I had one of those cars in 1968. It was called a 1963 VW bug. No AC, of course. And the heater wasn't so much a heater as a hand warmer at best. This was in Colorado in the winter. One learned to dress warmly.
That giant sucking sound you hear is the sound of 150,000,000 Americans (give or take a few million) watching everything they have circle the bowel. There is no set of "details" that will allow 150M suburban Americans to move into walkable neighborhoods served by meaningful public transit in five years. Fuggedaboutit. I doubt you could even make things properly walkable for even 50% of people who already live in cities in that time frame without crazy government spending.
The second this policy was announced, the stampede for the suburban exit door would be on. Last guy out of his house, turn out the lights. The first (let's be generous and say) million to figure it out and sell their homes might actually do okay. The next million, not so good. After that, fuggedaboutit. A 100+ million Americans would be stuck with homes and property that would be essentially worthless. They couldn't sell them. They couldn't afford to live in them. They probably don't have enough (any?) quality soil to grow their own food in (assuming that most of them knew how to do so, which they don't). Raising animals? And what are they doing for income in what would by then be a crashing economy? Day trading? Fuggedaboutit.
So, whatta we got? Maybe 50-60M adult Americans (and their 40-50M increasingly hungry kids) with no meaningful way to make a living, no affordable way to move about, nowhere to go if they had such a way, chained to a 2500sf anchor they will never be able to sell, with payments they will no longer be able to make, living in the land of the (nothing is) free and the home of the (better be) brave. Well, at least guns are almost free and easy to get (for example).
Hmmmm. Rationing. 17% per year. 5 years. I like it. Simple. Straightforward. Easy to remember. ;-)
Brian
Which is why it ain't gonna happen, which IMO was part of the point of the keypost.
One more reason to give everyone in america a chunk of land and then they only have to pay the land taxes on it. Then the President can tell them that they will have to live on 17% less oil each year till down to what we get out of the ground on our own.
The big thing is the american dream is gone, we once had it, and now we don't.
Land ownership would set people on the road to being able to fend for themselves like their forefathers did once upon a time.
Even though I posted eleswhere of giving every citizen 1/4 an acre, giving them a full acre would still mean less than 500,000 square miles of arable land to come up with, for the deal. But that is giving all the estimated 310 Million people land. Which is not going to be the case, as a lot of people own land now, and some of those in the 310 million are not citizens.
Giving them the land might not cure anything really, but it is a start in the right direction, If you could even get the President to talk about energy He'd have to have a carrot to hold out too.
My parent's own this house. But I don't. So on my 1/4 acre to 1 acre I'd build a small passive solar Earth shelter, I'd have to decide on a design, there are so many out there to choose from that I could build. I guess I'll still go for my covered cave earth shelter design I did in a long time ago(30 plus yrs).
I don't know about other people, but I am sure I know a few of them that would be happy to get some land to call their own. I guess for several of them I'd be doing a lot of building and design work for them.
In time getting back to the thick of growing a lot of your own foods, and biking where you needed too, or just not going there, we could reinvent america on a lower energy level.
But the political will to do something like this is not out there, it is just a nice dream to while away the hours waiting for the melons to ripen.
Charles,
BIoWebScape designs for a better fed and housed world, one person at a time.
Hugs from a dreamer in Arkansas.
I find people amusing around here...
The same government that had been preaching oil independence for the last 35+ years without much of a success can be entrusted in 2010 to resolve oil dependency. Certainly, any administration would be happy to spend the windfall from the increased oil/gas tax, even if the additional revenue goes to the "general budget; however, rationing oil by the means of "gas-stamp" is probably out of question. The gas-stamp would not generate much of an income and probably cost too much to administer; knowing the efficiency/bureaucracy of the US government, that's probably true.
Energy independence, for the most part, means "drill-baby-drill" for the foreseeable future; oil companies love this idea for the windfall profits of course. The "love affair" starts with less cost for mineral rights, lower taxes, and ends with saving in transportation cost. After all, they can sell domestic crude for the same price as the imported crude; what not to like? As such, you will not see gas price changes at the pump, but your ocean view sunset may have some rigs in the picture, some of them might even light up the sky at night for you. Mind you, I do believe that those rigs do look cool; maybe not on fire but they do...
Drastically cutting oil consumption would have more effect than most people believe around here. If I don't have gas for my car, I can take mass transit (which I already do), grab my bike, or just walk. What do you suppose the food industry will do where they mass produce your food and rely heavily on oil based products?. To cultivate, grow, harvest, process, and deliver food product to you rely on the easily accessible and affordable oil. Go ahead increase your oil/gas tax, but stop wondering why a loaf of bread will be $5-10.
Renewable energy is a pipe dream at this point. Sure, you can have ethanol/methanol, but can you produce it in meaningful volume that will put a dent in the oil consumption in 2010? No, you cannot and does not seems like you will be able to do it soon. Especially when the main ingredient for creating ethanol/methanol is corn that already caused food prices to increase and developing countries going hungry just for US having some traces of ethanol. Traces, as in comparing to the actual gasoline consumption at the same time.
Oil will run out sometimes in the future, albeit I don't believe that it'll be anytime soon. Nor do I believe that until people will be forced they'll address it until then. When the time comes people will make the transition and they will be very creative. Until that time, oil is a relatively cheap and convenient source of energy when compared to any other...
I guess what we are trying to say is that time is now. You and many others disagree, but just look at my photos and understand why I think we win. I also think if we win, you win. I also think you think the exact same thing about taking a laissez faire attitude. Good luck.
http://s892.photobucket.com/albums/ac126/tinfoilhatguy/Gulf%20Shores%206...
TOD is the only place you will find serious formal analysis of oil depletion, anywhere. Economists do not want to do it, and neither do geologists, the US government, and certainly not the oil industry. So if you find that amusing, knock yourself out.
It is not necessarily what you believe, it is what the numbers say. Inferring information concerning oil supply decline is almost a form of forensic analysis, but it can be done.
No argument from me and meant no disrespect; TOD is one of the best when it comes to discuss oil related issues. The technical depth of "know-how" at this site is simply amazing.
What I've found amusing is the reactions to the JS' video. The last seven presidents couldn't break the foreign oil dependence chains, but most in this thread believes the eighth president now can. History says otherwise...
Correct me if I am wrong, but whenever future production is discussed, it is nothing more than estimated numbers for the goods in question. Especially when the subject is yet to be unearthed as in the case of oil. Most certainly theses numbers are based on research and unbiased opinion; however, they are still just estimates. One can find numbers at either end of the spectrum and picking either sides is pretty much based on a believe system. Most certainly the oil supply will run out sooner or later, there's no question about that. Pessimistic people seems to believe that it already started, while optimistic people believe otherwise.
The forensic analysis of the numbers is subjective and not exactly science. And while numbers don't lie, people tend to pile up numbers to support their case.
I don't know about that. People plan for their own personal budget, including insurance and all sorts of contingencies for future unknowns, without having absolute knowledge. What exactly is different about this?
Yes, of course, I know. The statistics and math is hard, and people rationalize not doing it by making up excuses (statistics lie, etc).
The fact you see no solution does not mean there is no problem.
Belief systems are not reality.
Engineers could easily develop a solution once the problem is defined. Defining the problem is subject to the politics. Many people might define the problem as the engineers are stupid. If we had better engineers we could all be driving monster trucks 100 miles a day. If we had a reasonable definition of the problem the engineers would likely come up with a solution that is politically unacceptable.
It seems obvious to me that the government has and will continue to support burning every drop of oil we can produce. Taxing oil might reduce consumption, but then the government spends the taxes which increases consumption.The funniest solution is the one Obama is promoting. Cap and trade. Having a carbon credit in no way guarantees you will be able to afford the price of carbon. Cap and trade will not prevent global warming and it won't provide us any energy. I guess it's the perfect government solution. Politics will guide us, not intelligent solutions.
Jon Stewart's video is awesome.
I've been weaning my family off of oil for over 3 years and made some videos showing people what they can do..I attached one of them here...
http://www.youtube.com/watch?v=hHmXhgBhtWk
MrEnergyCzar
Thank you, Robert, for the Jon Stewart video that serves as a great reminder of how much opportunity we've squandered. It isn't a matter of technology at all. It's the struggle between short-term powerful economic interests and long-term change required at levels ranging from the individual to the entire planet. Not a good vs. evil issue, just a question of whether humanity will come together to make the sacrifices needed to Do The Right Thing, whatever that turns out to be in its details. Stewart's video should remind us that we're both our own worst enemy and our only hope.
Something I haven't seen, that I expected one of the economists here to say: get rid of the E&D tax credits to oil companies.
Subsidies distort markets, just as tariffs do. Getting rid of the tax credits would be a good step on the way to getting the first 17% reduction.
"Subsidies distort markets, just as tariffs do."
Quite true.
"Something I haven't seen, that I expected one of the economists here to say: get rid of the E&D tax credits to oil companies."
I have to disagree with this. A tax credit is not a subsidy. If someone holds you at gunpoint and threatens to steal $200, but then decides they will give you a "theft credit" and only take $100, they aren't exactly subsidizing you. In this case it's best that the theft of your property not occur at all. That would be the least distorting.
When a government subsidizes something, such as the growing of corn, more corn is produced than would otherwise be the case. Same thing applies to oil. Very simple to show this point with easy graphs in economics--just set a price floor above the equilibrium point of the supply curve and the demand curve. Then there is a new equilibrium point at a higher price with greater quantity being produced.
Another effect is that consumption moves from unsubsidized people to the subsidized. If the possible production is limited such as for oil this means that an overall shortage never can be solved by subsidizing but the problem can be moved around. A strong economy subsidizing petrol makes for slightly higher world market price and someone else being withouth petrol. A weak economy subsidizing petrol moves the pain closer to home as unsubsidized sectors of the economy gets strained form the higher prices and the taxation. And such systems allways has transaction losses and can hide problems such as ineffient fuel use untill the subsidies no longer are possible.
Brazil used to pay a bounty to people who brought in dead poisonous snakes. They had to stop this program when it became clear that people were breeding the worst kind of poisonous snakes just to collect the bounty. So, if you want more of something, pay a bounty on it, and people will contrive to find or produce more of the something, whether snakes or oil.
How to reduce oil use by 50% in the U.S. almost overnight (3 years) without much individual mandate:
I don't guarantee any of the data below (most of it was generated off-the-cuff), please correct if in error, serious criticism is welcome (defeatist pooh-poohing, not so much). This is kitchen table (and sink) talk for one path alternative and is focused on oil rather than energy overall.
Basically eliminate (90% reduction) residential and commercial use (fuel oil and propane primarily for space heating) by using natural gas, wood/pellets, and electricity (heat pumps). It's amazing how many houses/neighborhoods with gas are still using fuel oil. This is about a 5% reduction in overall oil use. How? Pay for conversions (~$70B at $5K a pop, would more than cover it). Offset increased natural gas and electricity use by installing 60M programmable thermostats (all residences with an existing non-programmable). Longer term (10 years), offset electricity and natural gas use by weatherizing homes and adding solar water heat to homes in southern climes.
Industrial: If we successfully reduce oil consumption by half, refinery energy use will drop by half. Since this sector consumes almost half of U.S. industrial petroleum energy, this will reduce industrial oil use by about 25%. This would likely creep back up or be partially offset immediately, as we imported crude and exported refined products to better use existing infrastructure. I have not considered this as increased U.S. consumption.
Efficiency gains (industrial audit program) of another 15 percentage points would increase this to a 40% (industrial oil) reduction. Fuel switching from LPG to natural gas would allow another 10 percentage point reduction (in industrial use). Use the LPG saved on residential and industrial to fuel converted fleet vehicles (displacing gasoline, conversion/fueling is easier than CNG/LNG in short term), or export it (longer term there is higher value for this fuel type in less developed economies). Industrial reduction totals about an 11% reduction in oil use.
Transportation: Raise gas/diesel tax by $1/gal, peg to inflation with an adjustment for consumption. This should reduce transportation usage (71% of total) by about 20% long-run (14 percentage points of total). Add minimum liability auto insurance coverage to the gas price. Drivers with points/accidents would be required to purchase a supplemental policy or pay an increased fine. Drivers could purchase comp/collision or additional liability coverage as now. This would raise the price of gas by about 10% (but reduce insurance premiums) and reduce transportation consumption by about 5% (3.5 percentage points).
Mandate and 100% subsidize (ala CARB/Smartway) 20% fuel efficiency (primarily aerodynamic, but nitrogen and lightweight rims and super-singles, etc too) retrofits for heavy trucks ... (3 percentage points).
Tax truck diesel another 25% to keep per mile fuel cost constant.
Pay to make road diesel B20. (2.5 percentage points).
Mandate 20% jet fuel displacement by biodiesel (1.5 percentage points). Foregoing two items will require substantial increase in biodiesel production.
Invest in rail signaling and trackage and update regulations. Divert 20% of tractor-mile truck traffic to rail over three years. (2 percentage points)
Drop import tariff on ethanol. Increase proportion of gasoline displaced by ethanol from 4% to 10%. (4 percentage points). Import roughly 0.5mbpd ethanol from Brazil and Caribbean -- guarantee price floor for 10 years to allow 150% capacity expansion (takes 3 years).
Require addition of real time mileage displays to all 1996 or later registered vehicles (license fee raised, with deduction for compliance). Research proceeding on behavioral effect on consumption but believed to be non-trivial. (I’ll take credit for 0.5%)
Drop speed limit by 5-10mph temporarily (while longer term measures kick-in) on freeways/highways which exceed 55mph (3% of transportation).
Longer term:
Assess Property Tax on employee free parking at best, highest use.
Create carpool information infrastructure to include: Database of fixed destination pairs and times; Algorithm matching of partial routes, partial schedule, different employers, different partners; Free emergency car-sharing and taxi service (up to a quota) for missed connections.
Expand subsidized metro transit significantly.
Invest in improved FAA infrastructure to reduce jet fuel consumption.
Invest in high-speed rail to displace jetliner and individual auto traffic.
Keep raising CAFÉ.
Index fuel taxes to inflation and efficiency.
Reduce oil and gas tax subsidies, increase royalties, severance tax for the #3 oil state.
Real free fast air service at the pump and car wash. Slow air compressors requiring tokens and located away from the pump discourage consistent tire inflation habits. Oregon-style full-service at the pump required everywhere with a mandatory checklist and windshield smartchip? Free air filters and fluid top-off included? Waived by drivers in a hurry, but repeated waivers would generate fees.
After-market tire rolling resistance standard and feebate (CAFÉ style).
For Dr Acula:
5 minutes of commentary on the bankruptcy of your philosophy:
http://www.youtube.com/watch?v=RxPUvQZ3rcQ
CNN now apparently following Stewart's lead:
How the power of oil dogged former presidents, and could tar Obama