"The Blame for High Gas prices"

Richard Serlin:

The blame for high gas prices rests on simple-minded Republican ideology not speculators, by Richard Serlin: In Paul Krugman's June 27th column he writes:

Why are politicians so eager to pin the blame for oil prices on speculators? Because it lets them believe that we don’t have to adapt to a world of expensive gas.

A perhaps even bigger reason why Republicans want to blame speculators for sky high gas costs is that they don't want the public to put the blame where it's really due – on them.

For decades Republicans have constantly blocked Democratic attempts to increase fuel mileage and many other efficiency and conservation measures. They've also constantly blocked or cut spending on alternative energy, all the while mindlessly chanting "Free market". The economics community had proven long ago that there are many situations and ways where a government role can add greatly to efficiency, wealth, and welfare, but this is a party that long ago refused to think beyond slogans. They acted as though not being simple-minded was a vice, liberal and un-American, when in fact, thinking, and believing in science, evidence, and logic is one of the things that made this country great, and the richest and strongest in the world.

Now we're paying a big price for Republican ideology in energy and so many other things. Had the Democrats not been outvoted, filibustered, and vetoed from enacting their "big government" mileage, conservation, research, and other energy measures over the last almost three decades, gasoline might be less than half its price today...

And, of course, it wouldn't hurt that this would have starved the terrorists, and some of the worst authoritarian regimes in the world, of money, and greatly decreased the momentous risks of global warming,... benefits that aren't taken into account by the magical free markets. ...

Comments

[degustibus]

as long as we keep yammering about the price of gas, we're distracted from focusing on alternative fuels. btw, who killed the electric car?

[Larry]

@degustibus - The electric car isn't dead. The next few years will reveal a host of them.

More broadly, Republicans (and the public) prevented higher fuel economy standards, but would that have made a significant difference in today's oil price, which is driven by limits on supply and explosively rising demand in Asia?

I have not seen a quantitative comparison of how much oil CAFE would have saved versus how much (Democrat-and-the-public-blocked) greater drilling would have produced, but I bet the amounts aren't significantly different.

[Real Person from the Real World]

Under the slogan of "Free Market" the Republicans have gutted the American way of life. It's time we let go of the capitalism and greed is good philosophy, and start thinking about what we need to do to make the economy work again. Fuel efficient cars, better yet electric cars not dependent on outside whimsy of location and politics we cannot control. Single payer health care that doesn't have to be rationed, and where resources are handled efficiently and where everyone gets access because it is not based on job and income. An educational system that provides an education to anyone who wants it, without putting them in debt for life, because an education at least gets a person thinking, and that perhaps. will result in better decisions overall.

[bakho]

For decades Republicans have constantly blocked Democratic attempts to increase fuel mileage and many other efficiency and conservation measures.

The question is why did they (and so Democrats) support this policy?
Who Benefits?

Big Oil.

Who pays their campaign bills and funds their think tanks?
Duh!

[bakho]

Larry here are some "crude" estimates based on EIA data. (million barrels per day)
Oil use in US: 20.7
Motor gasoline consumption: 9.2 or 44% of total oil consumption.
Average Fuel economy in 2006: 22.4 mpg

If we raised the standard to 30 mpg we could travel the same miles for 25% less gasoline. Light trucks are even worse gas mileage (18.0 mpg). Improving their efficiency by 25% (or switching from SUV-trucks to more efficient cars) could easily save 25%. Gasoline consumption would drop to 6.9 mbd from 9.2 mbd or 2.3 mbd. Overall oil consumption would drop from 20.7 to 18.4 mbd or 10 %. Since the US uses 25% of the world oil, this would be a 2.5 % drop in demand. This would put demand back at pre-2000 levels. What was the price of oil then?

This is with minimum improvements (30 mpg) in fuel efficiency.

[Ted]

For decades Republicans have constantly blocked Democratic attempts to increase fuel mileage...

Would increased fuel mileage have led to lower gas prices, or would we have stepped into it by increasing consumption (per unit sales for example)?

One good thing from the current gas prices is that it may alter behavior (moving inwards, increasing telecommuting) and going back to the one-car model supplemented by enhanced public transportation. Of course, the one-car model does result in the destruction of the local auto industry, but it may have been shifted toward manufacturing public conveyances (given a reasonable plan).

[anne]

Bakho:

"Larry here are some 'crude' estimates based on EIA data. (million barrels per day)

Oil use in US: 20.7

Motor gasoline consumption: 9.2 or 44% of total oil consumption.

Average Fuel economy in 2006: 22.4 mpg."

Please set down the precise references if possible; I am not surprised at how much saving in fuel use there could have been however.

[anne]

Essentially fuel efficiency seems have have stopped improving about 1985-1986, as the standards set during the 1970s were static, circumvented and made theoretically suspect by conservative economists who forever worry about market interference even when there is continual interference for industrial interests.

[anne]

When I decided on a Prius (red), I learned to my suprise that even the efficient little Toyota Corolla was getting about the same mileage in 2006 and in 1986.

[save_the_rustbelt]

I really hope California succeeds in setting its own fuel economy measures, so that 80% of the cars made on the planet cannot be sold in CA. Listen for the screaming ans whining.

Anyone who says the GOP caused all of this apparently has never heard of John Dingell or Carl Levin. Both parties are at fault.

But what does truth have to do with this?

[ddt]

I dunno if it's just me, but I really don't like the politicization of this debate. The rampant insinuations that anyone who doubts the fundamental story for current prices is blindly swallowing republican talking points, or worse, consciously propagating them, are really really annoying.

My position(s):

-I've been a long time commodity bull, so I don't need to be told about the fundamentals - they were there for years, but the prices have spiked to an absurd level

- even if we are near or at peak oil, as paine pointed out THERE IS STILL A VERY VERY HIGH CHANCE THAT WE HAVE A COUPLE MORE PRODUCTION CYCLES LEFT. If that is the case we are being set up for a brutal bust and a glut of cheap oil that will set back the development of green technology by a good decade or so. doubt the commodities cycle at your own peril! it always sounds like this at the top.

- fast run-ups in prices are bad, a bursting commodity bubble is bad. steady prices are in everyone's best interest (producers, consumers and environmentalists). Both oil production and green solutions require long term planning. that requires price stability

- I'm not a Republican. Actually I'm a Canadian, and I stand to benefit immensely from high commodity prices. Goodbye national debt, hello SWF. If we have $140+ oil and high natural gas, electricity, base & precious metals, grain, meat, legume, and fertilizer prices for the next decade, Canada could be the richest country in the world by 2020. It's a nice daydream..

- At these high prices Canada has a massive undeveloped productive capacity that could be brought online. In the case of oil it would make the vast oilsands reserves economical and greatly increase the amount of usable reserves in the world. We have huge reserves, a cutting edge oil industry and we can increase production capacity if the demand is really there. so one important thing to remember in this debate is that every 'permanent' increase in price in effect increases usable reserves and increases medium & long term supply. This is a strong countervailing force that, along with the demand destruction that is already taking place, assures that these prices are not here to stay.

And this is the thing: we've been here before, back in the 70's and early 80's. The arguments about peak production and growing demand were all the exact same, there was a huge run-up in prices, Alberta boomed, then the prices inevitably went bust and had disastrous results.

Being in a commodity dominated economy during a bust is brutal, and it is something that I don't think many Americans have an understanding of. People were hanging themselves in their garages in Calgary, farmers were getting thrown out of farms that had been in the family for generations, companies that are often the sole employers in remote communities shut down overnight. no jobs anywhere, everyone carrying big debt loads with high interest rates based on the expected commodity prices that never materialized. It gets really ugly, really fast when the bottom drops out of commodities. That's why I want to see this bubble deflated before it gets even more out of hand.

[ScentOfViolets]

Richard, Larry, Bakho, et al: Republican perfidy makes for a nice story line, but unfortunately, It Just Ain't So. All they did was offer a product, that being an ideology and a set if political positions that told the American voter that it was OK to consume heavily, that taxes were too high, and being spent on the 'wrong people' to boot, that America is the bestest country ever, that Americans are the goodest people, and that our Way Of Life was divinely ordained.

And the voters bought it. Bought it in such a way, in fact, that no blame attaches to them - at least in their own minds - for being in any way responsible for when things go south. To some extent this can be blamed on the mainstream media. But by far the greater share of the blame lies on the voter himself, especially since so much as been made of rugged individualism, and there seems to be something of a cult of 'personal responsibility'.

It doesn't take much in the way of brains, or thinking, for example, to realize that Carter was right concerning the matter of conservation, research into energy alternatives, etc. In fact, it's blindingly, excruciatingly obvious. But it was a message people didn't want to hear, and collectively we were foolishly wealthy enough at the time to avoid the repercussions of that deafness(in fact, that's probably the ultimate reason for a lot of our national problems. Yes, great wealth can insulate you from responsibility for poor decisions. While it lasts.)

[Jim]

Is there any evidence that the private sector has underinvested in alternative energy? When gas prices go up, you will get more research in alternatives, as you will now. That's how it's supposed to work.

If you want to argue that taxes are not high enough to deal with the externalities, that's one thing, that is a legitimate market failure argument. But this market-bashing is just as "mindless" as the people the author doesn't like. Comparing some idealized, perfectly timed government investment is not helpful.

[Walt]

So the Republicans caused high gas prices? Not China, not India, the Republicans! And where is the proof? The fraction of savings (after accounting for the fact that people drive fuel efficient cars more miles than before) would be, to make up a number, 3% of oil used in the US. This could cut world demand by less than 1%. That would have almost no effect on the world price of oil. Only a true believer in government coercion would believe that sticking a gun to people's head and telling them to drive more efficient (and thus more unsafe) cars and to use only government-approved gasoline is a good idea.

[Anonymous]

I don't think there is any doubt that this is an externality/market failure situation. Can anyone really doubt that the true cost of using a finite resource like oil that is likely causing huge environmental problems was more than most people were paying the last 20 years? Most countries in Europe have been correcting this market failure with high gas taxes for many, many years. Those countries are now far less dependent on oil than we are. It's not like we don't have ample evidence that other politicians in other countries identified this problem and found solutions.

[anne]

The politics of a discussion on commodity prices is and should be completely evident, since thinking and acting "conservatively" in terms of energy to materials to land use has been fought against for years by supposed conservatives. So pervasive was conservative thinking leading to an absence of conservation, that the idea of directly acting to influence markets was increasingly dismissed even by liberals after 1980 even though market interference for conservation had long been wildly successful in agriculture and eventually to automobiles and appliances.

[John V]

I'm surprised Dr. Thoma didn't comment on this. He knows very very well that foolishly blaming speculators is coming from everywhere and it's coming from the economically illiterate as well as political opportunists...who are often the same people.

He also knows that it's nota simplistic party or ideology problem. It's very complex and has multiple factors starting with most obvious: supply and demand.

Somehow I doubt even Krugman would agree with interpretation of his own words.

Not helpful.

[ken melvin]

So - politicians tell the people what they, the people, want to hear. Who would of thunk?

[anne]

Beyond America, there was startlingly little concern in World Bank spurred projects for conservation, again because of acceptance of an American consensus-free-market push for development which was fortunately selectively ignored first by Chinese and second by Indian leaders.

[Bobby]

I am not convinced that speculation is the primary cause of the rapid run up in the price of crude oil. However, it seems clear that the surge in the price of crude oil has produced an increase in the supply of speculation, if not speculators.

[halbhh]

While it's fair to say that "economics" does indeed involve a certain political element, I bet most of us would as soon forgo name-calling and other low elements of the common political mish-mash of TV talk shows. Reading a post where someone labels people on the other side of a discussion is....

only a waste of time for me.

[Cynthia]

I'm sickened beyond words that two oil men in the White House for nearly eight years chose to ignore overwhelming evidence that global oil has either already peaked or is about to peak -- thereby choosing to do next to nothing to prepare this great country of ours for an era of dear oil. This just goes to show that the Bushies care more about corporate America than America itself!

But then, the true beneficiaries of corporate America have amass so much bloody wealth that they are free to relocate to a place in the world where there's infrastructure that don't depend on petro to function. So I find myself again sickened beyond words that these corporate beneficiaries are not only free to relocate to a place where others are free enough not to let corporate America have the upper hand, but these corporate beneficiaries are also free to leave the rest of us high and dry!

[Cynthia]

DDT,

I'm curious how long you plan to ride the commodity bubble before the damn thing finally bursts...

[Michael Cain]

All they did was offer a product, that being an ideology and a set if political positions that told the American voter that it was OK to consume heavily, that taxes were too high, and being spent on the 'wrong people' to boot, that America is the bestest country ever, that Americans are the goodest people, and that our Way Of Life was divinely ordained.

And as near as I can tell, the Republicans are going to run on essentially the same story again this year: Your taxes are too high and only Republicans will lower them, let Big Oil drill in the places where they're not allowed now and cheap gasoline will return, negotiate with Big Insurance on your own instead of having your employer do it and you'll have affordable health care, and if we make the states quit regulating Big Energy, we'll get to that "too cheap to meter" that's always been promised.

It's simple, it's positive, and I'm not entirely convinced that they can't pull it off again, recent polls not withstanding.

[anne]

Darn, something relatedly bothers me even beyond Cynthia having a garden filled with desert plants to save water.

Why should it be that agricultural productivity declined by 42.9% after 1990; that is productivity in grain fiels declined by 42.9% compared either with the period 1950 to 1990, or with the period 1980 to 1990. The productivity decline began about 1990 and to 2007 showed no increase. Productivity cycles are taken in 3 years increments from 1950.

I am led to believe that have been entering a period of promise in agriculture, but where is the general evidence?

* http://www.earthpolicy.org/Updates/2008/Update72_data.htm#table13

[german_reader]

@anne,bakho,

here is a link to the U.S. Environmental Protection Agency for fuel economy.

http://www.epa.gov/otaq/fetrends.htm

They write that the average fuel economy of new light-duty vehicles (cars, minivans, sport utility vehicles, and pickup trucks) for 2006/2007 was 20.2 mpg. The average fuel economy of light-duty cars here in Germany was 30.8 mpg in 2005, and some countries such as France, Italy or Spain, where smaller cars are more popular, could have even higher fuel efficiency.

As a first step to more fuel efficiency the U.S. could change to already existing technology. That wouldn't be cheap, but at least it would be easier than developing new technology. And Ford or GM are building and developing good, solid and fuel efficient cars here in Europe. It should be possible to transfer the technology to the U.S. without too much expenditures.

In the medium or long run 30 mpg is much too much. We need cars with 120 or 240 mpg for a sustainable traffic system. And that's a long way to go. And it won't be easy.

On the other hand high energy prices could have a positive impact on domestic jobs and incomes on another field. Even the conservative, globalization friendly newspapers here in Germany now discuss the question, if high energy prices are eating up the cost advantages of globalization. Relocating productions to places thousands of miles away becomes less and less attractive. Add in the steeply rising wages in many developing countries and a workforce, which will drastically shrink in the coming decades in China, Russia and the rest of Eastern Europe, and we will perhaps see a partial rewinding of globalization.

Every downside has an upside.

[anne]

Also, even understanding relatively little of "peak oil" generally because much of national exploration, development and production is so masked, paying attention to data from known operations in Indonesia and the North Sea and Alaska should at least give as pause.

I am told by a physicist that as with carbon capture from coal burning, oil shale field production beyond what should already be ample public subsidies and private ownership of shale deposits is quite a few years away. Technology is not simply "there."

[save_the_rustbelt]

American companies will probably stop ordering Chinese made steel, the shipping is too expensive.

New high efficient American steel plants will pick up the slack.

In every dark cloud is a silver lining.

This may also save the US auto parts industry.

[rich]

I too blame Republican ideology. But for different reasons.

1. Borrow & Spend policies which have created huge budget deficits and debt. This has caused the decline in the value of the dollar.

2. War. Iraq. Bellicosity re: Iran, Venezuela. And fear of more terrorist actions (caused largely by blowback from Republican and American-exceptionalist policies) that would further disrupt the oil supply.

I believe that these two factors are responsible for AT LEAST 60 % of the current price of oil. Or at least 80 of the $ 140 per barrel.

Incidentally, to the extent that "speculation" plays into the price of oil it is caused by expectations that the above two things will continue (and insufficient margins).

By the way, anybody remember in Jan 07 when oil dropped from mid-60's to 50ish. During the "State of the Union" GWB took care of that. Within 2 weeks oil was back to the upper 60's and has been going up ever since.

[Richard H. Serlin]

A few comments on the comments:

1) There were some Democrats who opposed raising mileage standards and other conservation measures, but that doesn't mean the blame is equal. Equal means equal, the same amount, but it wasn't the same amount. There were a lot more Republicans who voted against these measures than Democrats, and unlike with the Democrats, opposing these measures was an integral part of the Republican ideology and platform.

2) It's not that the free market won't spend any money on alternative energy, fuel efficiency, and conservation, it's that because of great externalities and other market problems, it will spend far less than the most efficient amount. I can't explain externalities and market problems in this short a space, but they are explained in most first year economics texts and almost all intermediate texts. Wikipedia also has a nice entry on externalities.

Mostly free markets with some smart government role are, in general, with rare exceptions, extremely efficient, far more efficient than command, or pure, or mostly pure, government production. But it's very rare that pure free markets, with no government role at all, not even anti-trust enforcement, is most efficient.

3) All of the blame, or reasons, for high oil prices don't fall on the Republicans. There's increased demand from India and China, lobbying from the auto and oil companies, etc. But still, a lot of the blame does deservedly go to the Republicans. This may sound political, but it's an important truth that should be made known, especially in this election year if we don't want to have more of the same.

[anne]

Nonetheless, the essay could use, really use, a specific, like, well, data. Also, when I am told about space not allowing this or that explanation while there is no specific reference I am not all that impressed.

"And, of course, it wouldn't hurt that this would have starved the terrorists...."

This too is a bit much.

"And, of course, it wouldn't hurt that this would have quickened the return of Jesus...."

Oops.

[anne]

And, I actually agree with the essay. If I had my grandfather's nerve, I would slap an "I am the light and the way" bumper sticker on my (red) Prius. Spunk alone isn't enough for that, though.

[Richard H. Serlin]

If I might add:

4) One commenter had done back of the envelope calculations on the impact on oil demand if mileage standards had been increased to 30 mpg, and concluded that the effect would not be that great, but that's only looking at the effect from U.S. demand. With the size of the U.S. market, when the U.S. raises mileage standards, auto companies increase the mileage for models sold all over the world, as due to large economies of scale, many models are sold globally without major changes.

More importantly though, Republicans, and their ideology, have for the most part controlled government for 28 years. That's a very long time. Had Democrats had a great deal of control for those 28 years, I'm confident that we would have mileage standards today a lot higher than 30 mpg. A period as long as 28 years of steady raises would have gotten us a lot higher than that. But, in addition, it's important not to forget that there would have been 28 years of increases in conservation in many other areas, and many, many billions of extra dollars spent on alternative energy research and development (instead of tax cuts for the wealthy. If you argue incorrectly this would have hurt the economy, I have more homework for you. Please look up income and substitution effects and the backward bending labor supply curve in any first year microeconomics book and have a look at Cornell economist Robert Frank's New York Times Economic Scene article, "In the Real World of Work and Wages, Trickle-Down Theories Don’t Hold Up" at: http://www.nytimes.com/2007/04/12/business/12scene.html?_r=1&oref=slogin).

From that substantial extra effort over 28 years, we easily might have had, among other things, plug-in hybrids today with effective mileage in the hundreds.

[Robert Waldmann]

Larry your comparison makes no sense. The reason is that the effect of Cafe would depend on the milage standard. Requiring the kind of average milage residents of Europe get would reduce US oil demand by ... I'll google (time now 3:47 pm here)

This is an edf pdf but it says that "morover a focus on auto efficiency has been effective historically with a net 33 percent reduction in fuel use per mile yielding nearly 3 million barrels per day of oil savings." From context this seems to be US.

http://www.edf.org/documents/3115_OilDemand.pdf

OK drilling

ANWR

1.45 million barrels a day in 2028

http://mediamatters.org/items/200806180007

Off shore

The 574 million acres of federal coastal water that are off-limits are believed to hold nearly 18 billion barrels of undiscovered, recoverable oil.

http://www.foxnews.com/story/0,2933,368221,00.html

That would be equivalent to 6000 days of fuel efficiency improvement so far spread out over who knows how long. The ANWR number is the peak, not the average over so long as we drive cars.

Now possible future fuel efficiency gains which seem reasonable to me would be to get the US fleet like European cars. That means (see below) doubling economy standards so a gain equal to that so far (1 to 2/3 is like 2/3 to 1/3). However, as population and miles driven increase (miles per capita too I'd bet) the gain from economy grows.

The numbers are roughly similar only if you count peak ANWR production as average ANWR production and equate oil which has not been found or extracted with existing technology.

A fair comparison would be feasible cafe standards vs feasible oil drilling. and 60 miles per gallon are certainly feasible (that's what a Prius gets).

More importantly, if we don't drill in ANWR we will have the oil in ANWR. That is banning drilling now leaves open the optino of drilling later. Burning gas now does not leave the option of unburning it later. Only if you adopt an outlook which is both short term and "what if" are they comparable.

Given choices to date, ANWR and off shore won't help us for decades, then they will help us for decades, then the oil will be gone.

Below some quotes and links on what I think is easily doable by imitating Europe and getting rid of light trucks.

"The average combined MPG for all US cars and light trucks on the road today is 19.8 MPG. (Source: 2005 Highway Statistics from the U.S. Department of Transportation, Federal Highway Division)." http://www.google.org/recharge/dashboard/calculator#note1

Some mess with calculations from this

http://news.thomasnet.com/IMT/archives/2007/04/start_engines_for_big_prize_green_future_automotive_x-prize.html

European cars today average around 163 grams per kilometer, and the European Union is already shooting for a target of 130 grams per kilometer across all cars by 2012. In today’s mainstream market, the greenest cars achieve something like 28 kilometers per liter (65 mpg) and 100-120 grams of carbon per kilometer, says Nature.

65 mgp/1.6 > 40 mpg

So going from US mix of cars and light trucks to European cars, which seems feasible to me, would double mileage.

time now 4:13 pm elapsed time (including writing and believe it or not thinking) 26 minutes.
Use the google.

[For some reason, Typepad put a hold on this comment - I just noticed - Mark Thoma]

[anne]

Thank you Richard Serlin and German Reader and Robert Waldmann.

[John V]

Richard Serlin,

Some non-politically motivated comments on your comments on the comments:

You talk a lot about increasing gas mileage. But quite honestly, I really don't see that as a panacea or even very helpful to say the least. Better gas mileage will simply get people to drive more. High gas prices get people to eventually make different choices...like driving less. Your ideas seem to imply some claim to probable results without wondering what different stimuli will do to people's behavior on gas usage. Better gas mileage may lessen gas use but not an amount anywhere near equal to the difference in average gas mileage. Besides, less than half of all oil goes into passenger cars...which makes your debatable connection between between better gas mileage and significantly lower gas use even less significant....even if there were more truth to it than there really is.

On the political side, which I value far less in terms of results than you do, Dems were also in control of Congress more of that time and had the white house for 8 of them. And, if we bump that to 32 years (nice choice on 28, BTW), they've held the WH for 12.

Moreover, in terms of government, one could also argue that oil production would have been higher right now had it not been for various measures and laws that curtailed future oil production.

But, if we are to get political about all this, my basic take is that government short-sightedness led to many policies, subsidies and interventions and influences that have greatly distorted the markets for energy for the last half-century. It's not surprising since a collection of people, D and R, with their own incentives and limited knowledge could not possibly have made the wisest and most prudent choices over that time. Doing so would have been bad for elections.

[anne]

http://angryarab.blogspot.com/2008/05/i-was-visiting-my-local-toyota-dealer.html

May 28, 2008

"I was visiting my local Toyota dealer in Bethesda, Md., last week to trade in one hybrid car for another." * Oh, really? So what do you want from me? A blender? You need a reward because you are driving a hybrid? Do you want poor people to buy hybrids too even if they can't afford it? And how did that pie-in-your-face taste? Was it creamy enough for you? When I read Thomas Friedman writing about energy and conservation I get a strong urge to waste energy. I get a strong urge to cut down trees and to turn on all lights in the house, and to operate my blender on gasoline....

* http://www.nytimes.com/2008/05/28/opinion/28friedman.html

-- As'ad AbuKhalil

['m sorry.]

[Betsy L. Angert]

Dearest degustibus . . .

For the most part, my thought exactly. Why bicker as to who did what. We are all culpable as we happily consume energy that destroys the natural balance.

Today, I stood on the Peace Corner in vigil and a young man drove by and asked me to remember September 11, 2001. I said I did and that is why I work for global harmony. He shouted back, "They started it!" A few more choice words were offered before he sped off. I did not have time to share as my Grandpop had. "Two wrongs do not make a right."

As for the electric automobile, for me, the grid possibly produces more global warming than our awful vehicles do. Even if one demand is not greater, I do not think more stress on the current energy grid is wise. The ways we create power, currently, all leave much to be desired.

Nuclear waste has a life and inherent danger that I think may do greater damage. While I may not be certain of the solution, I would prefer we explore as we never have and invest in what we dismissed well over a century ago.

In 1889, Mond and his assistant Carl Langer described their experiments with a hydrogen-oxygen fuel cell that attained 6 amps per square foot (measuring the surface area of the electrode) at 0.73 volts.

What could we have done in all the years we focused on fossil fuels? Might we have expanded the research on a more viable, environmentally safe source of energy>? Oh, how I wish . . .

Like electricity, hydrogen is an energy carrier and must be produced from another substance. Hydrogen is not widely used today but it has great potential as an energy carrier in the future. Hydrogen can be produced from a variety of resources (water, fossil fuels, biomass) and is a byproduct of other chemical processes. Unlike electricity, large quantities of hydrogen can be easily stored to be used in the future. Hydrogen can also be used in places where it’s hard to use electricity. Hydrogen can store the energy until it’s needed and can be moved to where it’s needed. . . .

About 7.8 million metric tonnes (17.2 billion pounds) of hydrogen are produced in the United States today, enough to power 20-30 million cars or 5-8 million homes. Nearly all of this hydrogen is used by industry in refining, treating metals, and processing foods. Most of this hydrogen is produced in just three states: California, Louisiana, and Texas.

The National Aeronautics and Space Administration (NASA) is the primary user of hydrogen as an energy fuel; it has used hydrogen for years in the space program. Liquid hydrogen fuel lifts the space shuttle into orbit. Hydrogen batteries—called fuel cells—power the shuttle’s electrical systems. The only by-product is pure water, which the crew uses as drinking water.

Hydrogen fuel cells (batteries) make electricity. They are very efficient, but expensive to build. Small fuel cells can power electric cars. Large fuel cells can provide electricity in out of the way places with no power lines.

Because of the high cost to build fuel cells, large hydrogen power plants won't be built for a while. However, fuel cells are being used in some places as a source of emergency power to hospitals and to wilderness locations. Portable fuel cells are being sold to provide longer power for laptop computers, cell phones, and military applications.

Economists certainly understand if we invest in a technology, initially, the cost will be high. As we perfect the process and demand increases, prices will plunge. Rather than rant and rage about Republicans, let us realize Democrats did not do what they might have. We are one. United we will stand.

Today, I learned for the first time in human history, ice may disappear entirely from the North Pole this year. I inquire; will we continue to claim it is the fault of the Grand Old Party? I hope not.

Betsy L. Angert
BeThink.org

[Betsy L. Angert]

Dearest anne . . .

The bubble I hope bursts is not related to the price of petroleum. I say, "Let it rise sky high!" If the cost is not out of reach worldwide, people comfortable and cozy in gas-guzzling cars will continue to consume.

As I shared yesterday, Americans and now people throughout the planet consume food and fuel in similar manners.

Citizens in this country and sadly, even abroad eat cheap food, fast and feverishly. The nutritious value of the fodder is void. Sugars, salts, starches, high fructose corn syrup, trans fatty acids fill our stomachs. Plaque coats our arteries. Diabetes is epidemic, as is obesity. Americans are killing themselves without a care. Then we complain. We are sick, tired, and health care costs are high. Perhaps because the demand cannot keep up with the ample supply of illness.

The same people who stuff their stomachs, Americans pour petroleum into gas tanks. The energy grid gobbles up natural resources. Our toys and tangibles belch out pollutants. The rivers rot. Oceans warm. The ozone layer is torn. Icebergs melt and millions of species have disappeared from the face of the Earth.
Ice Shelf Shifts. Bee Colonies Collapse. Bats Perish. Mother Earth Tortured.

Today, reports tell us for the first time in human history, ice may disappear entirely from the North Pole this year. I inquire; will we continue to claim it is the fault of the Grand Old Party? I hope not.

Yet, lawmakers and oil moneyed moguls say Let Them Eat Oil. The people say, "Yes! Feed our hunger and do it cheaply." Damn the Earth. Let us drive until all life dies, Full speed ahead!

Please also refer to my earlier comment. If we plug into the electric grid as it exists today are we truly creating a healthy planet.

Betsy L. Angert
BeThink.org

[bakho]

I think the blame for our current situation falls squarely on Big Oil. Big Oil is the one funding the think tanks. Big Oil is the one funding the Republicans and some Dems. Big Oil is the one advertising on TV. Big Oil has been buying the policy it wants. Big Oil wants high demand because it allows them to make obscene profits.

The Republicans are to blame for being the party of the K-Street special interests. Bush and Cheney have done nothing to improve fuel efficiency or conservation because it is not in the interest of their Big Oil sugar daddies. They don't care if high oil demand is bad for consumers, bad for our economy or bad for our environment. Their governance model is to provide favors to special interests in return for political contributions that allow them maintain power by running negative TV ads to trash their opponents.

Big Oil gives Big Advertising dollars to our TV media. Think TV will bite the hand that feeds it? The last 28 years have been a government of the special interests, by the special interests and for the special interests. Big Oil is using its obscene profits to pollute our energy policy.

BTW Richard- I think a 25% reduction of gasoline use in the US would be a huge deal in the short term and affect the short term price. A 2-3% reduction in world oil demand would go a long bringing some competition back into oil pricing. A similar reduction in US oil demand between 1978 and 1983 broke the ability of OPEC to set pricing. It would work the same way today.

Short term efficiency improvements would buy time to restructure our transportation sector to improve system wide efficiency. In order to do this, we will have to fight Big Oil and the politicians they routinely buy.

[bakho]

Anne:
Basic Oil statistics from EIA

http://www.eia.doe.gov/basics/quickoil.html

Not sure I got your point about drop in Ag productivity? That is certainly not the case in the US.

[310]

The European model hasn't fared any better. They pay close to 10 E now, or somewhere close. Seems like to increase taxes on petrol will simply drive the price to European levels. I trust private companies like Exxon, BP, to do a better job of investing in energy alternatives than US G. The G hasn't done much right over the past 8 years many agree on that - why empower the G? Furthermore, Exxon, BP execs must find solutions or they won't be there much longer.

[GoatGuy]

Blaming "partisan" politics is pointless. If the problem is viewed as "Americans are wasteful in their consumption of vehicular fuels", and the observation is, "using vehicles that use inefficient, oversized, bloated engines", along with "which government could have mandated away from" ... then I think it should rest directly on the shoulders of the citizenry for their quandry. WE bought the cars, WE decided we needed SUVs when in a prior era, a shitty tin-can Camry station wagon could have easily carried the kids and their junk to and from home, school, kung-fu, soccer, baseball games, Wallmart, Costco, church, birthday parties, the Malls and the dentists. Shoot, except for a few hardship cases, all that transportation could have been done in 3-door death traps.

The problem is, that the financial incentive wasn't there, and now we're caught up in it. Certainly it wasn't partisan wrangling that made SUVs ostentatiously excessive. It wasn't a fault of the Republicans that mileage standards for all those Tanks actually rose inexorably from 1980 to 2005. (Most new urban assault vehicles in the Mommy Class get 22MPG+ today, whereas in 1980, they were lucky to see 15 MPG.)

The Government in 1973/1977 implemented a stern sounding belt-tightening CAFE standards plan. Had great support for it (which it didn't need, because fuel prices of the day made it painfully obvious NOT to buy a gas-guzzler), was high as long as fuel prices were high. But then fuel dropped, and although the standards were in place, exemptions were found that allowed SUVs and other MegaMonsters to be cast outside the system. And Ma and Pa Kettle snapped them up: after all, they are UTILITY vehicles in an era of much more optional-and-necessary commuting.

And don't expect our representatives to do much better for us by way of mandate, punitive taxation or aggressive investment tax-credits. They're the referees at a particularly invictive game of Soccer: when they (rightfully) float the idea of ADDITIONAL taxes of motor fuels, they're shot down. How absurd! Well, it isn't: to "solve" the problem requires investing monies in alternatives. Likewise, if they mandate tax cuts, they're roundly reviled ... where are the expenditures going to come from that WILL address the problem? So they tend to tilt at windmills, blame zephyers and the self-styled "Current Administration" for all their woes.

Some of the economists here have said it best: the elasticity-of-demand for oil right now is so far removed from stability that the oil producing countries have been able to increase the price of Crude to a level never reasonably envisioned. Yet, demand remains. People need to get to work, get to the store, do all the things in life that have come to be "expected". Likewise, people have come to expect bananas, tomatoes, strawberries, a zillion types of goods and products on their store shelves, year around - which takes considerable liquid fuel to ship things around. We are loathe to walk when the car sits idle at the curb, we are loathe to take a train when an airplane is going the same way for about the same price.

The only way to change that - is by aggressive taxation and redeployment of the taxt monies into sustainable energy production, management, storage, distribution, delivery and conservation technologies. By way of carrot and stick, directed rebates + general taxation.

Which isn't a partisan issue at all. Just a societal one.

GoatGuy

[Patricia Shannon]

Jim says...

Is there any evidence that the private sector has underinvested in alternative energy? When gas prices go up, you will get more research in alternatives, as you will now. That's how it's supposed to work.

If you want to argue that taxes are not high enough to deal with the externalities, that's one thing, that is a legitimate market failure argument. But this market-bashing is just as "mindless" as the people the author doesn't like. Comparing some idealized, perfectly timed government investment is not helpful.

The problem with blind faith in "the market" is that it only reacts to problems once they become severe, even when the problems have been foretold long before.

Certainly, we won't get "some idealized, perfectly timed government investment" action either, but blocking realistic government action because it contradicts the ideology of the perfectly acting market hasn't had very good results. In the case of the environment, it has had very bad results.

[Patricia Shannon]

I do see value in considering the evidence that one political party makes choices that are harmful to our country and world, much more often than the other party, because the U.S. is (supposed to be) a democracy. If we ignore the differences between the two major parties, how can we make a better choice for the future?

If we have to choose between two individuals for a job position, marital partner, ride home from a party, etc., we would be foolish to ignore large differences in their past behavior.