On Energy Independence and Oil Prices

Michael Siegel

Michael Siegel is an astronomer living in Pennsylvania. He blogs at his own site, and has written a novel.

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52 Responses

  1. Pinky
    Ignored
    says:

    “I’m not going to pretend to be an oil export”

    Best typo ever.Report

  2. Saul Degraw
    Ignored
    says:

    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

    • LeeEsq in reply to Saul Degraw
      Ignored
      says:

      Many Americans would rather drive beaters or absolute relics of cars than take transit even in areas with good transit.Report

      • Oscar Gordon in reply to LeeEsq
        Ignored
        says:

        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

        • Damon in reply to Oscar Gordon
          Ignored
          says:

          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

          • Oscar Gordon in reply to Damon
            Ignored
            says:

            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

        • Saul Degraw in reply to Oscar Gordon
          Ignored
          says:

          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

    • DensityDuck in reply to Saul Degraw
      Ignored
      says:

      “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

      • Philip H in reply to DensityDuck
        Ignored
        says:

        Our job is to control our decisions.

        China is actually addressing their emissions issues as a public health crisis, what with all the deaths form pollution and all.Report

        • DensityDuck in reply to Philip H
          Ignored
          says:

          “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

          • Philip H in reply to DensityDuck
            Ignored
            says:

            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

            • Kate Hoover in reply to Philip H
              Ignored
              says:

              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

      • Pinky in reply to DensityDuck
        Ignored
        says:

        “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

    • Kate Hoover in reply to Saul Degraw
      Ignored
      says:

      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

    • Dark Matter in reply to Saul Degraw
      Ignored
      says:

      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

  3. LeeEsq
    Ignored
    says:

    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

  4. Philip H
    Ignored
    says:

    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

    • Jaybird in reply to Philip H
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      says:

      I hope the grid holds up.

      Nothing worse than a charging station in the middle of a rolling brownout.Report

      • Chris in reply to Jaybird
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        says:

        Just gotta find one near a hospital or a major corporation.Report

        • Chris in reply to Chris
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          says:

          (Also, probably goes without saying, but you can’t pump gas at a gas station without power, either.)Report

        • Michael Cain in reply to Chris
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          says:

          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

          • Chris in reply to Michael Cain
            Ignored
            says:

            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

      • Philip H in reply to Jaybird
        Ignored
        says:

        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

    • Damon in reply to Philip H
      Ignored
      says:

      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

      • Philip H in reply to Damon
        Ignored
        says:

        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

  5. Jaybird
    Ignored
    says:

    I keep feeling like we’ve got some serious order-of-operations problems.Report

  6. Michael Cain
    Ignored
    says:

    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

  7. North
    Ignored
    says:

    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

    • Michael Cain in reply to North
      Ignored
      says:

      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

  8. Brent F
    Ignored
    says:

    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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