Gotta Have The Cap!

I highly recommend Dave Roberts' comments on Nordhaus and Shellinger's critique of the environmental movement. I'm not so deeply immersed in that world as to have a particularly sophisticated take on all this, but I'm pleased to see that I agree with Roberts, and as such, feel much safer about my opinion.

In short, N&S argue that the environmental movement is too pessimistic, and too focused on solutions that require pain, like a carbon tax. What we need is more happy talk, and more public investment in disruptive -- which is to say, visionary -- energy research. In its weak form, this argument is right, but banal. Indeed, we're already getting a lot of that talk about the green economy, and the Apollo Alliance, and all the rest. In its strong form, it's wrong and dangerous. Public investment is great. But if you offer folks the easy, but insufficient, solution, and stop talking about the harder, but more necessary, steps, what you'll get is the easy, painless solution. And not only is a well-conducted public investment program likely to prove insufficient, but it's not likely to exist at all. Roberts explains:

In practice, "alternative energy" subsidies have overwhelmingly gone to things like corn ethanol, nuclear energy, "clean coal," and hydrogen; the way things are going we can expect liquid coal to hop on the bandwagon as well.

Those are not the investments I'd make, but I don't get to decide. Neither does Greenpeace or NRDC; neither do S&N. Congress decides, and Congress is heavily subject to the very power dynamics that have kept fossil fuels on top for so long. Perhaps green groups know this, and know that a massive push for public investment would likely be co-opted in ways that do more harm than good. Even a Congress acting in good faith is unlikely to prove particularly adept at selecting the technologies that will "break through."

Targeted subsidies are simply too easily converted into pork. It's one of those times when government failure likely exceeds market failure. And, in any case, you're going to get them one way or the other. But in the context of a larger bill, they can play an important role, becoming the pork which'll help grease a cap-and-trade plan so it can slip through Congress. Enact the subsidies on their own and you'll get nothing -- neither a really good public investment program, nor a carbon limit. They need to be part of the overall bill. But at the end of the day, everyone knows what the center of the policy agenda is, and you're not going to fool business into overlooking the carbon cap by talking about the subsidy program. Try, and you're liable to lose the cap, as business repurposes your rhetoric to argue that the subsidies are sufficient, and should be tried first.

The UN Conference on Global Warming: Pre-Thoughts

I'm in New York for a week of multilateralism and do-goodery. Multilateralism in the form of a UN meeting on climate change today, and do-goodery as demonstrated by the Clinton Global Initiative. Night One was a dinner with some UN Climate Change folks who wanted to Meet The Bloggers.

Sadly, meeting the bloggers involved a lot of asking what a blog is and isn't, and whether we check facts, and how we differ from an op-ed page, and a lot of other conversational avenues that I thought were exhausted in early-2005. Dinner sort of hummed along in this agreeable-but-dull fashion till one of the UN types shattered the comity by angrily saying that none of us had asked passionate questions about climate change yet, and didn't we understand this would kill us all and it mattered!? And we did! What we hadn't been convinced of was that anything going on here mattered.

Here's the problem: When it comes to pressuring major nations to undertake policy initiatives they're not favorably disposed towards, the UN is rather toothless. It can quietly persuade or publicly shame. Up till now, it has sought quiet persuasion, with little to no effect on the behavior of America, China, or India. It has not sent Secretary Moon to forthrightly blast our apparent indifference, and the consequences our shortsighted sluggishness will have on the rest of the world. This is not something the UN feels able to do.

There is value, of course, in the UN's role as a neutral platform for the hashing out of international affairs, but the value in amassing that credibility is also that it can occasionally be used. It is often used, of course, against smaller, weaker nations. It is not used against the institution's more powerful patrons, like the US. And without a radical change on that front, there is little the UN can do on climate change, save signal its willingness to serve as a procedural host when the day comes that the relevant countries decide to take action.

In that respect, laying groundwork with other nations may indeed serve as a useful accelerant on the day when President Clinton/Obama/Edwards/Dodd/Richardson takes office and decides to reverse American policy on climate change. As an official sitting near Matt explained, smaller countries don't have the technical capacity to move rapidly forward with action plans and carbon analyses. Getting that work underway during this lull is actually quite useful. But it relies entirely on an internal transformation in American politics -- it doesn't really hold hope for hastening such an evolution.

But the UN is not alone in this slightly bizarre unwillingness to exert real leverage. Western Europe says it believes the science on global warming. The science on global warming suggests that the effects of global warming will be nothing less than catastrophic for Western Europe. Given that, it's genuinely surprising to me that countries like France, the UK, Germany, and so forth haven't banded together to exert real pressure on America, China, and India.

You'd think this would be an area in which the EU both could, but more importantly should, act with a singularity of purpose and flex its aggregate might. If it doesn't, the consequences will be devastating. And yet there's no real evidence that the EU is ready to rely on anything save rhetoric -- no sanctions, no threats of sanctions, no preferred trading deal to countries willing to moderate carbon output....nothing. Meanwhile, Sarkozy's threatening to bomb Iran if it goes nuclear, despite the fact that a nuclear Iran is, whatever else you think about it, of relatively little danger to France, while warming poses a tremendous threat. The whole thing is weird, and demonstrates a rather worrying distance between the emphasis various countries and institutions say they're putting on climate change, and how much political capital they're really willing to risk to arrest the planet's carbon output.

Brian has further thoughts here. And I'll be blogging all through the meetings today.

The Bill Bradley Plus Coalition

by Nicholas Beaudrot of Electoral Math

In 2000, fomer Sen. Bill Bradley (D-NJ) gave Al Gore something of a scare with his 47-51 near-win in the New Hampshire primary. But seasoned political observers understood that Bradley would have a hard time competing in South Carolina, Wisconsin, and so forth. Why? Exit polls showed that Bradley could only muster a majority among liberals, voters with college degrees, and households earning more than $100,000 a year. That wasn't even enough to win a low turnout primary, even in a state with lots of affluent, socially-liberal Democrats. As the Democratic primaries moved to areas with more working class and culturally moderate/conservative voters, Bradley's fortunes would just get worse.

Which brings us to Ned Lamont.

Based on the exit polls, Lamont's victory represents an incremental expansion of Bill Bradley's coalition. While Bradley was only able to earn the votes of 45% of voters earning less than $50K/year, Lamont managed to pick up 48%. In the middle of the spectrum, Lamont's 53% majority outpaced Bradley by four percent. Both candidates earned the same marks from households earning $100,000 or more (the exit poll shows Bradley with 49% of the vote, so it's off by a hair), so improvements among working class and middle class voters represent the margin of victory. The educational profile tells the same story. Lamont actually fared five points worse than Bradley among high school dropouts, but earned a majority of those with "some college" education—a two-year degree, or perhaps a year or two at a four year school.

So, yes, Matt, Tom Edsall is a bit off the mark here. Lamont's victory depended just as much on fighting to a draw among those earning six figures as it did on the small advantage he had with "the elite".

This "Bill Bradley Plus" coalition that pushed Lamont to victory is essentially the coalition laid out in The Emerging Democratic Majority—labor, minorities, white liberals, and upper-middle class professionals. Over the past three or four decades, workers in sectors like nursing, engineering, and financial services have grown in number and become more and more Democratic. Essentially, these professionals will replace farmers and the shrinking labor base as the third leg of the Democratic Coalition. Tuesday was perhaps the first time they were large enough in number to impact an election (Tim Kaine's victory in Virginia might have done the trick as well).

Now, before we get to excited over the prospects of this coalition, keep in mind that it's only strong enough to win a Democratic primary in Connecticut against an incumbent with lots of baggage. And if more working class constituents are displaced, it's not clear to me that bread-and-butter economic issues will keep their salience within the Party. But maybe—just maybe—Lamont's appeal in the general election will push more former Republican voters into the (D) column.

Global Warming vs. Global Awareness

by Nicholas Beaudrot of Electoral Math

An Inconvenient Truth is almost certainly worth seeing, even if you're alreay a dyed-in-the-wool supporter of the Kyoto protocol. Matt Yglesias gets the movie's impact more or less right: "issue films" like this one will only cause political change if they fundamentally alter the current political landscape, by pushing the issue to the forefront such that political pain comes to any candidate who doesn't take global warming seriously. Whether Al Gore's vehicle can propel climate change to the top of the issue pile all on its own is unclear. To reach tens of millions of viewers, Truth will have to find its way into full-scale release in thousands of theaters across the cuntry; it's currently slated to reach about 300 theaters by the end of June.

There's A Word For This...

Man, I don't know what it is with this President. It's just like flip:

In 2001, Vice President Dick Cheney said, "Conservation may be a sign of personal virtue, but it cannot be the basis of a sound energy policy." Also that year, Ari Fleischer, then Mr. Bush's press secretary, responded to a question about reducing American energy consumption by saying "that's a big no."

"The president believes that it's an American way of life," Mr. Fleischer said.

And flop:

With fears mounting that high energy costs will crimp economic growth, President Bush called on Americans yesterday to conserve gasoline by driving less. He also issued a directive for all federal agencies to cut their own energy use and to encourage employees to use public transportation.

"We can all pitch in," Mr. Bush said. "People just need to recognize that the storms have caused disruption," he added, and that if Americans are able to avoid going "on a trip that's not essential, that would be helpful."

Nice to see him end up on the right side, at least. Now, if the no-pain President could cajole his corporate sponsors into letting him raise CAFE standards, I might even register an uptick of respect for the guy.

Three Objections

Matt's got a TAP column today laying out his objections to CAFE standards. Readers will be unsurprised to know I find it unconvincing. But who knows -- I may be wrong. So here are three objections for the gas tax, and maybe if advocated could answer there, I could better understand their case:

• Matt writes: "CAFE rules are, in effect, a tax on gas-guzzlers that's used to subsidize buyers for the purchase of more efficient cars. Companies meet the standards by offering a discount on their more efficient models and by charging higher prices than they otherwise would on less efficient models." Okay. What's wrong with that? Is there some reason we want gas-guzzlers on the road?

• Matt argues that "[a] much better way of reducing consumption would just be to tax it straightforwardly with higher gasoline taxes." He then, to eliminate the regressivity, advocates plowing the savings into a progressive tax cut, or end of the year rebates or something.

Why does anyone think this will pass? And, if we take the progressive step and pound in that you'll somehow get the money back, why do we think it'll change behavior? But really, the question here is what possible convergence of circumstances makes a nation furious at high gas prices agree to pay even more at the pump?

• "Some families share one automobile; others have one for each parent and one for each teenager. To put it in crude, self-interested terms, some Americans -- like, say, me -- don't own a car at all. We're the true heroes of energy efficiency, and CAFE rules provide us with no benefits whatsoever. But if you want to subsidize energy conservation, it makes no sense to leave out people who conserve through not driving or carpooling."

Actually, it does. Matt doesn't use the subway because he's virtuous, he does it because he's got a subway to take. If he lived in LA, he'd have a car. I live in LA. I have, and need, a car. In a month, I'll live in DC. I'm not sure I'll take my car. In any case, I'll mostly use the subway. Not because I'm more virtuous there than here, but because the subway makes sense there and is effectively nonexistent here. What Matt's suggesting amounts to a subsidy for urbanites because driving, for most people, isn't a choice, it's decided by geography.

My grandparents used to live in Basking Ridge, NJ. The market was 8 miles away, the hairdresser 15, work 12, and so forth. They weren't doing anything wrong by driving -- it's just what they had to do. The commercial areas were quite separated from the residential communities. If you do blue collar work in Irvine or Newport Beach, you have to live in Garden Grove or Fountain Valley. You simply have to drive -- there's no other viable option. And is it really fair to subsidize the rich guy who can live near his employer or the urbanite who can take the subway and instead penalize someone who hasn't the money to rent near his work? Why?

Most of this country has a car culture. It's not a moral decision, it's a simple question of where you can afford to live and where your job/kids/life requires you to go. And those who drive more are not morally equivalent to those who drive frivolously -- a commute to work so you can own a house is different than a road trip to TJ. If you could somehow separate those two out with a gas tax, maybe you'd have a case, but until you can, attacking the commuter is another way of saying "I no longer want this congressional seat and I'd be very appreciative if you gave it to someone else."

Lastly, Matt's right on about the SUV/light truck distinction -- the creep of trucks and SUV's into everyday vehicles has wreaked havoc on the rules. But a serious reworking of CAFE standards could easily address that. And while reworking CAFE won't be easy, right now it's got the popular will behind it and, in any case, is infinitely simpler than convincing Americans that the right response to skyrocketing gas prices is a government tax which'll jack up what they pay at the pump.

Gas Tax vs. Cafe Standards

There's been a lot of CAFE bashing lately, and much of it, I fear, is a bit misguided.  Brad Plumer (who I don't mean to single out, he's just the most recent) joins in with a post blasting CAFE in favor of a gas tax, maybe with some means-tested rebates to ease up on the regressivity of it.  A few things:

• First, gas taxes are a very direct way of influencing fuel consumption, but it's not clear that, at attainable rates, they actually do influence fuel consumption.  Raising the tax by the small, incremental amounts that could (and by could, I mean in a hypothetical world where this was somehow a viable policy option) pass would likely do little to stem consumption.  That's because, as it turns out, gas hasn't even been near the top price folks are willing to pay.  Most simply bear the burden, preferring to pay more rather than disrupt their lifestyle.  The place gas taxes make a difference is, in the end, among the poor, but if we put in rebates like Brad is suggesting, it won't affect them all.  I'd like to have a gas tax because I'm all for the added revenue, but it's not going to do much against consumption.  If you can afford an Expedition, you can nearly always afford more at the pump.

• Gas taxes, unlike CAFE increases, are basically impossible to pass.  Particularly now.  It's one thing to sneak in a gas tax when fuel is cheap, but convincing Americans of it when they're demanding a drop in gas prices is not, I think, a sound recipe for political survival.  It just won't happen.

• On the other hand, 93% of Americans support an increase in CAFE standards.  That doesn't make it easy -- the auto industry is a powerful lobby.  But they're going to fight a gas tax too, so I'd rather our politicians be battling back with an overwhelmingly popular proposal rather than running into industry opposition while carrying a bill Americans will stone them for passing.

• The beauty of CAFE increases is that they're an action-neutral fix.  Gas taxes requires a high enough price that Americans start driving less in order to conserve.  So you need to jack up the price till filling up becomes so economically painful it actually changes the behavior of Americans.  Demand an increase in CAFE standards and, no matter what happens, the country will use less gas.  It's highly unlikely that everyone will decide their newer, more efficient car requires them to take a road trip.And it's not as if this is a serious hardship on the auto industry -- the technology is there, they've just been pushing it into more powerful cares rather than more efficient ones.  We can change that, and it's be good for the country if we did.

• Brad uses an analogy to make his point: the Smiths have a little, efficient wiener car they drive everywhere and the Browns have a wasteful SUV but they conserve fuel and bike to work.  Brad argues that we want to penalize the Smiths, not the Browns.  Why?  Why should we penalize anyone?  If we force a serious increase in CAFE standards, neither the Smiths nor the Browns feel the hurt, but both end up using less gas.  And if, later, peak oil comes quick enough that we need a gas tax, we can implement one.  But for now, why not achieve the goal -- lower total oil consumption -- through a non-punitive, broadly popular measure?  Why isn't this a no-brainer?

Oil Baby

Fareed Zakaria has a spot-on editorial today on how much tougher oil makes our foreign policy. It's almost laughable how many sore spots and tricky situations our hydrocarbon dependence has landed us in. In the American drama, oil is the screenwriter and we're the hapless dunce who keeps stumbling into his prewritten traps.

It kinda sucks.

But it's not hard to rationalize that oil dependence was a necessary tradeoff for our modern influence and technological achievement. That's perfectly fair. What's so strange is that now, while we're on the cusp of new technologies that could end our addiction, while we control literally thousands of advances and options that could drastically reduce our dependence, we prefer instead to wait till crisis hits, till prices jump so high that oil becomes a curse and change becomes a necessity. We're demanding that the day come when our switchover will be instant rather than gradual, and that's going to hurt.

Some hyperrationalists on both sides of the aisle like to refer to market mechanisms now. When oil ceases to make economic sense, we'll cease to use it. The market will take care of us, tuck us in at night, read us stories, and make us breakfast the next morning. But the market fails. The many costs of oil, from global warming to geopolitical instability, aren't included in the pricetag of crude. And when they do come clear, they still won't get you at the pump. They'll nail us in emergency appropriations for wars and massive outlays to deal with rapid climatological change. We'll have long seen it coming, but the market won't have noticed until it hits. Zakaria's piece today is a good explication of one of those market-hidden prices, oil's irritating ability to prop up most everyone we want knocked down. Read it.

By the way, The Oil Drum, your goto blog for all things crude and peak, has moved. You can, and should, find them here.

Slick Oil

Jamie Court has a good point here:

What's remarkable is that neither leading Democrats nor Republicans are discussing the oil company profiteering behind the jump at the pump? Maybe that's because both parties are feeding at the same well of campaign contributions and the federal energy bill that gushed from it failed to deal with the cause of the sky high prices.

July financial statements show oil companies making new world record profits on top of last year’s banner world record profits. Exxon Mobil’s second quarter earnings jumped 35 percent over last year, Royal Dutch Shell rose 34%, ConocoPhillips shots up 51%.

Poll after poll has shown that Americans are desperately worried over our oil situation. John Kerry's single best-received line was his acceptance speech swipe against the House of Saud -- the numbers spiked up. Maybe that's why, in fear of attracting supporters, he stopped using it. But there's no reason the Democratic Party shouldn't be hitting hard on this subject, particularly as we struggle to come up with a strong national security message that's more than Republican "me-tooism".

Bush and his party are in the pocket of Big Oil. Hell, before they became the government, they were Big Oil. If Democrats were willing to loudly stake out the energy independence territory and use it as a national security message (less reliance on gulf states), it'd be a step in the right direction. That they're so reticent to do so is even more galling, though, when you see how easy Republicans are making it:

The Bush administration is expected to abandon a proposal to extend fuel economy regulations to include Hummer H2's and other huge sport utility vehicles, auto industry and other officials say.
...
Larger sport utility vehicles and pickup trucks weighing more than 8,500 pounds when loaded, like many Hummers and Ford Excursions, have been exempt from the [CAFE] regulations. When the system was created, vehicles of that weight were generally used for commercial purposes, but now hundreds of thousands sold each year are intended for family use.

Automakers have had powerful incentives to produce such vehicles because they are exempt from fuel regulations, have had rich profit margins, and many consumers can claim tax breaks for them. The administration had suggested including larger S.U.V.'s in fuel economy regulations in a first wave of proposals in December 2003, but domestic automakers objected that such a move would harm their fragile bottom lines.

Yes, poor domestic automakers, spent the last few decades making bigger and bigger cars and are now too dependent on their most monstrous models to have them classified in the categories where everyone knows they fit. But I'm glad to know the Bushies haven't lost all their compassion and goodwill. They may not care about workers, the poor, the uninsured, or the disadvantaged young, but Leaving No Corporation Behind is, if anything, even dearer to their hearts now than it was when they were elected.

Let Us All Give Thanks

Bush's energy bill is headed for passage, and thankfully so.  Save for substantive modernization of our electricity grid, an increase in CAFE standards, an actual stance on global warming, a coherent framework for reducing our oil consumption, a serious investment in natural gas, an actual interest in new technologies for alternative sources, and really anything that'd have any sort of worthwhile impact on our energy situation at all, this bill has just what we need.  Subsidies.  Giveaways.  Handouts.  Protection.  Guidelines.  Bureaucracy.  All sprinkled with liberal amounts of Corporate Love and put on the Senate's desk.

I've long thought the Energy Bill, more so than any other legislation, is the perfect metaphor for the modern GOP, both in substance and process.  The substance of it is a mash of giveaways to Big Business, pork, and policy that makes no sense.  And the process?  Well you'd think they were a bunch of liberal crusaders:

From the start, Bush and GOP lawmakers have sold their energy policies as a means of reducing U.S. dependence on foreign oil. "Our dependence on foreign oil is like a foreign tax on the American dream, and that tax is growing every year," Bush said in May. During the Senate debate on the energy bill last month, Majority Leader Bill Frist (R-Tenn.) said: "We must take steps to reduce our dependence on foreign countries and thereby enhance our energy security at home. When we rely on other nations for more than half our oil supply, we simply put our security at risk."   

Like the Medicare bill, this is a mess corporate cronyism sold using the language of serious progressive reform.  Listening to them, you'd think Jimmy Carter was passing his dream energy legislation.  That the reality has no increase in CAFE standards and was held up for a year while Tom DeLay tried to retroactively protect MTBE manufacturers from lawsuits is too perfect.  This isn't conservatism.  And it's only sold as progressivism.  In reality, it's modern Republicanism distilled, a perfectly pure mixture of incoherence and corruption publicly aimed at solving a serious problem but privately written to ignore the issue in favor of industry demands.

Did Tom DeLay Just Lose a Legislative Battle?

Posted by Nick Beaudrot

CBS News -- which I try to use as a barometer of what non-cable news is covering -- has this story on their gateway page: "Congress Nearing Energy Bill Deal". Let's pause for a moment about the thought of giving oil and natural gas extraction even more tax favored status at a time when Exxon Mobil literally has more money than it knows what to do with.

Now that that's over, let's get to the real news: "House and Senate conferees abandoned giving makers of the gasoline additive MTBE liability protection against environmental lawsuits on Sunday, removing the major roadblock to enactment of broad energy legislation". This is significant, because House Leadership, in the form of DeLay and his collegaue "Smokey" Joe Barton (R-TX) have had a monomaniacal obsession with protecting the poor small-market gasoline manufacturers from the big bad environmental groups. It seems strange for them to give up on their favorite pet rock when they are so close to victory. So are they now secretly plotting to scuttle the whole bill? Or has Tom DeLay just lost for the first time in years?

Smart Subsidies

Yesterday, Matt pointed to a Times article saying that new hybrid technologies were being pumped into the acceleration side of things rather than going to increase fuel efficiency. That's not going on everywhere, sure, but the Accord hybrid and a few others are using the increased power to, well, increase power. This is essentially what happened in the 80's when the advances that had been going to cut fuel consumption were, with Reagan's freeze on CAFTA standards, plowed into engine muscle, at least by American companies. The Japanese kept going for efficiency and, well, you know how that turned out.

Matt uses this as evidence for why we should let the market take care of oil or, if we insist on meddling, have something straight forward like a gas tax. I'm not so sure. As I've said in the past, gas taxes are enormously regressive, hurt those who (for reasons of employment or whatever) can't change their transportation patterns, and will make all manner of good more expensive because they cost more to move and produce, making it double regressive. And this is all in the platonic land where we could actually pass a gas tax.

What the study does show is that subsidies for hybrid purchases are no longer a good idea. So let's not have them. Don't subsidize hybrids. Subsidize fuel efficiency. 30mpg and over gets a small subsidy, 40 gets a larger one, 50 nets you even more cash, and 60 makes you rich. Because, in the end, what we want isn't technology itself, but better fuel efficiency. And we can incentivize that directly.

Unocal in Red

I'm not particularly concerned by the Chinese government's bid (through CNOOC Ltd., which they control 70% of) to buy Unocal. If they offer a better deal than Chevron, why not? Worries that Chinese ownership somehow compromises our national security strike me as way overblown. If we and China ever get to a point where we threaten each other, who owns Unocal and its relatively minor energy assets will be the least of our problems. Moreover, in wartime, business ownership is something less than an inviolable fact of nature. Stateside Unocal assets would be nationalized by America, not allowed to continue production for the hostile Chinese under some bizarre fetishization of property rights.

Further -- and this is really an important point -- we're not going to war with China. They do not threaten our national security. They are not our enemy. Purchases they want to make should not be subjected to a extra level of scrutiny as they are not a hostile, or even threatening, power. America certainly has the right to be annoyed at Chinese monetary policy, but a country attempting to keep their export industry at a comparative advantage is hardly unheard of and shouldn't be seen as a more aggressive move than it is.

China's growing. We all know that. They will be powerful. Many of us fear that. But we, and them, will be in infinitely better shape if we cultivate a constructive and friendly relationship rather than create a self-fulfilling prophecy by treating China as a threatening power. If they want to buy Unocal and are willing to outbid Chevron, more power to them. We want as many nodes of interconnection as we can have in order to ensure the disincentives to future hostility -- on either side -- are as significant as possible.

Corn For Plastic

The nice thing about high oil prices is that they make new technologies more cost-effective. Take Cargill, a company that has figured out how to replace petroleum in manufacturing tasks with corns and biomass, and is suddenly able to do it on the cheap:

When Cargill launched its factory in 2002, its pellets were far more expensive than equivalent material made from oil. Wild Oats Markets, an early customer, paid 50% more for takeout containers made from the bio-plastic.

But over the last two years, the Cargill plant has gotten more efficient — and oil prices have soared.

The result: The "corn-tainers" in the deli now cost Wild Oats 5% less than traditional plastic, Wild Oats spokeswoman Sonja Tuitele said.

Huh. Maybe all our presidential candidates can promise to powercharge this process, thus paying tribute to Iowa's farmers in a non-useless manner. Huzzah!

Why? Me Worry?

This article, detailing the results of a simulation focusing on oil crises, is worth reading for an idea of why people are concerned about peak oil. My excellent guests from the Oil Drum gave you a nice rundown this week, but hearing it from Gene Sperling and former CIA directors James Woolsey and Robert Gates has an authenticity that's hard to match.

Incidentally, what really worries me are the arguments from folks like Tim Lee who seem to think that just because the worst case scenario is unlikely, everything will be fine. Their answer to peak oil is that prices will rise, people will stop using so much oil, and we'll figure out other ways to power our economy. Simple. And like most simple things, it's been thought of.

The reason we're all still worried is that the alternate ways of powering our economy are all far more expensive and the long-term solutions are still decades from technological maturity. Tim quotes a comparison of oil markets with a pistachio-loving kid whose parents give him a room full of pistachios and who, after eating 4 million and realizing that new pistachios are tough to find amid the discarded shells, simply strolls into the kitchen to find a new snack. Anyone who thinks the world's fuel consumption can be easily quenched by a new energy snack is ignorant of the issues involved in replacement fuels. A better comparison is the Irish potato famine. Sure the Irish could eat other things and live, but they didn't have access to nearly enough of those other things to replace the dwindling potato crop.

Moreover, oil is not an isolated commodity. If oil costs $100 a barrel, that makes all transportation more expensive. If transportation is more expensive, there are fewer shopping trips, fewer plane flights, fewer goods shipped, etc. Worse, the goods that do get shipped are more expensive, ticket prices are jacked up, inflation hits just as demand falters (stagflation, you'll surely remember, really roared onto the scene in the aftermath of the 73 oil spike). I don't buy into the Kunstler-esque theories of widespread doom and destruction, but the potential damage to the international economy is really serious.

What makes it all so scary is that we're not dealing with static, or even dropping, US demand. China is charging onto the scene with hundreds of millions of new drivers, same goes for India. Both are developing economies in desperate need of oil and energy. China in particular is willing to deal with everyone who doesn't like us in order to worm in on supply markets we haven't cornered (namely Iran and Venezuela), giving so-called rogue states more autonomy and international pull. So at the same time supplies are tightening, demand is set to supercharge, and there are multiple rich countries ready and able to bid up the price. That's bad economic and geopolitical news however you look at it, but it's much worse if you stare straight into the light.

What a Long Strange Trip It's Going To Be

Prof. Goose here.  Dear Kleinians, you've been great. 

I hope you've seen from my posts that the issue of petroleum's imminent peak of supply matters and will matter more and more to your lives over time. 

I also hope you'll continue learning about this complex topic at the many news sources available (e.g., peakoil.com, energybulletin.net, flyingtalkingdonkey.blogspot.com) or even come by The Oil Drum (and add us to your blogrolls, if you are so inclined...) and pull up a comment box sometime.

Truth be told, I had planned a couple more posts, but we're having blogger problems over at the home base that need my attention.  And, I still have my headache to boot.

So, what I will prepare for you below the fold is a discussion of alternate energy sources and how they will likely not be enough to solve the problems of our dependence on petroleum and its wonderful energy density or EROEI (energy returned on energy invested).

You see, petroleum is the best, safest, and easiest source of energy on the planet.  It takes a lot of energy to make our life as easy as it is.  More than you would think.  The work that gets done by forces other than by muscle power of some animate being takes some source of energy.  This is a fact that we often overlook.

There's a lot of energy sources out there.  Nuclear is probably the next best alternative, but it has accumulated such a stigma in the US (and then there's that pesky "what do we do with the waste" problem) that it's likely we will not see a nookewler plant built in the US until oil gets much more expensive.  NIMBY.  NIMBY.  NIMBY.  And they take a long time to build too.

Many other sources are in their prototype stage.  Developments are being made, yes.  And that's positive.  However, most of them are not scaleable into our economy, and they're nowhere close to being ready.

If this topic interests you and you want to learn more, I have some recommendations.

Green Car Congress
The Energy Blog
Odograph
Emerald City Commentary
Stephen Gloor

If you want to learn more about sustainable development, lifestyles, global warming, and enivronmental alternatives (which we at TOD endorse wholeheartedly)...I would suggest:

Grist
Worldchanging
Treehugger
sustainablog

In closing, what we need to avoid peak oil is (stolen from Matt Savinar):

1.  A few dozen technological breakthroughs,
2.  Unprecedented political will and bipartisan cooperation,
3.  Tremendous international collaboration,
4.  Massive amounts of investment capital,
5.  Fundamental reforms to the structure of the international banking system,
6.  No interference from the oil-and-gas industries,
7. About 25-50 years of general peace and prosperity to retrofit the world's $45 trillion dollar per year economy, including transportation and telecommunications networks, manufacturing industries, agricultural systems, universities, hospitals, etc., to run on these new sources of energy,
8.  A generation of engineers, scientists, and economists trained to run a global economy powered by new sources of energy. 

All I can say about this topic is this:  the more you know, the better off you will be.

A Policy Linkfest

Hi there folks, Prof Goose from TOD here.  I woke up with a nasty allergy headache this morning.  So, I'm just going to put together a linkfest for you instead of shrinking and integrating articles for you today. 

These links include discussions of China's proposed acquisition of Unocal, gas taxes/prices, the Democatic New Apollo energy policy legislation, and oh so much more!

(Sorry to be so lazy, but I feel like I am peering through some broken glass, some of which is then going through my eyeballs.)

I hope you'll check them out.  Surely something down there below the fold will interest you.

One: Here's a post on my reaction to CNOOC's play for Unocal.

Two: Here's one of the best and shortest explanations of peak oil I've ever seen.  You can use this to explain peak oil to anyone.

Three: Here's my advocacy of a $1/gal gas tax (including some discussion of where we are on oil prices as adjusted for inflation, and why politicians are less than willing to confront this problem until the wolf is at the door).

Four: Here's a resultant discussion of the regressive nature of the gas tax initiated by Ianqui.

Five: JH Kunstler's take on oil, Iraq, and the Hooverization of Bush.  His book The Long Emergency is a good read as well.

Six: Here's a post on the New Apollo legislation (the D energy legislation that deserves a lot more attention than it's getting, but also needs a tax increase to pay for...).

Finally, you should check out Roscoe Bartlett, R-MD6 on the floor of the House of Representatives - Special Orders - March 14, 2005

"One barrel of oil, 42 gallons of oil, equals the productivity of 25,000 manhours. That is the equivalent of having 60 dedicated servants that do nothing but work for someone. We can get a little better real-life example of this . . . let us say one gallon of gas will take a 3-ton SUV 20 miles at 60 miles an hour down the road. That is just one little gallon of gas, which, by the way, is still cheaper than water. We pay more for water in the grocery store than we pay for gas at $2 a gallon at the pump, added up. How long would it take one to push their 3-ton SUV the equivalent of 60 miles an hour, 20 miles down the road? To get some idea of the energy density in these fossil fuels, there is just nothing out there in the alternatives that have anything like this energy density."

The rest of Representative Bartlett's peak oil special orders speeches can be found here.  Definitely worth the read.

I hope to have one more post on the development and scalability of alternative energy sources tonight, but that depends if I can stay vertical for any amount of time.

The Small Changes in Consumption Can Make the Peak Flatter...For a Little While...

Hey, Prof. Goose from The Oil Drum here.  As I mentioned in my first couple of posts, there are many constituent parts of the peak oil/energy issue.  These parts include production, consumption, policy, mass psychology, environmental/green concerns, corporate/business interests, geology and exploration, and finally alternative sources of energy.

One of the things we've been doing at TOD is trying to talk about the little things that we can do to make the ride down Hubbert's Peak a little flatter, allowing society to come in for a soft landing.  If we can reduce the consumption of petroleum-based products, thereby lowering demand of petroleum, we can make the plane at least level out instead of go crashing into the ground at high speed.

The problem is what scholars in economics/political science/public choice call the free rider problem as related to the tragedy of the commons, the idea being that it is completely irrational for individuals to use as much of a public resource (the resource/energy pool) as possible unless they have rational incentive (deeply held societal norms or state coercion to govern the commons) not to do so.

I often to use the example of a 72 year old, who does not deem the AARP calendar or pen or insurance deal as enough of an incentive to pay to join AARP, is completely rational not to join.  Still, that old fart enjoys the lobbying efforts and the prescription drug benefits that resulted from their lobbying efforts.  It's same thing with individuals and corporations and the pool of energy, with a few caveats.

The point is that we can do a lot of little things that do not reduce our quality of life, but it is not "rational" for us to do so. One of the main points I hit often over at TOD is that societal norms, attitudes, and behaviors have to change about oil consumption, and in a hurry, whether earlier by choice or later on by force. 

Sure, it may seem like it's too late to make a huge difference, but is it too late to soften the blow.

So, without further ado, here's Ianqui with another post on consumption...

I first learned about Peak Oil through Prof Goose's original posts (when he was freaking out, as is inevitable when intelligent people hear about this stuff) on his personal blog.  Then I started reading the super-alarmist websites, like Life After the Oil Crash, and then James Howard Kunstler’s Rolling Stone article, among others. But I found myself a little less fascinated by the dry facts of why this is happening, and more interested in reading about what’s going to happen to us. More importantly, I realized I personally can’t do much to force open the government’s eyes, but I can do little things that maybe will make my community better, and my own life easier later on.

This stuff is nothing new, but I’m hoping that by posting it here, other people will take it seriously too. If you already know, you can send this to other people who may not. We can’t all practically move to Vermont and start organic farming, nor can we all buy a Prius. But there are easy, painless things that will hopefully be a start. Here you go.

1. Buy organic.

Most commercial fertilizers are made of oil, pure and simple. According to this article by Bruce Thompson (of Running on Empty), 4% of the US energy budget is used to grow food, and 10-13% 'is needed to put it on our plates'. When oil runs out, we're going to have to look for other ways of producing enough food for the country. Fortunately, organic farmers already know how to do this.

If you're interested, you can find the USDA standards for organic production and handling here. For example, for fertilizers, farmers must use composted plant and animal materials, not synthetic fertilizers. To control weeds and bugs, farmers may develop habitats for natural enemies of the pests or use non-synthetic traps or repellents.

I realize that buying organic can be expensive, so you may want to take it one product at a time. However, I've found that quite a lot of organic foods, especially processed things like cereal or tomato sauce, are often cheaper than their conventional counterparts. (I mean it--compare the price of Kashi cereals to Total Corn Flakes, for example.) Perhaps you can't buy all of your veggies at Whole Foods, but perhaps you have a farmer's market near you. Local farmers may not always use organic standards, but in this case, you're supporting a small-scale farmer who has important knowledge that will need to be passed down.

If you're interested in more ambitious measures, consider becoming vegetarian. As Thompson points out:

• Bread, 1 Kg = 6 miles = is one slice per 422 yards; equivalent to human doing heavy labor 1 hour
• Beef, 1 Kg = consumed by driving 76.2 miles; equivalent to human doing heavy labor 300 hr.
• Canned corn = consumed by driving 5.4 miles; equivalent to human doing heavy labor 20 hr.

1 kg of beef requires 15x more energy than eating canned corn! Thompson (and others) also notes that any quantity of grain will feed 5x as many people as if it were used to feed livestock and then comsumed by humans as meat.

2. Reduce waste by refusing packaging when possible.

About 2 months ago, I decided to stop accepting plastic bags at grocery stores. This is a truly easy thing to do, especially if you drive to your shopping locations. Carry around cloth or canvas bags. You can leave them in your car, or grab them on the way out of the home or the office. If you come home with 5 bags of groceries, in most cases you’re really getting 10 bags, since people usually double-bag. Cloth bags are sturdier, and bigger. And if you’re putting it in your car anyway, it shouldn't be a problem. This should go not just for grocery stores, but for Target, Wal-Mart, CVS, etc. Some stores, like Whole Foods, even give you 5 cents back for every bag you bring in.

Buy in bulk from bins when possible. Places will often let you bring your own plastic or glass containers to fill, and will deduct the weight of the container if you ask them to weigh it first. Same goes for salad bars. Likewise, carry around a set of silverware, or leave it in your office. You don’t need to throw out plasticware every day. A sturdy plastic cup in your office is better than taking a cup from the dispenser next to the water cooler.

3. Drive the speed limit and inflate your tires properly.

Seriously. This is an extremely difficult one for me to advocate for, since I always hated driving slower than 75. (Now I don’t really drive since I live in NYC, but that’s beside the point.) You all know that driving the speed limit saves oil, but you may not know specifically why.

Assuming you’re driving on the highway (since all bets are off in stop-and-go traffic), your gas consumption is related to your road load. Road load is calculated by factoring in several components, such as the rolling resistance of tires, friction in different parts of the car (like the brake pads or wheel bearings), the power of various pumps in the car, and aspects that affect aerodynamic drag. The important part is that if you increase your speed, the power required to keep the car running increases exponentially. Furthermore, since the factors contributing to road load are related to the shape and size of the car, it turns out that smaller, more aerodynamic vehicles (like cars) get better mileage at higher speeds, whereas larger vehicles get better mileage at lower speeds. By higher speeds, though, they really mean somewhere in the "sweet spot" of 40-60mph.

Also, don't forget to inflate your tires. According to Consumer Reports, more energy is needed to make underinflated tires roll. Furthermore, if the tire is underinflated by as little as 2 psi, it will cause a 1% increase in fuel consumption.

One last thought. Though people might try to argue that the cars made today are more fuel efficient, the truth seems to be that there are a lot of SUVs out there too, and by virtue of their size, it cannot be the case that they're most efficient at 70-80mph.

For more information on your particular car, you may want to check out fueleconomy.gov. At least parts of it, like this section on Oil Dependence and Energy Security, seem to be fairly realistic.

In short, there are many small things you can do to start the ball rolling. If we (as a nation, ideally) can just prolong the plateau of Hubbert's Peak by cutting out our most frivolous uses of oil-based products, we'll have at least a couple more years to enjoy the industrial lifestyle that we're accustomed to.

Yes, little things like that matter.  Then there's also Balogh's challenge over at his blog to think about doing as well, which is as simple as changing a light bulb. 

If we can't do these little things, how can we answer the real challenges of Hubbert's Peak?

Next, Prof Goose will discuss energy policy making, mass psychology, and alternative sources of energy.

Understanding the Current State of Energy Supply and Demand

Scott Lemieux asked a very good question in the comments a couple of posts ago:

"Roughly what percentage of energy consumption is taken up by the internal combustion engine, and what by energy production? The higher the latter, the more difficult the long-term problems (of peak oil) would seem to me, although perhaps it doesn't really matter much."

The first part of my answer comes from an interview with T. Boone Pickens who started Mesa Petroleum Company in 1956 with a $2,500 investment and built it into the largest independent oil and gas company in America and now runs one of the largest energy hedge funds.  T. Boone does a nice job of explaining why he thinks we are at the tipping point.  (In fact, today he had a couple of quotes about oil testing $70/bbl soon and a couple of other related topics.  He's been right so far.)

"Let me tell you some facts the way I see it. Global oil (production) is 84 million barrels (a day). I don't believe you can get it any more than 84 million barrels. I don't care what (Saudi Crown Prince) Abdullah, (Russian Premier Vladimir) Putin or anybody else says about oil reserves or production. I think they are on decline in the biggest oil fields in the world today and I know what's it like once you turn the corner and start declining, it's a tread mill that you just can't keep up with.  So, when you start adding the reserves in these countries, you're not even replacing what you're taking out..."

(Pickens, cont'd) "Let me take you to another situation quickly. 84 million barrels a day times 365 days is 30 billion barrels of oil a year that we're depleting. All of the world's (oil) industry doesn't even come close to replacing 30 billion barrels of oil. We don't spend enough money to even give ourselves a chance to replace 30 billion barrels. It may be because the prospects are not there. I rather imagine that's what the answer is to that.

So, if you accept that 84 million barrels a day is all the world can (produce), and then look at refining capacity, I think it's just a coincidence that refining capacity... world capacity... is 84 million barrels a day. So, we're in balance: 84, 84.  Now you see the projections for the fourth quarter of '05, I mean like tomorrow; it is 86 to 87 million barrels of oil a day required. China (and) India (are) growing fast. Our economy is going down a little bit, but it doesn't seem to be shutting off demand for gasoline, oil, natural gas, whatever. But around the world... just assume that the (U.S.) economy is slowing, but China is still ramped up; it is still 86, 87 million for the fourth quarter.  Now we've got some pretty good inventory, those will be... I think.. they'll be gone in the third quarter. I can't wait to see how this is all going to play out."

You see, the world up until the "peak," which by Pickens' logic is this year, have become accustomed to having slack production that it can call upon to assuage any supply fault.  And, until recently, OPEC and other countries were able to help us with that supply (and still say that they can, which is seeming more and more disingenuous, as it seems their fields are heading toward depletion, and we're not discovering any more large pockets of oil, and therefore can no longer make up for that slack.)

That means if there's some, no any, disruption to the supply lines, prices will spike.  This lack of a supply option also means that those who wish to disrupt the flow of oil to affect geopolitical wranglings (i.e., terrorists) will have more and more pricing power over time as the gap between supply and demand grows, as we discussed in this post over at TOD.

Another thing to remember is that the "easiest"/"cheapest to extract" oil comes out of the ground first, then the expensive "sour" oil comes out.  Much of the "sweet crude" that refineries are set up for is a good bit of that "cheap oil" that is already out of the ground.  Refining the "sour" oil requires investment in refining techniques that take a long time to implement.  Another problem that we face is that we are nowhere close to having those kinds of refineries online and ready to go (of which there are very few) to turn that into gasoline.  In fact, that is what the Saudis have been grousing about lately, "you Americans should change your infrastructure so that you can handle this more expensive and tougher to refine "sour" "heavier" oil. 

The second part of the answer, where that supply goes, goes something like this:

These days, of an average 42 gallon barrel (which after refining yields a little more than 44 gal of fluid) of oil, about 40-45% of it becomes gasoline, and another 20% becomes fuel oil, and the rest becomes jet fuel (9% or so) and other petroleum derivatives such as plastics and agricultural aids (pesticides, etc.).  Ergo, a lot of fuel goes into some kind of an engine.

The final part of the answer to his question is a little simpler, how that supply is consumed.  About 65% of the energy produced by oil turns into transportation, the rest turns into other applications, industrial uses being about 25% of the total.   

One final note about production.  As I said, many in the media, etc., keep looking to the Saudis and OPEC, or for that matter anyone else, to solve the supply problem.   

But as we have been seeing of late, it seems no one can help out, as there are very few net oil exporters left, and they, as evidenced by my last "picture of depletion" post, are getting in worse and worse shape, as my colleague Heading Out demonstrates in posts over at the Oil Drum, here, here, and here.

The only country that may be able to help us out supply-wise in the long run is Canada, because of the amazing amount of tar sand oil (which is very difficult and costly to extract and refine...), and as they are bound under NAFTA to do, they must assist member nations in the treaty before they help other consumers of oil.  Yes, so is Mexico.  Interesting, eh?  (Although, today, T. Boone Pickens was not very positive about the Canadian Tar Sands.)

Finally, if you're looking to check out current events on energy and other related topics, of which there are many, you can always check out peakoil.com, The Energy Bulletin, or Flying Talking Donkey.

--Prof. Goose

In Sum, PO in a Nutshell

If you didn't catch it, read my intro post below. There's also some links in there to primers, etc.

This post, however, will be an attempt to sum up a pretty complex topic.

Hubbert's Peak is reached when demand for oil exceeds production and supply.

Let's be clear, peak oil is not about running out of oil.  However, there is a finite amount of oil in the earth.  At some point, we will have taken half of it.  That is Hubbert's Peak.

So, peak oil is about the end of cheap oil.  Cheap oil has bred a lifestyle of convenience and excess, especially in America that is going to be difficult to maintain once the supply begins to shrink and will perhaps worsen the already growing class divide that exists in the United States. 

The less oil there is available, the more expensive and treasured it will be.  Competition, if not war, over resources is likely.

Combine this idea with increasing demand from modernizing countries like China and India, and you have the recipe for disaster. I am reminded of a quote:

"A third of humanity doesn't want to ride bikes anymore; that has profound geopolitical implications."
--Anne Korin, the co-director of the Institute for the Analysis of Global Security (May 1, 2005)

Every geologist, except those who subscribe to the abiotic oil premise (that the Earth generates oil as if it were blood), subscribes to the notion of peak oil.  The real question is just when peak oil will occur. 

Some believe that it may have already happened.  The problem is that there is no way to know for sure until well after the peak has happened. Why?  Because oil reserves are some of the best-kept secrets in the world.

Kenneth Deffeyes, author of Beyond Oil, as well as most of us over at The Oil Drum, believe the empirical evidence shows that the peak will occur sometime towards the end of this year. 

The "realists," including international energy financiers such as Matt Simmons believe that Peak Oil will occur in the next couple of years.

The unrealists, especially politicians and the USGS, talk about Peak Oil being 20 to 50 years away.

So to recap – peak oil is going to occur; that is agreed. When it will occur, can’t be proved until we are actually on the downhill slope of the peak.

What about all those alternative forms of energy?  Fuel cells?  Solar? Wind?  Corn gas?  Waste power?  I'll post on that later in the week, but those alternatives lack the scalability to make a huge dent in demand for energy.  Many of those technologies are also years away from implementation.

Also, the structure of government is such that they will not respond to peak oil until it is too late.  We need to invest in alternatives as soon as possible while we have the resources to do so.  Investment and cooperation after the peak, after realizing the problem, is too late to do anything about it. 

It is not rational for politicians to address problems until they are present.  Those who study politics will attest that politicians will wait to build the wolf trap until the wolf is at the door.

The problem is that the stuff to make the wolf trap is out in the workshed.

Next up, a post on consumption from my colleague Ianqui.

If GM Goes

Rare as it may be, Tom Friedman's got it right today.  If GM does go down the toilet, and if Toyota does step forward with the plunger, it'd be a good thing for us all.  Pushing Toyota's hybrid technology into all manner of GM vehicles, arming all the GM brands with fuel-efficient engines, the end result would be wonderful for our dependence of oil.  On the other hand, it'd be reallty bad for universal health care as GM is the most powerful and important company begging for relief, and if they leave the scene, so will a lot of the business support.  So in that way, GM sets liberal priorities at war.  But as Kevin notes, guaranteeing business support is pretty tricky, so we'd probably be better off not worrying about it.

How Much is Hybrid?

Matt's post on the new, highly-publicized study proving that hybrids aren't actually cheaper overstates the case a bit:

A lot of people I know seem to feel that car buyers irrationally underestimate the financial impact of fuel economy when making their purchasing decisions, and that this gives us reason to fear that market mechanisms alone won't make everything balance out in the long run. The fact that people are, in fact, buying hybrids even though they aren't worth the additional money seems to indicate the reverse -- consumers either irrationally overestimate the financial benefits of fuel efficiency, or else have non-monetary preferences (about, e.g., the environment or national security) that factor in favor of buying fuel-efficient cars.

The Edmunds study does not, in fact, say that hybrids are more expensive than other cars, just that they're more expensive than their non-hybrid models. So a Hybrid Civic is more expensive than a normal Civic, and a Hybrid Escape is more expensive than a normal Escape. But Matt's conclusion, that hybrids are thus more expensive, assumes too much. Car buyers probably aren't deciding between the Corolla and the Prius, they may well be deciding between the RAV4 and the Prius, or the Avalon and the Prius. Indeed, there's really no proof that hybrid buyers would otherwise be purchasing economy cars.

My hunch, in fact, is that it's the opposite. Those buying economy cars --I drive a Focus -- often lack the money to jump into hybrid territory. More to the point, we already feel fine about our 30 mpg, there's less incentive for us to buy a more expensive, fuel-saving auto. The changeover may in fact be coming between those considering light trucks or midsize SUV's and switching, at the last moment, to a hybrid. My brother, for instance, sold his Crown Victoria and bought a Civic Hybrid. Certainly the Civic Hybrid proved cheaper for him, and comparing it to a normal Civic is immaterial because the latter was never under consideration. He had the money to buy a more expensive auto, but he wanted the hybrid's superlative efficiency. The point is that those seeking to switch to hybrid vehicles are likely looking for a radical move to fuel efficiency after getting socked by high gas prices, not trying to save a few extra cents by making jumping from a fuel efficient economy car to another, more fuel efficient economy car.

Update: Nick Beaudrot has more.

Of Heat and Hydrogen

I'm not sure why Matt thinks liberals should stick to environmental arguments when advocating for an end to fossil fuels, nor why he thinks that it necessarily leads to hydrogen, but I have to disagree. Making the environmental case against carbon is only really convincing from a global warming standpoint, and the right's ability to demonize and confuse that case is considerable (for more on this, see Chris Mooney's piece in the new Mother Jones). Last week, Dennis Miller took over the Daily Show with one of his now-tiresome rants, which included a nice little line about how his grandchildren are hardy enough to deal with a temperature increase of 1.5 degrees.

Global warming, because it's complex, weird, and arguing for massive impacts stemming from minor climate changes, is hard to sell on its own. But even if we could, that doesn't make the case for hydrogen, mostly because hydrogen can't yet make the case for itself. As a fuel source, it's simply not technologically mature enough to compete with oil, natural gas, coal, or anything else, really. The fuel cells we've been able to create are failures in both the power production and cost containment departments, and few feel they'll be working for decades yet (and remember, they were supposed to be powering our cars five years ago).

Folks know, at some level, that there's a finite amount of oil in the world. And as prices at the pump shoot skyward, they're primed to believe that we're on the wrong end of the supply curve. Explaining that the costs are only going to get worse, and that the more we use the faster they'll do it, is a great, pocketbook-based argument for why we need to start transitioning off oil. And that's an important point as well; too much hero-worship of hydrogen isn't good. We're likely to need some time on natural gas to give hydrogen time to mature (not to mention that natty gas utilizes our existing oil infrastructure), and we should be investing in wind, solar, biomass, and other research in the hopes of finding other bits for our energy quilt. With oil running down as quickly as it is and hydrogen as far from market as it insists on currently being, any move from oil is going to be a patchwork of power sources and conservation strategies. Arguing for such a strange reformatting of our energy economy simply because the world is going to get a degree or two hotter is, I fear, an almost hopeless battle. Arguing for it because you're not going to be able to afford fuel otherwise (and if we don't the earth'll heat up and we're all doomed) hits with more force.

Treating an Oil Addiction

John Cole's got a sensible post on the need for a new energy strategy, but I think he forgets that he doesn't have a sensible party:

It never ceases to amaze me how silly many on the left are about the prospect of drilling in ANWR. Any reasonable solution to our dependence on foreign oil should include:

1.) Domestic drilling
2.) Research for alternative fuel sources
3.) Increased Cafe standards
4.) Radical improvements to clean Coal
5.) Nuclear plant construction and research in storage of nuclear waste
6.) Tax credits and incentives for fuel efficient vehicles, energy efficient appliances, energy efficient homes
7.) Increased refining capacity
8.) Increase oil exploration and smart extraction policies
9.) Conservation campaigns

Exactly right. But here's the problem -- Bush's energy strategy doesn't include that. If Bush stepped forward with that energy strategy -- particularly an increase in CAFE standards -- I'd kill the goddamn caribou myself to help it pass. But he's not. There's been no increase in CAFE standards, no effort to promote conservation, no coherent effort to construct an incentive structure that values fuel-efficient vehicles over inefficient ones, and not enough money to research alternative fuels.

Our addiction to oil is a problem that gets worse the longer we keep it. So the worry of many liberals, myself included, is that ANWR is just another attempt to delay the energy reckoning, and in so doing we'll be make that inevitable day much harder. To complete the addiction comparison, if my friend's terribly addicted to cigarettes and wants to quit, buying him another carton so he can smoke a reduced number each day, if I do it in addition to counseling and gum-chewing and nicotine patches and whatever else, might make sense, but simply buying him another carton of cigarettes without any of the treatment aids that'll help kill his addiction makes no sense at all. ANWR, on its own, doesn't make sense, it's simply a way to feed our addiction. That doesn't mean I couldn't support it as part of a better package, but it does mean I can't support it now.

Update: To be clear, I don't think we should drill ANWR, and in a perfect world I'd prefer we didn't. But despite my opposition, I do realize that a workable energy package will need to satisfy those who believe we should still be drilling towards independence, not only those who argue for the end of fossil fuels. As such, I'd support ANWR in order to pass a larger, more visionary package. That package, however, has not materialized, and until it does there's no good reason to support drilling the ANWR.

China and Us

The Oil Drum gets it right:

Simplistically there are two approaches a government can take to a crisis. They can do something about it, or they can do nothing. Back in the days of President Carter the nation tried the first approach when faced with an energy crisis, this time we are trying the second.

For a detailed analysis of why that is, check Michael O'Hare's analysis of Bush's energy proposals. The basic problem is that Bush is abandoning energy reform to the free market, which really isn't going to do the trick. The idea that we can simply drill our way to safety is flat insane, and here's why: No expert believes ANWR, or anywhere else in America, will provide the sort of superwell capacity that'd free us from foreign oil. It just won't happen. That means we've got to discover more foreign oil, even though discoveries are falling, the size of the discovered wells are falling, and many of the sites we currently rely on are slowing their production.

But let's bracket all that for a minute. New oil discoveries don't just need to sustain our mostly flat consumption -- they need to feed the growth of China and India. China, for their part, is using 850,000 more barrels per day. That means, every morning, China's need for oil is 850,000 barrels higher than it was the day before. So while we're trying to supply ourselves with petroleum in a world where discoveries are drying up and production is dropping, China is demanding an absolutely staggering, and ever-growing, amount of crude.

And this isn't just an energy issue, China's needs have serious, and seriously problematic, geopolitical consequences. Because they have to get more fuel, and because most suppliers are tied up meeting our demand, China's having to cozy up to providers who we've left alone, which means countries we've tried to economically isolate. So Iran is now a major trading partner and a key source of China's oil and natural gas. That means Iran now has a non-EU customer that allows them to blunt the economic pressure Europe and America can apply, making our efforts to kill their nuclear program essentially hopeless. Not only that, but China's got a security council veto, which has not only found itself working in Tehran's favor, but also in Sudan's, another important source of China's fuel imports.

Bush's efforts don't move us off oil, they just pretend we can find more. We can't. And even if we did, it wouldn't be enough. There's too much demand emerging for a resource whose supplies are falling -- the economics don't work out. So what we're doing, in the final summation, is essentially nothing. We're hoping things change, or that the market does the work on its own. But the market can't go drop because China and India ensure demand is going to continue skyrocketing. The only sane option is to try and reduce our oil usage, thus freeing up more stable providers for China; and to try creating technologies that can help both us and developing nations exit the oil era. Simply doing nothing, alternatively, is a very, very, bad strategy.

Update: By the way, want to know the easiest test around for judging the seriousness of an energy plan? Watch for whether or not it mentions an increase CAFE standards. If it doesn't, you have another "let the market do its magic" piece of politician pabulum. Bush's didn't.

The Glory of the Feebate

Sigh. The Weekly Standard is right. The gas tax is actually a bad idea. I've advocated for it in the past, and many have done the same recently, but it's a poor way to deal with the energy crisis.

The gas tax fails because it penalizes folks for conditions outside their control. We generally imagine the tax as nailing those morons peering down from Hummers, but most of the affluent, insecure drivers who're purchasing a tank for their morning commute do so fully aware that the gas bill will sting. They can take the hit. But the gas tax disproportionately hurts two other groups who don't deserve it: the poor, and the rural. The former often drive inefficient, older vehicles, and are simply less able to use them when gas prices and taxes rise. The latter don't have public transportation options and often have to go much farther to complete basic tasks, like food shopping or taking their kids to school.

And all that'd be okay if there was some compelling evidence that a gas tax would seriously cut down on driving, but there isn't. Demand for driving is less elastic than we like to think, and it's been proving itself thus in the past few months. People's lifestyles revolve around the convenience of cars, and if they possibly can afford it, they will pay quite a bit to avoid slowing the odometer's daily advance. Unless we jacked fuel up to $7 a gallon, we're not going to seriously dent road habits. And since the only tax that's in any way possible a 25 or 50 cents, this'll be nothing but a regressive revenue raiser -- you're not going to solve the oil crisis.

But when trying to cut our crude consumption, it's important to remember that the problem is less how much we drive and more what we drive. The average consumer, when making a purchase that stretches far into five digits, doesn't usually think about lifetime costs. They're worried about the rebate they can get at the dealer, not necessarily a difference of five miles-per-gallon. So Explorers and trucks suffer very little -- normally, at least -- from their fuel costs because consumers are a bit near-sighted when evaluating costs. But that's what we need to be changing -- we can't wean ourselves off oil so long as Hummers and Explorers sell. And so the trick is incorporating long-term costs into the sticker price.

Now, your friendly neighborhood conservative will point to evidence that sales of gas guzzlers are slowing down already and tell you to sit back, have an iced tea, and let the free market take care of it. Not good enough, we need things to change now. If the government wants to do something to reduce our oil usage, start by slapping a serious feebate on auto purchases. Heavy cars and gas guzzlers get a $3,000 tax tacked onto the price, and hybrids and economy cars get a $3,000 rebate on theirs. Detroit gets a fat sack of money to move quickly and smoothly into the hybrid business, folks see the savings upfront and thus make more energy conscious car decisions, and we use way less fuel. No one, save those who need huge cars for their business, is hurt by circumstances outside their control. But even they'll only be temporarily penalized as the market will beg for fuel efficient trucks and SUVs (like the Ford Hybrid), and automakers will race to place them in showrooms.

So the Standard is right -- no gas tax. What we need isn't to penalize drivers for decisions they've already made or situations they have no control over, but to tweak the market a bit and bring long-term costs to the consumer's attention when they can still do something about them. A nice, fat feebate does exactly that.

New Plan, Same as the Old Plan

So the new Bush energy plan (not, to be clear, the atrocious energy bill). It's not really bad, just kinda lame. I mean, yes, we do need to break through the impasses that are keeping nuclear energy plants and liquid natural gas terminals from being built. And the hybrid car subsidy is certainly a good thing. Neither am I really against constructing a few more refineries. But for a president who prides himself on bold strokes and towering ambition, this is kid's stuff. This is pecking your date on the cheek before drinking a warm glass of milk and going to bed. This ain't, in other words, shit.

The affordable oil's gonna run out, kids. Whether it's now or later, it's riding into the sunset as we speak. Bush says:

"Over the past decade, our energy consumption has increased by more than 12 percent, while our domestic production has increased by less than one-half of 1 percent," he added. "It's now time to fix it."

But even that overstates our abilities, Our production, after all, doesn't feed all our demand, we import vast amounts of energy. So 1% of demand growth is far larger than 1% of production growth -- so we're doing even worse than that quote lets on. Which is why it's so disappointing that, aside from building more nuclear plants and more LNG terminals (which really doesn't matter too much, as we're peppering Baja California with them anyway), Bush's plan does nothing to lessen our dependence on oil. Even the hybrid credit is minor, particularly when you consider the atrocious write-off businesses get for gas guzzlers when they claim them for professional use. Savings on a Porsche SUV top $33,000! Try getting that on your Honda Insight

There's nothing in Bush's speech about conservation, nothing about a major initiative to fund R&D, nothing about the need for Americans to try and cut their usage of gasoline, nothing, in fact, that'll have any long-term impact on the situation. What we have is a politician offering a pro forma response to a high gasoline prices, nothing more. There's no vision, long-term planning, or even new ideas in this proposal, and so it contains nothing to get excited over.

I've said it before, but liberals should be truly grateful -- from a political standpoint -- that Bush isn't a better politician. Where he smart, he'd schedule a major speech, announce that he's letting some of his tax cuts lapse and would be pouring the billions in savings into weaning us off foreign oil and pushing our economy towards a more sustainable perch. Massive subsidies for hybrids, financial assistance so Detroit can quickly develop hyper fuel-efficient vehicles, a well-funded R&D program, financial incentives for conservation, subsidies for renewables (like wind and solar), and so forth. If he did that, his numbers would shoot through the roof. As it is, he'll muddle along, with his deficiency in the vision department screwing not only the country, but himself.

Heavens to Betsy!

The New York Times has a tidy little editorial on the train wreck that is the House Energy Bill. Read it. But midway through, the piece gives in to the sort of fresh-faced naivete that makes you wonder who put a newborn in charge of writing opinions for the nation's preeminent paper. Witness:

The House is moving quickly and with sad predictability toward approval of yet another energy bill heavily weighted in favor of the oil, gas and coal industries. In due course the Senate may give the country something better. But unless Mr. Bush rapidly elevates the discussion, any bill that emerges from Congress is almost certain to fall short of the creative strategies needed to confront the two great energy-related issues of the age: the country's increasing dependency on imported oil, and global warming, which is caused chiefly by the very fuels the bill so generously subsidizes.

And unless drug dealers take a stand against drugs, kids will continue to use! Watching the Times scratch the dandruff from their hair and wonder why the Republican-led House is pushing such a myopic snarl of industry giveaways and poor policy is bad enough, reading their pleas for Bush to sweep in and save the day is unforgivable. This bill may as well be authored by the President himself. He's not going to dive in and save it, hell, he probably thinks the environmentalists got too much out of the deal.

The editorial identifies two main problems in our energy use -- dependence on foreign oil and the onset of global warming. I'd change the first to "dependence on oil", but why quibble? Either way, for them to ask the heavens why Bush isn't demanding a bill that better addresses those issues is frankly insane. Here's a guy who made his fortune as an oil man, who's got a legendarily snug relationship with the Saudis, who's made no effort to wean America off oil and in fact helped kill the revised CAFE standards which would've done it. And as for global warming? Are you kidding me? The President is generally unwilling to admit it exists, and when he does allow for some form of it, he advises Americans to enjoy their increased Summers. He killed Kyoto and replaced it with a voluntary -- yes, voluntary -- policy that sought to reduce greenhouse gas intensity, not total emissions. So even if companies took his advice and stopped raiding the cookie jar because they're good folks, they'd still be taking cookies. That's because a reduction in intensity still means an increase in total emissions. Thanks, Dubya.

But I don't expect anything better from George. What I do expect is that the New York Times, which has offered excellent coverage of the policies in question, won't pretend Bush has an enlightened view of the environment when his actions have been troglodytic. Leave that crap to Greg Easterbrook, and do what you're supposed to -- hold Bush accountable for the tone he's set. If reasonable energy policy mattered to him, he'd force Congress to create it. It doesn't, he hasn't, and he should be held culpable for the failure.

The Iran-India Pipeline

America is very, very stupid if they keep opposing the natty gas pipeline between Iran and India. Aside from the points Perkovich and Prasad bring up in their op-ed (clean gas for India, cooperation between India and Pakistan, development of Iranian natural gas, rather than nuclear, resources), tying Iran to so much Indian revenue would create another point of pressure that can be brought to bear when Iran wants to misbehave. If we can make a deal with India that we'll throw our support behind the venture (and maybe help them out in some other venues) so long as they pledge to use their economic influence to keep Iran in line, we'd have a best of both worlds situation. India would have some clean energy that wouldn't destroy their -- and our -- environment and Iran would have a partner who they'd need to remain in good standing with and who could thus demand some degree of responsible behavior from them. Blocking this pipeline out of simple spite would be the most myopic, short-sighted move imaginable.