52 thoughts on “On Energy Independence and Oil Prices

          1. That’s what made it so enjoyable. I’m reading it and most of my brain thinks it’s right but a small part is telling me that the sentence doesn’t make sense, but I can’t see what’s wrong with it. It was like one of those “is this rotating clockwise or counter-clockwise” effects.Report

  1. The big issue I have is that this spells disaster for every really doing anything on climate change. I don’t like the current gas prices and I get some shocks when I see how much it costs to fill my car even though I try and cut back on driving thanks to remote work/city living. However, gas prices need to be this level or higher in order to combat climate change. Most of the rest of the world has had gas prices this high for years, if not higher.* There might be other methods of reducing car driving but Americans would riot if those were tried.**

    But arguing for these kinds of gas prices in the United States is not a winning issue politically. The right-wing hates it for obvious reasons but even liberals who understand that climate change is real think the high prices hurt working families and would rather stick to blaming corporate greed.***

    *There are some memes which show EU gas prices and complain but these are misleading because in Europe gas is sold by the liter and there are about 3.78 liters in a gallon. France appears to charge 2.04 on average per a liter of gas. This comes out to about 8.08 Euros per a gallon and the Euro and Dollar are at near parity now.

    **Singapore has certificates of entitlement which allow people to own cars for 10 years. The system for the number of these certificates is complicated and the price is based on demand. My wife tells me that it is the car dealerships that arrange these. The COE price is currently north of $73,000 according to an April 6, 2022 article on Bloomberg.

    https://www.bloomberg.com/news/articles/2022-04-06/singaporeans-need-73-549-just-for-the-right-to-buy-a-car

    This does not include the other taxes on imported cars. The paradox of this is that you see zero beaters on the streets and highways of Singapore. Used cars are sent to neighboring countries for sale. The other paradox is that Singapore has an inordinate amount of luxury cars on the road. Americans would riot if any government tried to institute a system like this.

    ***I do think stock buybacks are a big issue here as well but corporate greed is a temporary scapegoat to a larger problem.Report

      1. That’s because Americans would rather pay a ton and drive a crap car than be stuck in a bus or train with someone who doesn’t shower regularly or understand personal space (or worse).Report

        1. Also, “transit” of all varieties, but slightly less via buses, takes FOREVER to react to changing trends. I’ll use, again, a real story of a guy I used to work with. He commuted from Fairfax to the other side of the capital beltway. It took him more than an hour, and it was a combo of metro and buses. The buss dropped him off over a mile from the office. It cost him 30 dollars each day. If he drove it would have taken 30-45 mins and would cost him 30 bucks a week. Do the math. The only reason he kept taking transit was he could sleep on the train.

          Transit isn’t flexible, especially if you have 4 gov’t agencies across 3 states all providing “input” on how to run the organization, and as, essentially, a gov’t agency. They aren’t dynamic in terms of maintaining ridership, maintenance, etc. because it it’s the job of ‘crats to keep keep their job, not service the public-that’s secondary.Report

          1. Ideally, a properly funded transit system would cover most of those gaps, but even with funding, in the US you hit so many veto points that it’s unlikely to ever be anything more than a mass people mover along arterials, with the last mile problem forever neglected by transit.Report

        2. Yes and now. Cities have more Americans that sparsely covered rural areas and plenty of people in major metros do take transport under crowded conditions every day (pre-COVID at least). In many other countries, people willingly pack into cars in ways that make NYC’s rush hour subways look like a walk in a meadow.Report

    1. “gas prices need to be this level or higher in order to combat climate change.”

      Because once poor people give up trying to have jobs and just tighten their belts and cut back to necessities, they won’t be driving anymore and climate change will definitely stop getting bad quite so quickly! (Chinese coal will still be giving the planet a middle finger, of course.)Report

        1. “Our job is to control our decisions.”

          If you want to say out loud that this is not actually about Saving The Planet but is more about conforming to Puritan morality, go ahead, but you’ll maybe find that a less compelling message than you imagine.Report

          1. It is about saving the planet. Its also about recognizing that we can lead or follow on this and a host of other issues. At best we can make better choices for ourselves and then ask China why they aren’t doing the same. And frankly “we shouldn’t because China won’t” is a morally weak, economically foolish and intellectually lazy argument. We don’t make it about human rights (where the US with all its flaws is still better then China). We shouldn’t make it here, especially if China is the existential threat Trump claimed it was.Report

            1. China thought Trump was an existential threat. Don’t put the cart before the horse.
              If Trump could take down the Chinese Communist Party, then we might have someone who graduated high school running the joint.

              Why a bloke like you thinks that China can’t accurately assess its own security situation…?

              Your votes have consequences. A vote for Brandon was a vote for more pollution, not less (see China pollutes more than America and the EU combined).Report

      1. “gas prices need to be this level or higher in order to combat climate change.”

        I have a feeling that a week from now, if a Republican accused a Democrat of believing this, he’d be condemned for strawmanning.Report

    2. Your lack of vision is troubling. Can you not think of a single other way to reduce our impact on “climate change”?

      Raising gas prices will not fix most of the world’s pollution. Certainly not if only done in America.
      China emits double what America does (and more than the EU and America combined), and reducing America’s pollution only works if we’re not simply exporting it to China.

      International Shipping emits more than a tenth of the carbon dioxide that America does in total, per year. Think about that, and then think about how much emissions controls we have on Dirty Boats.Report

    3. RE: Singapore
      Singapore population density: 21,646 people per mi2.
      USA population density: 94 people per mi2.

      With a population density that’s 0.2% of theirs, we have different transportation needs.

      RE: disaster for every really doing anything on climate change
      Huh? Oil is massively up because of Russia going all War Criminal. Sounds like that’s a lot right there.Report

  2. If only there was a method of transportation that could move thousands of people around without them having to drive everywhere them selves. Something that runs on electricity and exists in nearly every other developed democracy. I think they are called trains and trams. Even gas buses would be more efficient energy wise.Report

  3. Wonder how Gov. Abbott feels about this:

    Texas is planning to add enough electric vehicle charging stations throughout the state to support 1 million electric vehicles with dozens of new stations to allow for easier long-distance travel.

    In a draft plan released this month, the Texas Department of Transportation broke down a five-year plan to create a network of chargers throughout the state, starting along main corridors and interstate highways before building stations in rural areas.

    The plan is to have charging stations every 50 miles along most non-business interstate routes.

    https://www.texastribune.org/2022/06/20/texas-electric-vehicle-charging-stations/Report

        1. Or, according to my friend who lives there, an apartment complex that meets the requirements for serving independent oldsters. She recently moved into one, and among the other benefits, the complex gets the same priority as hospitals for electric service.Report

          1. This is true in theory, but it didn’t work out this way. I think this is largely just a failure of reporting, but it was a failure nonetheless. A lot of such people (on oxygen, e.g.) had to be relocated to shelters because their apartment complex power went out.

            Our power was out for a little more than 3 days (and we had, at the time, a 13-month old), and what has bugged me every day from the day the power went out until now, is that Samsung was using about 20% of all of Austin’s power, and didn’t even think about shutting down until day 3. People were dying, my 13-month old had to sleep with me holding her hands to keep them warm, and Samsung’s microchips were being produced at regular capacity.Report

      1. The grid issue is a big one. But as long as states regulate individual providers, even the three interconnects we have aren’t really a grid per se. Which, as Texas showed us fairly recently, is a huge problem.

        Now, there is $65 Billion in the Bipartisan Infrastructure Bill to help with the Grid, but its all in small distributed chunks. Congress usually does that when they don’t really want to fix a problem, but appear that they are, and the Biden Administration is somewhat hamstrung in not being able to aggregate the funds.

        But at least they are trying, unlike Texas which has done nothing (or has had nothing reported out of it) to actually fix its existing issues.Report

    1. That’s nice. But how is the power to “fuel” those cars being generated. Often it’s coal.

      https://www.youtube.com/watch?v=S1E8SQde5rk&ab_channel=TEDxTalks

      Here’s a good talk on the foolishness of measure emissions at the tail pipe vs at the generation point. Electric cars just shift it.

      And an interesting vid by Michael Moore on the Chevy Volt and where the majority of the power to “recharge” it comes from.

      https://www.youtube.com/watch?v=uXjJ9xjzPBw&ab_channel=gamalieliReport

      1. Its far easier – technologically – to scrub a single power plant stack for CO2 then it is for thousands of tailpipes. Power companies don’t want to do it because right now the fines for polluting are cheaper then the cost of upgrades.

        Its all about incentives.Report

  4. The bulk of energy used in the United States is electric. About 40% of that comes from renewables…

    I stopped reading at this. The United States gets nowhere near 40% of its electricity from renewables.Report

      1. For domestic generation in 2021, wind produced more than 45% more power than conventional hydro, 9.2% of the total versus 6.3%.

        Also, three grids: Eastern, Western, and Texas, with minimal interconnection between them. For 2021, the Western Interconnect was 41% renewables, Texas was 24%, and the Eastern only 14%. Quit different wind/hydro splits as well. In the West, hydro exceeds wind. In the East, wind exceeds hydro. In Texas, wind exceeds hydro by like 100:1.Report

            1. Depends on the installation size. A privately owned 25 MW solar farm selling to the ISO or local power authorities would be included. The EIA (like me) would consider my neighbor’s 10 kW peak solar installation to be demand reduction/management.Report

    1. Also, it’s not true that the bulk is electricity either, is it? That would make us radically different from the rest of the world, where electricity is only about 20% globally, right?

      Also, a quick look at the USEIA says 2021 renewable % of electricity production was ~21%.Report

      1. A quick look at the stats says that while electricity is the largest energy-use sector, it only accounts for 37.8% of the total energy used in the United States (2021 data), again from the USEIA.Report

            1. Oh yeah, piston IC engines are terrible. There are IC engines that are more efficient, but not by significant amount; although coming up with IC designs that are better enough to upset the market is an active field of academic and private research.Report

  5. I think this was generally well done. No real complaints. I would, maybe, have added a paragraph talking about how each period of high oil prices originates a period of low oil prices and vice versa but otherwise pretty complete an solid.

    Good job.Report

    1. Good job.

      I disagree, and expect better from Michael. Drop all the things about electricity, which contain large errors, and have essentially nothing to do with his thesis. Start from the LLNL Sankey chart I referenced above. It’s about the inelastic linkage between oil prices and US transportation technology, neither more nor less. Meaningful energy independence requires abandoning the internal combustion engine, with tiny exceptions.Report

      1. Something I saw for my next Tech Tuesday was a group showed that (IIRC) hydrogen was an acceptable alternative fuel for nat gas turbines.

        Bit of a hit on the shaft power, but considering the exhaust products it was seen as more than acceptable.Report

  6. Athabasca heavy crude is quite frequently turned into gasoline, most of Western Canadian cars run on it. You just have to have refineries geared towards turning heavy crude into gas, which varies from refinery to refinery and is expensive to change. However, the main point of Keystone from a shipper’s perspective was to increase market access from relatively landlocked Athabasca to the Gulf Coast refining and shipping complex. This is necessary from their perspective to cut down the favourable price premium Midwestern American buyers get in buying Canadian crude. In effect, part of the project was to get American consumers a worse price on gas, although its main benefit was preventing the deadweight loss of pipelines being better and cheaper ways of shipping crude than trains (or, shudder, trucks).

    Most efforts to make Americans believe Keystone will help them at the gas station are deliberately misleading from people who want you to approve it for their own reasons. Ironically, one of the best real arguments for it is that its much, much better for the environment to ship the product in a pipe than by other means, but that line of argument doesn’t align with any American’s political interest, so its not used.

    Which leads to a further point, North America as a unit, which is how the oil market tends to work is basically self-sufficient in oil, with Canadian exports balancing American imports. Whether or not a particular place in North America uses North American crude or crude shipped in over the ocean is largely a matter of local market convenience. As a strategic war-time concept, North America is entirely energy secure.

    However, crude oil is pretty close to fungible and can be shipped relatively cheaply on the ocean, so the price at a coastal location pretty closely follows world prices. So the price you pay at the pump depends on things like Eastern European and Middle Eastern geopolitics, even if you don’t depend on any of the supply you use. Because places like China, Germany and Japan do depend on them and they have the money to bid against you when oil gets scarce.

    Now, in theory you could immunize the American driver from price shocks in perpetuity by making North America its own closed oil market. But that would require a commitment to a higher regular prize to make American shale and Canadian bitumen production permanently competitive against cheaper overseas production.Report

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