The Sierra Club is not happy

Carl Pope, executive director of the Sierra Club, is pissed about the new refining bill.

Read on below the fold. (Hat tip: Gristmill)

Oil industry members of Congress and their allies in the Administration believe that America needs new petroleum sacrifice zones. It's not enough that the oil industry has devastated the Louisiana and Texas coasts by destroying the wetlands that should have protected New Orleans, by fouling the turtle nesting areas of Padre Island National Seashore, and by killing and maiming thousands of residents of Cancer Alley along the Mississippi River. Now, California, Florida, the Carolinas, Virginia, and New England must also be turned over to the oil industry. First we must throw them billions of dollars of taxpayer dollars to ensure their engorged profits. Then we will allow them to build new refineries without regard for their neighbors or for state and local control. Then we will bribe state governors to turn their coastlines into oil fields to feed these new refineries. And then we will eliminate public health standards to make these refineries even more profitable. This is not even a conspiracy -- it's not secretive enough.

One thing Pope says in his post is that he believes that government subsidies to all forms of energy production should be eliminated in order to level the playing field. I don't think I agree with this. If the big corporations are only given subsidies for the renewables, they'll switch more of their output to the production of alternative energies/cars/etc, which will speed up the R&D in this area. Of course they'll still produce conventional petroleum, and cars (etc), because that will always be profitable, but maybe they'll have incentive to make up for lost time on the "energies of the future".

But I could be wrong, so as always, I'm eagerly awaiting your debunking.

Sorry, ianqui, you won't get debunking from me on this one.

As I see it, if you start with the more or less universal model accepted by PO-aware people, that PO is real and is close enough to be at least a Real Concern, then the following conclusions seem (at least to me) to be inarguable:

  1. We need to develop and deploy alternative energy systems, FAST.  Waiting for the market to bring that about, via higher energy costs, is a recipe for disaster because it won't give us the needed lead time.

  2. Market prices for fossil fuels will rise, providing energy and other companies with all the incentives they need to continue production and finding new ways to be efficient.  No gov't subsidies are needed.

  3. Focusing all gov't incentives on alternatives has a very useful side effect in that it will help get out the message to the public about how serious the issue is, and that collective, coordinated action is needed to minimize the human and economic impact of PO.
Lou-I'm in total agreement on your points 2 & 3. On point 1: no, the market won't provide fast solutions because it will perceive development of alternatives as expensive and risky, probably with a poor ROI because of delayed payoffs.

But who is smart and unbiased enough to spearhead such an effort? Government has brought us debacles like the "synfuels" scams, where spraying a bit of diesel fuel onto your coal will net huge government subsidies.

Markets, when they work, provide beautiful practical solutions. Who do you nominate the be the wise, visible hand to guide us through this situation when the market won't work? Maybe Kenneth Lay is available-he understands market failures ...

I agree with the "no subsidy" thing in principle.  When I first heard of it, I thought it sounded like a return to the age-old division: government does basic research, and companies do applied research.  I wrote, at the time:

"My current thinking is that the combination of three things will yield optimum results:

    * tax "bad" energy, and "hogs" of bad energy higher
    * research possible replacements
    * allow a free market in those replacements

That would seem to guarantee that the bad goes away, and the most efficient replaces it.

The problem with the status quo is that the corn lobby fights the hydrogen lobby, and the winner will likely be political rather than practical."

I also wrote that I didn't expect it to happen.  We are left to guess if the current mess is even tweakable, or if it is our bed, and we have to lie in it.

BTW, the Jerry Taylor of the Cato Institute, and Dan Becker ofr the Sierra Club, got together on an earlier no-subsidy paper

The Sierra Club has had a poor record of support for ANY serious energy supply option since Ansel Adams and fellow board members endorsed the Diablo Canyon nuclear power plant.

In the late '70s, for example, they had simultaneous lawsuits in California attempting to stop nuclear power projects, hydro dams, fossil fuel power plants, and even geothermal power projects.

The problem with such advocacy groups is that they show no balance.  If you try to block every energy source, then you are working against every one who needs energy.

As to the mythical "level playing field" - well, Mr. Pope can hold his breathe and turn blue, it ain't gonna happen.  So long as we require regulations, the quantitative effects of those regulations can distort and even overwhelm any free market economic decision.  A case in point is mercury emissions from coal.  A trivial health risk at current levels but a huge handicap to coal plants at the proposed regulatory limits.

Since we can have neither pure energy "command-and-control" nor pure free market decisionmaking, we'll just have to slug it out, one regulatory revision, one EIS, one market rule structure at at time.  The economic warfare tactics that opponents of energy supply, such as the Sierra Club, wage against producers is getting very expensive for the public.

The whole "all energy production is bad" theme of most environmental groups is pretty self-destructive. It feeds into the worst form of NIMBYism that results in people not wanting wind turbines because they "obstruct their view". Jeez, give me a break! Where does it end with NIMBY? How about we go NIMBY on wasteful consumption!

I'll tell you want I don't want in my backyard - wasteful inefficient cars that blare their horn right in front of my apartment at all hours of the night and present the quickest way to the emergency room for pedestrians and bikers.

But in terms of production, I think the real problem is that the local community does not reap the benefits of the energy production. I think each community should try to become as self sufficient in energy production as possible so if Virginia wants to have offshore drill and risk ruining their beaches instead of finding alternatives, let them decide that and reap the benefits or consequences of their decisions. But let it be done locally, not nationally.

In Japan, NIMBYism is responded to with local grants and benefits.  For example, some of the nuclear power plants have adjacent public swimming pools, heated with steam from the reactor next door.

They're very popular.

As to the cars under your window, I promise, I'd never do that to you, PeakGuy!

I thought the effort to put LNG terminal permitting under FERC rather than the local communities was a step in the right direction (ie anti-NIMBY).  The final law looks like a step in the right direction but I'm fuzzy as to the real effects.  Here in California, the Long Beach terminal looks a lot worst than the Channel platform proposal.  We'll probably need both.

unless the nimby-motivated locals produce valuable resources themselves, such as the wild salmon that would not be brought into our small harbor if an LNG plant were sited here
Mercury, a trivial health risk?  Not if you eat game fish.

Improvements like IGCC could cut mercury emissions by 90% or more, along with huge cuts in sulfur, NOx and particulates and a large boost in efficiency.  I see every reason to cut mercury emissions limits.

I have been a Sierra CLub member for many years, although I don't agree with a number their stands. However, I have been angry when, for example, people in CA where I live blamed environmentalists for the energy crisis in 2001. The Sierra Club earlier supported the construction of most(not all) proposed Natl gas powerplants because at the time (the 80's) they were seen as cleaner than alternatives, with plentiful fuel that at the time was often just flamed off. Most of these weren't built for NIMBY or economic reasons. People seem to confuse NIMBY with environmentalism. In fact, the biggest, lawsuit-happiest opponents of powerplants, drilling, refineries etc can also be wealthy, powerful, very conservative communities protecting property values. Just try to site a well offshore a wealthy, exclusive Fla community.

On the other hand, it is true that environmental groups can seem to operate in NIMBY fashion as well, suing to stop a powerplant but wanting the energy to come from somewhere else. Don't forget, however, that most pollution laws have arisen in response to harm that has been done. There are many areas where people are advised not to eat more than a small amount of local fish because many cumulative "minor" sources of mercury finally resulted in unsafe concentrations in the food chain.

When you really start looking at all the subsidies for energy, you pretty much have to look at everything in the chain of energy usage from the source cost of energy to the assets/infrastructure that use that energy.

So for instance, the subsidy that the auto industry gets in having roads made for it is not a direct subsidy for gasoline, but is sure does subsidize the the automobile lifestyle which consumes lots of gasoline. Same with writing off interest on a home loan, allows people to buy bigger homes and therefore they use more energy. and on and on.

Without engaging in a debate over the political / geopolitical motives and correctness, US foreign policy is heavily infused with implied subsidies, exerted both via the military arm of governement as well as the political arm.

I once calculated the true cost of every bbl of crude coming out of the US-influenced middle east - my numbers were not very accurate nor scientific, but given that a goodly portion of the military budget is black and/or can't be easily broken down by region, I think my estimate at the time was light.

Crude had been trading near 40$ a barrel; my calculations implied a 26$/bbl surcharge would cover the military operations in the area.

My point is not to criticize or make value judgements; even if not a single drop of oil came out of the region there would still be military installations and investments in the area. But clearly there is a direct relationship between military spending in the region and the region's strategic value for every barrel of oil.

These costs are never talked about.

mw-nice way to think about it. Here's my rough cut today: US consumes 21mbpd, 12mbpd imported, 19% from Persian Gulf. Over the 30 month Iraq war, I get roughly 2 billion barrels imported from the Gulf. Costs for the war are estimated at $208 billion. If you attribute all war costs, and nothing else, as a subsidy for Persian Gulf oil, it's about $100 per barrel subsidy now.

So, we've actually got oil that costs way more than $105, we just didn't notice.

Bill Moyers is also pretty upset
Thank you for the post.
There are three general issues here, together they form a real Gordian knot:

(1) Economic Issues:  Globalization has created serious economic imbalances as well an increased thirst for energy.  We may be for a bumpy ride here.

(2) Peak oil Issue: How to manage the shift that is coming.

(3) Environmental degradation and serious destruction of the biosphere, and global warming. No more need be said about these two, perhaps the nastiest beasties with which we will ever have to deal.

Each set of issues has its proponents, declaring that its issue is central to all others.  This will not be easy to untangle intelligently.  Handling all three simultaneously is going to be difficult.

Somehow we have to get the experts in all three fields talking with one another, understanding each other's issues.  Right now TOD focuses primarily on one of these issues.  I know that opening TOD to all these issues at once is just too much to handle, but eventually we will have to do it.  I would suggest expanding the core TOD team to include an economist as well as someone who has a solid overview of the last issue: environmental degradation and global warming.

Going along with MW's way of looking at things, lets not forget how the Price Anderson Act subsidizes nuclear energy. Price Anderson limits liability in a nuclear accident to (the last time I checked) $560 million per occurrence. Without Price Anderson, no nuclear plant could obtain insurance -- and no one would dare operate one. Price Anderson in effect transfers the cost of accident risk, from the operators (and electricity consumers) to the residents and property owners near the plant.

The pure economic approach to this mess would be, to price all forms of energy so that they reflect all the external costs (pollution, accident risk, decommissioning, military and strategic costs) as well the "internal" production costs. I don't know if that is the best approach (though it sure would be an improvement over what we have now); I do know that it probably won't happen either.

Price-Anderson says more about the state of American tort law than about commercial nuclear power safety.

Consider the ridiculous trial settlements for trivial items that have been in the news the last few years.  A cagey lawyer could get a huge settlement on punitive damages alone.  Without Price-Anderson, the corporations involved are playing "you-bet-your-company."  The lack of something similar to Price-Anderson in China is retarding their nuclear power industry.  In the mean time, they just burn more coal.  Note that you can't get insurance for war or civil insurrection either.

It is worthwhile noting that the government has not paid out a single penny under Price-Anderson in its decades of existence.  The industry does maintain a very substantial amount of private insurance and regularly gets full refund of its premiums.

And the risk is not transferred to the locals but to the Federal government.  It is vaguely like our response to Katrina and the failure of the federally funded levees.  When a problem is too big, the larger society as a whole has to step in. The benefits of nuclear power to the US are manifold - lower pollution, reduced imports of oil, stable and low electricity prices, etc.  

It has been a darn good bet so far.

This is my first post on this excellent site.  I would advise not to gaff the man off - he has some very valid worries.  Sadly I believe that all environmental concerns will be sacrificed to keep the oil flowing as the reality of PO sets in, regardless of whether it is this year or 2015.  The same is true of other idealistic concerns, such as personal freedoms and the popular myths upon which we built our national identity.  I see this happening now in our domestic and foreign policies.  As people get more and more desperate for energy, what chance do environmental protections have?  We'll turn more and more towards coal, probably in the quick & dirty mode, with resulting ill effects on GW, and ease environmental restrictions that get in the way, resulting in much more direct pollution.  In short, we'll do what ever it takes to get the energy.  And who would be surprised if quite a few of the things done in service of the "cause" will in reality just be manipulations for profit?
One deep thinker asks "What is Wealth"?

He concludes that for the powerful among us, wealth is the ability to fight off everybody else in oder to have exclusive access to the "good stuff" (the sweet spots on this finite planet).

Well, oil is the "good stuff". So according to his thinking, those in power will use their arsenal of weapons to make sure they continue to get the "good stuff" even if no one else does.

Here is the link to the thinker's site:

   Some New Zealand (and partially Australian) slang: "The good oil" is useful information, an good idea, or the truth. "Living off the smell of an oily rag"-surviving on almost nothing, living in poverty.
   So, the good oil is that military power will be used to capture the good stuff, reducing most to living off the smell of an oily rag.
Twilight -

Your first post on The Oil Drum is right on!  I have been in the environmental consulting field for over 30 years, and I have seen how the enthusiasm for dealing with environmental issues has waxed and waned with the times and with who happens to be in power.

In a nutshell, while both the Republicans and Democrats in Washington pay lip service to environmental issues, neither takes them very seriously and will always subordinate them to powerful, well-funded special interests.  While 'saving the environment' was big stuff in the early 1970s, it is old hat in 2005, and most people tend to be bored with the whole subject.

You are totally correct in that as we get more desparate for energy, you will see environmental protection being relaxed or outright ignored.  And maybe that's the way it should be (at least till we get past the crisis point, if we ever do).

For example, we have a refinery here in Delaware that specializes in processing high-sulfur crude. It is 48 years old, has had at least 5 different owners, the latest being Valero Energy (the last time I looked), and has a long and abysmal history of environmental and safety violations, one bordering on negligent homicide.  It just pays its fines (usually after years of legal negotiations) and keeps on doing what it's doing.  While the public for years has been kicking and screaming to have it shut down, there is no way that is ever going to happen, given the current crunch in refining capacity.

So, I think that air quality will take a distant back seat to putting various energy projects on line ASAP.  And as we get more into coal liquifaction, tar sands, oil shale, etc, the amount of enviornmental degradation will increase, thus erasing a lot of the progress that has been made. That is the price that is going to be paid.

Well, this puts part of the problem in a nice, neat nutshell, doesn't it?

"The public" wants the refinery closed, or so they "scream". But "the public" also wants to drive more and more so that "the public" can make ever bigger and bigger bigger killings on mega-houses. "The public" wants to fly more and more for less and less reason. To accomodate all this, "the public" insists that fuel should be dirt cheap and that refineries should be investigated, not for cleanliness, but with a view to forcing prices down. Despite all the hypocritical screaming, then, "the public" would never agree to pay more to bring the refinery up to standard. That old standby, Somebody Else, is always supposed to pay. And so it goes with "the public", on and on, ad infinitum, world without end.

Disregard the demonstrations, and the "screaming", and the silly, unworkable answers "the public" echoes back to pollsters. Pay close attention to how "the public" really spend their money and carry out their activities - once the TV cameras have gone away and "the public" is no longer shilling for them.

As somebody once said, may you live in interesting times.

 Regarding the Delawae refinery I referred to, the issue is not whether the refinery should or shouldn't be where it is; the issue is whether it should be allowed to continue to operate with marginal regard for environmental protection requirements and safety concerns.  By way of analogy, if I habitually drive my car recklessly while DUI and have been involved in numerous acciddents,  I very much doubt you'd argue that I had every right to continue to drive.

As I have seen many times, industry loves to present a false choice: let us avoid environmental and safety requirements or do without our vital product. During the 1970s almost all of the major industries in the US cried loudly that the new air and water pollution regulations were going to put them out of business. Well, it just didn't happen. The ones that went out of business did so mainly as the result of their own mismanagement.

The Delaware refinery is by far the largest single source of sulfur dioxide emissions in the surrounding area, but each of the last several owners has found creative ways of avoiding agreed-to requirements for improved sulfur removal and recovery. This has been going on for at least the last 8 years, and no one really knows when such a system will actually be up and running. Surely, with oil prices what they are these days, it's not that Valero, the present owner, lacks the money.

I think you will see the worsening energy situation being used as a cynical ploy to circumvent environmental protection requirements.

Well, yes. But you said, "the public has been kicking and screaming for years to have it shut down." Not "the public has been kicking and screaming for years to get it cleaned up." That makes the issue whether to have the refinery or not; if it's to be shut down, the appropriateness of its location becomes moot.

If the public wants refineries held to standards, then they need to be willing to pay appropriately for product. Or, perhaps, they can just pray for the best and rely on Saudi Arabia to build capacity.

I just don't see any appetite for paying. Indeed, attorneys-general and other politicians have been rushing to launch investigations aimed at making product prices as cheap as possible, maybe even cheaper than possible. And they've been calling for suspensions of routine maintenance for months now, even before the hurricanes. In that sense, yes, the AGs and politicians are perhaps not that concerned with upholding standards that cost money, at least not just now.

When they get done with their grandstanding, they may well have driven refinery margins right back down to where they were through the 90s, i.e. just enough to keep the rusty old hulks going and not a penny more. Maybe not, but what rational pension fund manager could bet that the current high margins will persist?

I suggest that this whole refinery bill, aside from being pork-laden, is a false lead as far as the future goes. Saudi Arabia and some other Middle Eastern OPEC countries will be building their own refineries in the future in order to process their heavy sour oil and then shipping refined product to the US and others. I doubt many provisions in this bill for new refineries will ever get implemented. Carl Pope and the Sierra Club are pretty paranoid at this point and, well, it's hard to blame them.
When you consider how rapidly products like gasoline and diesel burn off or evaporate compared to thick, nasty stuff like crude, moving the refining to Saudi Arabia makes a hell of a lot of sense for the environment.  Spills will be a whole lot less nasty.

The issue is power and security; a nation which has the refineries for a particular type of crude has a measure of control over it.  If the refineries move to the Middle East, so does the control (and the potential for terrorist disruption soars).

All true, but there's more to it also: the balance of trade will get even worse, as we will be paying for expensive finished products instead of relatively cheap crude as a raw material. And jobs and capital investment move offshore as well. Net result: fewer jobs, less economic growth, lower dollar.
If we do something smart like making ultra-efficient plug-in-hybrid vehicles (post in my pipeline, yadda yadda yadda) we could render all investments in new refining capacity uneconomical.  Think about how much demand would suddenly vanish if most people's daily commute was done at an average of 250 MPG.

I've been arguing since 9/11 that we need to convert away from oil just to collapse the economies of the OPEC dictatorships.  The entire Wahhabist movement will dry up and blow away without our money to give them power.

I personally want a Prius plug-in but...

""What About Super Fuel Efficient Cars?"

Hybrids or so called "hyper-cars" aren't the answer either because the construction of an average car consumes approximately 27-54 barrels (1,110-2,200 gallons) of oil. Thus, a crash program to replace the 700 million internal combustion vehicles currently on the road with super fuel-efficient or alternative fuel-powered vehicles would consume approximately 18-36 billion barrels of oil, which is the amount of oil the world currently consumes in six-to-twelve months. Consequently, such a program (while well-intentioned) would actually bring the collapse upon us even sooner." --Matt Savinar,

"Automobiles: Manufacture Versus Use"

Of course everything won't be converted to hybrids, but some hopefully will and that is excellent. Regarding hybrids I am guilty of an all or nothing argument.

Before pushing personal transportation wonders it would be wise to resurrect the railroad system, at least to the pre-World War Two level of service. 85-95% of fuel use is by cars and trucks. Ship by rail and it takes a bit longer to find its way to your door, big deal.

Actually, if you look at the EIA data for petroleum consumption, motor fuels are 80% while jet fuel is 20% and growing faster!

I think the public disdain for SUVs is misplaced - a better place to attack conspicuous consumption is in "pleasure" airline travel.  I remember being on a short air trip sitting next to some chick.  I was telling her about my new car with a V8 and she started berating me.  Yet she was flying at 600 mph from California to the French Rivera for a vacation at the beach!  She was probably using more resources in her one trip that I would in a year of driving.

Did you actually read the ILEA page you linked to?  It states a manufacturing requirement of 119,755 MJ (about 19 barrels at 6.1 GJ/bbl), and a lifetime fuel consumption of 878132 MJ (144 bbl).

If a car lasts 17 years, it uses its energy-equivalent of manufacture (of which a great deal is NOT drawn from oil) about every 2.5 years.  It's even quicker at the beginning because newer vehicles are driven more.  A vehicle which increased effective economy from 25 MPG to 250 MPG would save its energy of production in less than 3 years, and probably less than 2.  If we substituted hypercars for current production, production could be ramped up very rapidly without changing energy consumption because of the savings from the new vehicles.  If we are only concerned with energy from oil (and not coal, wind, etc.) production could probably be doubled.  (It would make no sense to increase capacity very much because the factories would be idled after the replacement was over.)

Strange that Savinar wouldn't grasp that... or maybe he's trying to lead people away from that concept.  What side is he on, anyway?

Read it, and yes moving from 25 MPG to 250 MPG is a good thing, it should have been done back in the 70's when it would have made a lot of difference. Savinar estimates a changeover would use six-to-twelve months of world oil usage. "Spending" that oil in order to reset the energy consumption of our transportation profile ignores the effects of increasing world oil demands. It buys a bit of time. Logical, but so is throwing that oil at renovating rail/mass transit. I love the "freedom" of going in my personal car, yet the is no backup to cars and trucks, without them there is no going at all in most places anymore.
moving from 25 MPG to 250 MPG is a good thing, it should have been done back in the 70's when it would have made a lot of difference.
It wouldn't now?
Savinar estimates a changeover would use six-to-twelve months of world oil usage.
Okay, let's look at this.  The USA uses about 20 million bbl/day, so by Savinar's estimates a changeover in the US would take that much divided by the length of the changeover.  If we started with all new vehicles, the annual savings (about 4% of cars and 9% of trucks per year, per Rick's figures) would be about 3.6% for cars and 8.1% for trucks; the net would fall in between.  The changeover for trucks would be complete in 11 years, with the net savings averaging 45% or 5 times annual truck consumption; the changeover for cars would take 26 years, with the same 45% average savings running to a total of 11.7 times annual car consumption.

It appears that the "problem" of the need for energy to build energy-saving products can be addressed by doing the replacement at a measured pace; to the extent that this invested energy is offset by not building less-efficient products, it would be a win from day one.  If consumption can be cut at the rate of 6% per year, this would more than outpace all but the most pessimistic rates of decline in oil production.

Last, note that the above figures are averages.  New vehicles tend to be driven more than older vehicles, so the savings from production of hypercars would be front-loaded.

I love the "freedom" of going in my personal car, yet the is no backup to cars and trucks, without them there is no going at all in most places anymore.
That's why I'm pushing so hard on electric propulsion; it leaves much territory still accessible and liveable even if there is a serious liquid fuel crunch.
Savinar estimates a changeover would use six-to-twelve months of world oil usage.

I read that as total world oil usage, as in ~82bbd(?) * six to twelve months. Was I mistaken?

BTW Cal Cars has a Plug-in hybrid list.

Nobody said whether Savinar's figures were to convert the USA or the world, so I figured the latter and that the ratio would be about the same for the USA alone.  Since no cite was given I can't check specifics.

If we muck with the ILEA numbers, a car needs about 19 barrels of oil equivalent (BOE) to build and uses another 144 BOE in fuel, plus another 17 BOE in the fuel cycle (total 161 BOE); if the life of the car is 14 years, the car and the fuel cycle burn the equivalent of its manufacturing energy in about 20 months.

A large part of the energy of construction is drawn from non-petroleum sources like coal for smelting steel, so the actual petroleum portion for manufacture is considerably smaller.  If hypercars required 50% more energy to build and half of the total was from petroleum (for e.g. FRP to replace metal) each hypercar would consume ~14 barrels of oil to build.  It would then save 10.3 barrels of oil every year (90% of 161 barrels over 14 years).  It looks like a complete switch to hypercars would result in a brief bump in oil consumption followed by a slide to pre-switch levels in about a year, and a continuous decrease until conversion was complete.

We need ultra-efficiency, but it won't and can't cause a sudden drop in gasoline demand. The US has about 130 million cars, plus 80 million light trucks on the road. Production in the US is about 5 million cars and 7 million trucks annually. Do the math any way you want. Hirsch estimates that it will take 10-15 years and $1.3 trillion to replace half the fleet.

And let's be realistic on the mpg figures. I understand a plug-in Prius, using predominantly the electric motor, can get about 120mpg for a short distance. Real world, the winner of the 2004 EnergyWise rally in New Zealand was a carefully driven Prius which achieved 70.3mpg. Every other production car entered used more fuel. We've got a long way to go before we can practically get to 100mpg, let alone 250.

We need ultra-efficiency, but it won't and can't cause a sudden drop in gasoline demand.
That much is true.  The only thing which can do that is changes in usage, which can happen just about overnight.  But buyer preference (and other reactions, like changes in housing patterns) can cause long-term ramps, both positive and negative.
And let's be realistic on the mpg figures.
Define "realistic" in this context.  If I've got a plug-in hybrid commuter-cycle which runs 100 miles on its batteries and then gets 100 MPG, I probably won't need any fuel except on medium to long trips.  If I need to use gasoline for 40% or less of my driving, I would average 250 MPG or more.  (100 MPG would be relatively easy to do with the current state of the art in aerodynamics in a sufficiently small vehicle.)
I understand a plug-in Prius, using predominantly the electric motor, can get about 120mpg for a short distance. Real world, the winner of the 2004 EnergyWise rally in New Zealand was a carefully driven Prius which achieved 70.3mpg. Every other production car entered used more fuel.
ISTR that a non-hybrid VW Lupo diesel averaged over 90 MPG in a test around Britain a while back.  The Li-ion Prius+ can go up to 30 miles without starting the gas engine, achieving infinite MPG.  I've seen articles which claimed 180 MPG on a fairly typical drive.

A vehicle designed around a much larger battery pack could do considerably better.  That's one thing we don't have; all current hybrids are either modifications of current gas vehicles (original Prius, Escape, Civic, Accord, Lexus, all GM trucks) or have a very small volume devoted to batteries (Insight, current Prius).  If room is allowed for more bulk and weight of batteries (to allow cheaper batteries to be used), more demand can be transferred to electricity.

We've got a long way to go before we can practically get to 100mpg, let alone 250.
That depends how you define "practically".  The Li-ion Prius+ is currently too expensive to be practical, but it's a very practical vehicle to use.  If you made something like a hybridized EV-1 or an Enigma, you could easily average over 100 MPG in typical patterns of use.  Part of the problem is that all current vehicles (or the mods) are essentially hand-built.  Volume production could slash the price of everything except batteries, and a vehicle designed around lead-acid batteries wouldn't need much money for those either.
I think pushing the technology is great, but we need simple, fast, cheap improvements that are basically in the pipeline already, things like small cars and diesel engines.

Here's where I'd start: the average mpg of the US 2004 model year fleet, cars and light trucks/SUV's, was 24.7mpg. The French fleet averages 43 mpg.  In other words, the average French driver goes 74% farther on a gallon than the average American. Let's do simplicity first.

If governments can find billions of dollars for foreign wars they can find money for domestic energy projects. The trouble   with 'political' decisions is that they tend to be blind to medium term realities. Example: I think there have been big subsidies for fuel cell cars but little other than tax breaks for hybrid cars. Therefore the government backed the wrong horse and gave people false hope. I say give big subsidies but pull the plug after say five years of no progress. My gut feeling is that hydrogen, clean coal, fusion, wave power and a few other things won't be ready in time if ever. Giving them extra subsidies is throwing good money after bad.