This is an article that is as applicable to Europe as the US, though we have a slightly different set up for oil here, we are just as dependent on it, despite being a bit more efficient in its use.
America must face the harsh realities over oil
Gerard Baker:
American view
President Bush was in Saudi Arabia at the weekend, trying to get his hosts to increase oil production to take some of the pressure off rising prices.
Ever willing to be seen to please their American friends, the helpful chaps at the House of Saud duly agreed to ramp up output by a few hundred thousand barrels a day. This, of course, is a drop in the tanker of Saudi, let alone global energy production, and to nobody's great surprise it had no effect whatsoever. The price of crude crept above $127 per barrel in London trading yesterday.
In economic terms, there's a not very polite term for what the President was doing which describes the futility and discomfort of performing a certain bodily function into a countervailing breeze.
But Mr Bush - an oilman after oil - knows this, too. His efforts were more of a political gesture than a meaningful policy initiative.
In political terms, inexorably rising oil prices are starting to generate something approaching panic in America. The Republicans, already battered by the weak economy and the seemingly intractable Iraq war, are ripe targets for yet more opprobrium for failing to rein-in oil companies as they heartlessly exploit the poor Americans who find themselves unable to drive their five-litre engined cars very far this summer.
The crunch from oil prices plays an important rhetorical role in Hillary Clinton's barely breathing presidential campaign. In her stump speeches to rapidly diminishing audiences, she never misses an opportunity to berate the oil companies - and their Republican friends in government.
Her economically illiterate idea for a gas tax holiday over the summer was predicated on these popular fears about rising energy costs, though one of the many problems with it was that it would probably have ended up channelling even more revenue to the oil companies because it is unlikely they would have passed on the whole tax reduction on to consumers.
Barack Obama has been marginally less demagogic, to be fair, but he can't resist sticking it to the heartless energy companies, either.
The President and most of his dwindling band of Republican brothers (though not, it should be said, the party's presidential candidate John McCain) pursue a similarly silly tack.
They'd have us believe that if only the United States would open up the Arctic to more oil exploration, prices would drop like a stone. In an election, this is all very well. But time is getting on and it is becoming ever more urgent that whoever wins in November drops the populist rhetoric and gets to grips with a couple of basic realities.
The first is that higher energy costs are here to stay. You don't have to buy Goldman Sachs's headline-grabbing forecast this month that crude will reach $200 a barrel.
But it would be foolish to try to deny that in the immediate future, anything we do now will not stop prices rising.
Oil is up by almost 30 per cent this year alone. That's not the fault of greedy energy companies, or that other current favourite, unscrupulous speculators. It is a simple fact of economic life in a world economy that is, in effect, experiencing a new industrial revolution among half its population.
Even in the event of a serious recession in much of the developed world, energy demand is not going to change much.
The second reality is that this is, in the end, at least in terms of the nexus of economics and energy policy, a Good Thing. It should force all of us in the West to redouble our efforts to diminish our dependence on oil. Fortunately, markets are quite effective at doing this. As we all know, the capitalist world - yes, even the US - is much more energy-efficient today than it was 40 years ago. For that we have the last great oil shock of the 1970s to thank.
A third reality is that, at least for the foreseeable future, these higher prices will have enormous implications for geopolitics.
It is a staple of all political debate in the US now that the American dependence on oil has led to staggeringly bad policy for decades towards the big oil producers. It has forced the US into bed with some unsavoury characters and has been the constant factor behind repeated and often baleful US interventions in the Middle East.
Now, in addition to the threats posed by an even more complicated Middle East, the US has to address the challenge of a rapidly enriching Russia, a country that shows every intention of rolling back democratic progress and using its energy wealth to create trouble for America and Western Europe wherever it can.
In the very near future, real, ingenious American leadership will be needed not to make pointless gestures towards the newly powerful energy producers but to ensure we don't turn our dependence on a scarce resource into political capitulation.
gerard.baker@thetimes.co.uk
An interesting article about the emerging realities of oil dependency
An interesting article about the emerging realities of oil dependency
"We are never so happy, never so unhappy, as we imagine"
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
An interesting article about the emerging realities of oil dependency
Last week the Democrats shot down a bill that would have opened up ANWR, both coasts and the Gulf for oil drilling. At the same time it would have taken the environmentalists out of the picture from stopping refineries from being built. We need to put more oil into production to get the price down and we need more refineries built to keep up with gasoline demand but the Democrats kept that from happening. So tell me just where is this Democratic party of today planning on taking us?
An interesting article about the emerging realities of oil dependency
Jester;870441 wrote: Gal what would happen if the typical american gas user just decided to stop using gas?
Lets say each of us found a way to cut our gas consumption by 50%? One company I contract with which has 9 buildings between 5 cities has just put out an open opportunity to move employees closer to their homes by allowing telecommunting or physically moving employees to closer offices where/when possible. The company, 900 strong, got 650+ requests inside a week. Per the HR contact I have with this company she said they will be able to accomodate about 70% of the requests. Not sure yet of how much it will cut commute time, gas and other factors but I think its pretty interesting that it takes almost 4 bucks a gallon to start folks thinking about the change. Many folks I know have altered vacations due to the gas prices. I'm running 100% biodiesel in all my trucks.
I actually want to run out of oil as soon as possible, in fact. 30 years is too long to wait.
First question is "what percentage of US oil consumption is used in domestic transport"?
I would suggest that it is relatively small and that even a halving of domestic travel would make little difference to overall consumption.
That being the case your answer is "very little".
If you try to carry that reduction over into commercial use then all you would achieve would be to cripple your economy.
Lets say each of us found a way to cut our gas consumption by 50%? One company I contract with which has 9 buildings between 5 cities has just put out an open opportunity to move employees closer to their homes by allowing telecommunting or physically moving employees to closer offices where/when possible. The company, 900 strong, got 650+ requests inside a week. Per the HR contact I have with this company she said they will be able to accomodate about 70% of the requests. Not sure yet of how much it will cut commute time, gas and other factors but I think its pretty interesting that it takes almost 4 bucks a gallon to start folks thinking about the change. Many folks I know have altered vacations due to the gas prices. I'm running 100% biodiesel in all my trucks.
I actually want to run out of oil as soon as possible, in fact. 30 years is too long to wait.
First question is "what percentage of US oil consumption is used in domestic transport"?
I would suggest that it is relatively small and that even a halving of domestic travel would make little difference to overall consumption.
That being the case your answer is "very little".
If you try to carry that reduction over into commercial use then all you would achieve would be to cripple your economy.
An interesting article about the emerging realities of oil dependency
Jester;870441 wrote: Gal what would happen if the typical american gas user just decided to stop using gas?
Lets say each of us found a way to cut our gas consumption by 50%? One company I contract with which has 9 buildings between 5 cities has just put out an open opportunity to move employees closer to their homes by allowing telecommunting or physically moving employees to closer offices where/when possible. The company, 900 strong, got 650+ requests inside a week. Per the HR contact I have with this company she said they will be able to accomodate about 70% of the requests. Not sure yet of how much it will cut commute time, gas and other factors but I think its pretty interesting that it takes almost 4 bucks a gallon to start folks thinking about the change. Many folks I know have altered vacations due to the gas prices. I'm running 100% biodiesel in all my trucks.
I actually want to run out of oil as soon as possible, in fact. 30 years is too long to wait.
think for all countries, energy efficiency is going to move pretty quickly to the top of the agenda, both at a political level, and also at a personal, individual level, as its the quickest and most practical way of reducing current consumption, to just have a less energy intensive lifestyle (which as we all know is healthier anyway, and a lot of people could do with walking and cycling more). Planning is key of course, for commute times, population densities, public transport, distributed energy and water systems, all of that stuff is easily achieveable, it just means people are going to have to take a little bit of pain and cut back on a few things they take for granted, but seriously, we don't have to go back to the stone age, just be less wasteful.
After that, we certainly need to develop a new approach to power generation, and have far more secure energy and food security, I think everyone recognizes that now. Newer energy technologies, renewables, biofuel and biomass, an expanded nuclear power generation program, as well as a much smaller role for efficient fossil-fuel-based generation plants (coal mostly, with carbon sequestration), cars will be hydrogen fuel cell based, Honda already have a production model, it produces 150 kWs (think of a kW like being equivalent to one HP) so there is no problem with power, I have seen designs for Hydrogen Fuel cell cars with kW ratings in the thousands, so they are not going to be like electric cars in the 1970s; that for the medium term, then for the long term, with minds focused wonderfully on the fact that whoever cracks the requirement for a relatively cheap, and non polluting energy source will become the richest human whoever lived probably, should help spur the smart people into developing new technologies, though anything I can see is still decades away.
Lets say each of us found a way to cut our gas consumption by 50%? One company I contract with which has 9 buildings between 5 cities has just put out an open opportunity to move employees closer to their homes by allowing telecommunting or physically moving employees to closer offices where/when possible. The company, 900 strong, got 650+ requests inside a week. Per the HR contact I have with this company she said they will be able to accomodate about 70% of the requests. Not sure yet of how much it will cut commute time, gas and other factors but I think its pretty interesting that it takes almost 4 bucks a gallon to start folks thinking about the change. Many folks I know have altered vacations due to the gas prices. I'm running 100% biodiesel in all my trucks.
I actually want to run out of oil as soon as possible, in fact. 30 years is too long to wait.
think for all countries, energy efficiency is going to move pretty quickly to the top of the agenda, both at a political level, and also at a personal, individual level, as its the quickest and most practical way of reducing current consumption, to just have a less energy intensive lifestyle (which as we all know is healthier anyway, and a lot of people could do with walking and cycling more). Planning is key of course, for commute times, population densities, public transport, distributed energy and water systems, all of that stuff is easily achieveable, it just means people are going to have to take a little bit of pain and cut back on a few things they take for granted, but seriously, we don't have to go back to the stone age, just be less wasteful.
After that, we certainly need to develop a new approach to power generation, and have far more secure energy and food security, I think everyone recognizes that now. Newer energy technologies, renewables, biofuel and biomass, an expanded nuclear power generation program, as well as a much smaller role for efficient fossil-fuel-based generation plants (coal mostly, with carbon sequestration), cars will be hydrogen fuel cell based, Honda already have a production model, it produces 150 kWs (think of a kW like being equivalent to one HP) so there is no problem with power, I have seen designs for Hydrogen Fuel cell cars with kW ratings in the thousands, so they are not going to be like electric cars in the 1970s; that for the medium term, then for the long term, with minds focused wonderfully on the fact that whoever cracks the requirement for a relatively cheap, and non polluting energy source will become the richest human whoever lived probably, should help spur the smart people into developing new technologies, though anything I can see is still decades away.
"We are never so happy, never so unhappy, as we imagine"
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
An interesting article about the emerging realities of oil dependency
Jester;870531 wrote: Oh well then thats good, I can tell the greenheads that, 'why bother since its such an insignificant amount we'd save.'
Far easier to cut down on your industrial pollution - do that and you'd keep all the greenheads in the world off your back
Far easier to cut down on your industrial pollution - do that and you'd keep all the greenheads in the world off your back
An interesting article about the emerging realities of oil dependency
Jester;870684 wrote: Nah, just a Lee Iacoca!
I read his book, he is a pretty cool guy, and I always liked those Mustangs you have over there.
I read his book, he is a pretty cool guy, and I always liked those Mustangs you have over there.
"We are never so happy, never so unhappy, as we imagine"
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
An interesting article about the emerging realities of oil dependency
Oil today, $132 per barrel. Thats a 60% increase in 12 months. Scary.
"We are never so happy, never so unhappy, as we imagine"
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
An interesting article about the emerging realities of oil dependency
The fuel protests have been going on in Europe all week, and people are demanding a continent-wide cut in the VAT charged in Fuel. I understand why people want it (I drive a car as well, and I love it) but its not really going to stop the problem, which is that the demand for fuel is started to overwhelm the ability to produce it, and therefore the prices are starting to escalate dramatically. What needs to happen is that politicians from all over the world need to meet up to discuss the reality of what it happening, and how best to manage the fallout from the reality of the end of cheap oil. Otherwise we will see conflicts breaking out everywhere, and countries collapsing because of internal political pressure, and not just middle eastern countries either.
"We are never so happy, never so unhappy, as we imagine"
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.
Le Rochefoucauld.
"A smack in the face settles all arguments, then you can move on kid."
My dad 1986.