By Yokota Fritz
The U.S. House of Representatives passed a compromise bill Tuesday that lifts the Federal off shore drilling ban. The next step is for a similar bill in the works to pass in the Senate, and after that a conference committee must iron out the differences and then it goes to the White House for a signature.
By Yokota Fritz
I watched the GOP convention speeches last night. This part where Michael Steele enjoins Americans to "Drill Baby Drill" -- likening our thirst for cheap energy to the uncontrollable, hedonistic, libertine, self-destructive frenzy of a disco inferno -- was just freaky, but there's no denying that this gesture resonates with many many voters.
Even George W Bush said in his State of the Nation speech that America is addicted to oil. And here's T. Boone Pickens explaining why we can't drill our way out of the current (and perpetual) energy crisis.
By Yokota Fritz
Let's talk about Russia's invasion of Georgia.
I generally pay attention to what's going on internationally, but this one caught me by surprise. It also apparently caught the U.S. administration by surprise. U.S. Secretary of State Condoleezza Rice was a professor at Stanford University and a recognized expert in the Soviet Union, but she was on vacation when Russia moved into Georgia.
Perhaps we shouldn't have been surprised. Russia has been seething at U.S. support of Georgia for years. Michael Hirsh writes for Newsweek, "The seeds of Russia's aggression lie in the sense of humiliation that Moscow's proud power elites have felt at the hands of the West going back to the Clinton administration's unceasing efforts to bring what used to be the Soviet bloc—and post-Soviet Russia itself—into the West's sphere of influence."
In the meantime, Georgia president Mikheil Saakashvili apparently thought U.S. approval of his politics meant he had a free hand to reign in the breakaway South Ossetia. This attack by Georgia, which has a large ethnically Russian population and many residents that Russia claims as citizens, gave Russia exactly the justification it wanted to move in on Georgian soil. It's a way for Russia to strike at the United States and Western Europe.
Some, though, believe Russia's invasion is yet another oil war. Until 2006, Russia had exclusive control over oil flowing from the Caspian region to the West. President Clinton sponsored the construction of a new pipeline across Georgia specifically to reduce Russia's influence on regional oil supplies. Georgian President Saakashvili and his predecessor, Eduard Shevardnadze, both saw this BTC Pipeline as crucial to the survival of Georgia as an independent state. The South Caucasus, previously seen as Russia's backyard, is now a region of great strategic significance to other great powers because of the flow of oil through this region. The U.S. and other Western nations have consequently become much more closely involved in the affairs of the three nations through which oil will flow.
The BTC pipeline, which opened in 2006, passes near politically volatile regions such as South Ossetia. Presidents Clinton and Bush provided hundreds of millions of dollars in military aid to help Georgia protect this pipeline. Western Europe is also working to develop more pipelines across Georgia, though this war is calling those plans into question.
Russia, for their part, has gone past securing South Ossetia and invaded into uncontested Georgian territory, seizing the port city of Poti, an oil terminal and headquarters of the Georgia Navy.
What are your thoughts on Russia's invasion of Georgia? Is this yet another oil war?
Oh, and to get on topic for a cycling blog, apparently the BTC pipeline easement is apparently an excellent mountain biking trail. The photo below are members of the Baku Bicycle Club in Azerbaijan riding along the BTC pipeline, which is buried along most of its length. See Robert Thomson's Azerbaijan photos for more. Published here with his permission.
Paris Hilton proposes a hybrid of McCain's proposed energy policy (off shore drilling) and Obama's (incentives for alternative fuels) -- limited off shore drilling that are heavily taxed to support alternative fuel development and incentives.
By Yokota Fritz
The U.S. Labor Department reports that whiolesale prices jumped 1.8 percent in June. I expect the increase to level out a little, but if you maintained 1.8 over an entire year that annualizes to an inflation rate of nearly 22%. Most of this increase is due to the large jump in the price of fuel and food, in case you haven't noticed.
The "core inflation" rate went up a more reasonable 0.2%. This is the price increase of things at the retail level and excludes food and fuel. This means that manufacturers and retailers are really eating their cost increases right now.
Some predictions from me:
I think off shore drilling is inevitable.
California voters will approve funding for the LA to SF high speed rail line.
Earlier I would have said Obama will win in November, but right now I think McCain is saying the things that most voters now want to hear. That is, "drill, drill, drill."
Interbike will be huge this year.
Voters will increase calls for mass transit and bike facilities.
Unprecedented job losses, either this year or the next.
More bicycling all around. More golf carts and other electric mobility devices -- scooters and e-bikes and so forth, too.
By Yokota Fritz
Like Brian says, always look at the bright side of life.
With public transit use nationally at a 50-year high, traffic dropped 2.1% in the first four months of this year across the country. That mileage reduction -- along with people driving smaller cars, and more slowly, to save gas -- could mean that 12,000 fewer people will die in traffic accidents this year, according to a study by professors Michael Morrisey at the University of Alabama at Birmingham and David C. Grabowski at Harvard Medical School. Air pollution has been reduced enough, according to UC Davis economics professor J. Paul Leigh, to prevent 2,200 respiratory-related deaths over the last year. Less eating out and more walking and biking could mean a 10% reduction in obesity, according to Charles Courtemanche, an assistant economics professor at the University of North Carolina at Greensboro. And, apparently, higher gas prices also keep econ professors employed.
Meanwhile, the Wall Street Journal takes another look at the old national 55 mph speed limit. While Pelosi asks Bush to open up the Strategic Petroleum Reserve and Democratic lawmakers are now joining Republicans writing up bills to open up drilling in Alaska and offshore, Senator John Warner (R-Va) sent a letter to the U.S. Department of Energy and the GAO asking them to look at dropping the speed limit as part of the debate on an energy policy. The WSJ also looks at other impacts of speeding besides energy costs: a $40.4 billion cost to society (way more than those bicycling scofflaws who run lights and ride without helmets!) and 13,000 fatalities, according to the NHTSA.
I'm 80 years old and I've been an oilman for almost 60 years. I've drilled more dry holes and also found more oil than just about anyone in the industry. With all my experience, I've never been as worried about our energy security as I am now. Like many of us, I ignored what was happening. Now our country faces what I believe is the most serious situation since World War II.
If we don't do anything about this problem, over the next 10 years we will spend around $10 trillion importing foreign oil. That is $10 trillion leaving the U.S. and going to foreign nations, making it what I certainly believe will be the single largest transfer of wealth in human history.
Pickens believes the United States can cut oil imports by a third within a decade with wholesale construction of wind turbines across the Great Plains. The electricity produced can then be used to shut down natural gas power plants so we can use natural gas for transportation, though I'm surprised to see Pickens claim that natural gas in the United States is "abundant" and "cheap" since U.S. gas production peaked last year and prices are at record levels.
Locally, more and more people are taking public transportation to reduce their reliance on imported oil. Here's what Caltrain looked like this week during my commutes.
On a related note, bikes on board the Highway 17 Express service is on the agenda for this Friday's meeting of the Santa Cruz Metro Board of Directors. I spoke with Board Vice Chair Dene Bustichi this week about the issue -- he didn't commit to anything but I hope I was able to convey the importance of bikes on board the bus.
By Yokota Fritz
I was flipping through the New York Times this morning and saw a couple of interesting articles:
"Rethinking life in Denver's far suburbs" discusses the impact that higher commute and heating costs are having on housing prices in the far suburbs around Denver, Colorado. Denver's city center, in the meantime, is seeing a revival of shiny new condos and restaurants around LoDo and along the Cherry Creek River. I used to ride my bicycle in that area and it's indeed become a very nice area over the past 10 years.
"Low Mexican gas prices draw Americans" reports that many Americans in border towns cross into Mexico to buy discounted gasoline and diesel. Gasoline in Ciudad Juarez is only $2.66 per gallon, the result of subsidies that costs the government of Mexico over $20 billion this year. Trucking companies fuel their fleets in Mexico. Meanwhile, gas stations in El Paso, TX are empty and pushed to the edge of bankruptcy. Seee the video report for more.
A similar article on gas tourism in the Wall Street Journal looks at San Diego and Tijuana, where individuals are installing extra large fuel tanks on pickup trucks and other work vehicles so they can buy subsidized Mexican fuel for resale to friends in the USA.
By Yokota Fritz
The Wall Street Journal does a good job covering the big reason that oil prices have risen so dramatically over the past year: exports fell 2.5% last year in spite of a 57% increase in prices. The conventional wisdom is that higher prices always lead to technological improvements and more investment. This drop in exports "defies traditional market logic," according to the article.
One of the big factors in decreased exports mentioned in the WSJ article is what geologist Jeffrey Brown calls the "Export Land Model." Picture an oil producing country -- "ExportLand" -- that produces two millions barrels of oil per day. It keeps one million for domestic use and exports the remaining one million to the United States at $50 per barrel. As prices rise to $100 per barrel and more, all of that American cash flowing in to ExportLand leads to more consumption, bigger houses, more roads, more SUVs to drive on those roads, suburbs, big box outlet stores, yachts and private jets. This results in more domestic consumption in Exportland, which in turn results in a drop off in exports.
ExportLand has a finite quantity of oil, so that two million barrels per day production is declining over time. In the real world example of Mexico, production dropped a dramatic 15% from 2006 to 2007 while domestic consumption increased. Similar things are happening in Norway, Russian, Saudi Arabia and throughout the Middle East.
Another real world example is the United Kingdom, which went from a major supplier to a net importer in only six years. One time exporter Indonesia became a net importer. Mexico is expected to become a net importer within five years. Even Iran -- the world's fourth largest oil producer -- is expected to become a net importer in a few years.
The question to ask yourself: When all of the large oil exporters become oil importers, who will they import the oil from?
"The sense in the market is that peak oil is here and that things will only get worse," says Lehman Brothers oil analyst Adam Robinson. He continues, "the verdict is still out on that," because of ultra deep water drilling planned off the coasts of Brazil, Australia, West Africa and the Gulf of Mexico. Going for the difficult oil that's only profitable when oil is above $100 per barrel is, of course, part of the very definition of Peak Oil -- when the easy stuff is gone, you must spend more time, effort, resources and money in squeezing the last little bit that's left in the sponge.
Read more in the WSJ. The article explains things fairly well, IMO. Thanks to Jack in STL for the heads up on this.
By Yokota Fritz
Members of the Rockefeller family, descendants of the man who founded ExxonMobil forerunner Standard Oil, are calling for changes in governance and is urging the company to cut greenhouse gas emissions and look into renewable fuels in shareholder resolutions sponsored by the family. Exxon management opposes the resolutions.
The family "are concerned Exxon's senior management has tunnel vision and is too absorbed with the challenges of daily management of multibillion dollar oil and natural-gas projects to ask hard questions about the future of fossil fuels. Mr. Tillerson and other Exxon executives have said they believe oil and gas will represent the vast majority of energy consumption for decades," according to The Wall Street Journal.
Although the family does not own a controlling share of ExxonMobil, the Rockefellers symbolic introduction of these resolutions has gotten the attention of management and hope other shareholders will join them.
Read more at wsj.com. The London Times Online also discusses the challenges faced by ExxonMobil as they move into they future:
While the Rockefellers beat their breasts, most shareholders will continue to love the fat Exxon dividend.
Yet underlying the protest from the trust fund Rockers is a big problem for oil companies - their ever-increasing reliance on the support of governments and regulators.
Exxon's riposte to the climate change and peak oil lobbies is that technology rather than regulation will provide answers to our energy problems.
It is a disingenuous argument because the energy industry is at the governments' knees begging for help - big dollops of taxpayer cash to build experimental power stations.
Drop the Federal gas tax and watch Big Oil profits GROW
By Yokota Fritz
The Federal gas tax is currently at 18.4 cents per gallon. John McCain proposes a national holiday of this gas tax between Memorial Day and Labor Day this summer. Let's say his proposal passes through both houses of Congress and President Bush signs it into law. What happens?
1. The 18.4 cent Federal gas tax is no longer charged.
2. The price at the pump drops, say, 15 cents per gallon.
3. People buy more gasoline because it's cheaper! Hurray!
4. Uh oh, the supply of gasoline hasn't actually gone up. The price at the pump creeps back up to $4 to regulate demand as gasoline follows the law of supply and demand.
5. Big Oil pockets the 18.4 cent difference and makes even more money because they don't have this federal tax expense! Hurray for them and their stockholders! Hurray also for the foreign oil companies from whom the U.S. imports over half it oil.
John McCain says "The effect of this 'gas tax holiday' will be an immediate economic stimulus" -- and he's right. It will be an immediate economic stimulus to the Big Oil Companies who are already making record profits. The proposed Federal gas tax holiday will provide zero benefit to the everyday driver, commuter and consumer. John McCain's proposed tax holiday benefits Saudi Aramco, the National Iranian Oil Company, Petróleos de Venezuela, Lukoil, Royal Dutch Shell, Petroleos Mexicano, Petrobras, ExxonMobil, Imperial Oil and all the rest while leaving America with no long term energy strategy.
By Yokota Fritz
It turns out the gasoline demand does have some elasticity, even outside of the context of large natural disasters. In California, gasoline is now about 50 cents more expensive than a year ago, and gasoline consumption has dropped 4% over the past year in California. That never happens outside of natural disasters, but it looks like Californians are adjusting to some degree.
That matches the expectation in this Wall Street Journal article. In the United States, gasoline consumption has dropped 1.1% from the previous year, but over the long term consumption is forecast to drop 4% for every 10% increase in gas prices as consumers make decisions about their transportation choices and where they live. Part of the reason gas prices are hitting Americans so hard right now is because of choices we made a decade ago about transportation and housing development, when resources were cheap.
This Grist article has more on the topic, including some mockery of Daniel Yergin (and why isn't Yergin completely discredited yet?), and a hat tip for those already finding solutions to high gas prices:
Anne Heedt, of Clovis, Calif., has been moving toward a more fuel-efficient lifestyle for the past few years. She owns a Toyota Prius hybrid but takes her bike on errands when weather permits.
"We're not always going to have the same accessibility to gasoline that we've had in past decades, so we do have to start thinking about what we're going to do over the next 50 years," said the 31-year-old Ms. Heedt, who used to work at a medical office but is between jobs.
Here in Copenhagen there are bike shops on almost every main street and they sell primarily bikes that you call “commuter bikes” in the States.
Which reminds me that I have a followup from the North American Handmade Bicycle Show about this topic -- Amy Walker of Canada's Momentum Magazine led a panel discussion on City Bikes at the show. I took notes, I've talked with Natalie Ramsland and Mike Flanigan, now I just need to organize the notes and post them.
In the meantime, Carlton in the UK asked me to get the word about this meeting on peak oil and cycling policy in Scotland:
Spokes Spring Public Meeting - Climate Change, Peak Oil and Scottish Cycling Policy. Weds 19 March, 7.30 [doors open 6.45 for coffee, stall, mixing]. At Augustine United Church George IV Bridge, Edinburgh.
David Somervell, Energy and Sustainability Manager, University of Edinburgh - speaking on climate change.
Dr Mandy Meikle, Depletion Scotland - speaking on energy supply and peak oil.
Kirsty Lewin, head of the Scottish Government's Sustainable Transport Team - speaking on government cycling policy in the light of the above challenges.
Fat Boy Biking has his thoughts on how more expensive gasoline is changing the driving habits of Americans.
By Yokota Fritz
Sheryl Crow sees a Mad Max future in "Gasoline."
Way back in the year of 2017 The sun was growing hotter And oil was way beyond its peak When crazy Hector Johnson broke into a refinery And the black gold started flowing Just like Boston tea
It was the summer of the riots And London sat in sweltering heat And the gangs of Mini Coopers Took the battle to the streets But when the creed was handed down For no more trucks and no more cars They threw cans of petrol through the windows at Scotland Yard
By Yokota Fritz
People who know about Peak Oil know the name Daniel Yergin. Yergin founded the Cambridge Energy Research Energy Associates (CERA) to provide analysis and research on energy issues. Every major oil company, most minor ones, and almost any government and private agency with energy planning needs purchases research from CERA.
Apparently, CERA and Yergin are apparently an inside joke among oil experts who seemingly take his numbers and predictions with a grain of salt. Yergin consistently forecasts lower oil prices and consistently gets it wrong. Last June, for example, CERA predicted $60 oil by the beginning of 2008 because that's what the "fundamentals" support. As everybody knows, we're at $100 with no hurricanes or other large disasters affecting our supply. Yergin and CERA consistently promote the fantastic idea that oil companies can producers 110 million barrels per day within the next decade.
In spite of CERA's dismal track record, the media consistently turns to CERA as a "highly respected" expert on oil prices and oil futures, with Yergin cited as "one of the world's foremost experts on energy." There doesn't seem to be a sense of history or accountability for journalists who accept Yergin's credentials (a PhD and a Pulitzer) without checking his history. He's undoubtedly a brilliant guy, but the facts are clear that the numbers from CERA just don't add up.
Inspiring Green Leadership
Speaking of Peak Oil, I met Andre Angelantoni yesterday at the Eco Summit yesterday in Santa Clara. Andre is the founder of Inspiring Green Leadership, which seeks to encourage individuals and businesses to make the changes that will be required in a world that is increasingly resource constrained. Andre introduced the idea of Peak Oil to the program participants.
Angelantoni encourages everybody with an interest in sustainability to become leaders during this time of coming change. He encourages these leaders to help create communities that are self sustaining, with roles in transportation, food production, power use reduction, and health care. Besides his own website, he pointed conference participants to The Oil Drum, Relocalize and Oil Depletion Protocol.
By Yokota Fritz
Dr.Thomas Palley is a Yale educated published economist. I'm just a guy who blogs about bikes. He's evidently a smart guy, but I think Palley misses the point in his essay in Foreign Policy in which he reassures investors that the U.S. dollar will remain the reserve currency of choice around the world. In spite of a growing chorus of doubt around the world on the value of the dollar, Palley tells us that the falling dollar is merely a correction rather than a symptom of something fundamental about the world economy. Here's what he writes:
"With an annual GDP of more than $13 trillion and with efficient, liquid capital markets, the U.S. economy operates on a scale and with a vitality that is unmatched." The U.S. economy runs on oil. With fossil fuel in permanent decline around the world, U.S. productivity will fall dramatically in the near future.
"Many countries can’t generate enough domestic consumption to spur growth and full employment, forcing them to rely on exports [to the United States]." Our market economy is an economy of excess. We buy TVs from Malaysia and bikes from Taiwan because we have so much extra left over for consumer "stuff." Again, this excess is driven completely by cheap energy inputs into our economy. Conservation and innovation may mitigate the damage (which is why I'm so gung ho about limiting inefficient transportation modes), but the fact is that our economy will stagnate. Permanently.
I think Palley also ignores the fundamental fact that the US dollar is a fiat currency -- the US Federal Reserve prints as much as it needs, and its value is underpinned by the requirement that almost all international oil sales are denominated in U.S. dollars. If enough oil producing nations are willing to sell their oil in euros or yuan or pesos, then that will be the end of the American dollar. Palley's "buyer of last resort" theory won't hold water when U.S. consumers can no longer afford to buy plasma TVs and plastic knick knacks.
I think every nation that depends heavily on imported oil has significant economic challenges, and these challenges are coming sooner rather than later. The mother of all paradigm shifts will soon be on us, but with increased awareness of our reliance on a scarce resource I'm hopeful we can rise to the challenge to soften the landing.
By Yokota Fritz
I've told a few friends that I expect double digit inflation on food prices for 2008, but according to the Economist, we're already there this year. The Economist's food price index rose by a third over the last year and is at its highest level since they began the index in 1845.
Increased affluence around the world means more people eat meat, but the Economist notes also that the sudden push for ethanol means about a third of the corn crop is devoted to ethanol production. More acreage devoted to ethanol production also means less acreage for wheat, soy, and other crops. Corn is also the primary feed for cattle and chickens, so increased feed costs means we pay more for steak and chicken.
The Economist in seems to predict the exploitation of remote wilderness areas as investors pay to plow them under and build roads to access these new agricultural frontiers. We're already seeing this in Malaysia, Thailand and Indonesia, where millions of acres of rain forest have been replaced with palm oil plantations.
Some predict that rural economies in the developing world will benefit from increased demand for biofuel crops from the west. The reality, though, seems to be different: food crops that used to sold locally are now no longer available, as farmers find it more lucrative to export their crops to the western world than to feed the local population.
This stuff is impossible to predict accurately -- we know farmers are abandoning set asides, for example, and planting record acreage to cash in on the ag bonanza. If there's a boom crop, perhaps there will be enough left over to sell to Mexican tortilla factories and the occasional food aid shipment.
It used to be that I was a little discouraged at my own attempts at conservation -- I realized that imy own cutbacks only enabled somebody else to burn that much more. Now that we're entering an era of real shortages, however, perhaps my savings will allow somebody who's truly in need to use that resource, and I'm a little more hopeful that my example will encourage others to sacrifice a little bit of their comfortable lifestyles to enable the poor to live.
By Yokota Fritz
Robert Hurst, author of the popular Art of Cycling book, added a footnote in his second edition about a troubling societal dilemma looming in the near future: the growing inability of of global energy supply to meet global energy supply. In his latest blog entry, Robert takes a look at the current situation, taking input from industry analysts and reviewing what the mass media is now saying about the specter of Peak Oil.
By Yokota Fritz
San Mateo is on the San Francisco Peninsula, just north of where I work. The AP published a photo of the price at the pump at a Shell station, along with a suggested solution to the problem. (Hint: It has two wheels and no gasoline motor). Via Jym.
Other random stuff:
I saw a really cool children's book last night: Mike and the Bike by Mike Ward with a forward by Lance Armstrong and audio CD of the text of the bike by Mr. Phil Liggett himself. There's even a Mike and the Bike blog.
The Hybrid Debate Among the debates: Would drive more if our cars had a lower environment impact? Sponsored by Lexus.
By Yokota FritzUpdate: The video story here is on the amazingly popular Velib bike rental program in Paris, France. One puzzling thing is reporter Keith Miller's statement that the only big American city with no interest in the project is San Francisco. In fact, San Francisco is considering a bike share program modeled after the Velib program in Paris.
Word is that NBC Nightly News will report tonight (Friday, October 26) that bicycling will be a major mode of transportation in the near future. Tape at, well, whatever time they show the Nightly News. The NBC is already reporting record high crude oil futures that were reached today. They note that OPEC is "set to boost production by 500,000 barrels a day beginning Nov. 1," but some oil industry experts are skeptical if OPEC can meet that production level.
Now's a good time to mention my buddy Jim in Fort Collins, Colorado. Jim is Oil Free and Happy and sells cute t-shirts and patches from his website for you to wear. I have one of his "Powered By Sweat" shirts. Oil Free and Happy -- give him a visit and buy a patch or shirt from Jim. (I don't make a dime from referring you to him.)
Photo: "NYC Bicycle Commuter 79th St @ 5th AVe" by Bicycles Only.
By Yokota Fritz
That's the price I saw this morning for regular unleaded at the Shell gas station on Alma Street in Palo Alto, CA. Granted, that's always the most expensive station in town, but it's still a dramatic jump from the $3.20 or so they had last week. Near my home, the nearest gas stations were at $3.19/gallon last night.
Locally, I see more bike commuters than ever although the weather has chilled, the days are shorter, and the California rainy season has started. Many are people I've never seen before on shiny new bikes, and the ones I talk with tell me they've only recently started bike commuting. They started because of high gas prices, but they continue because they discover they actually enjoy riding in to work.
Increased bicycle use for transportation is great to see, but high gas prices are still a concern for me. Higher gas prices mean I pay more for everything. Economic growth comes from growth in energy use. I'm not too hopeful that we'll effectively transfer our energy use from transportation to other, more constructive purposes. Our transition to a low energy economy will be very painful for everybody. We're already seeing pain in Africa and some Pacific Rim countries, where gasoline that once was used to run irrigation pumps, farm tractors, fishing boats and village generators is now shipped to the United States because we're able to pay the higher price for the fuel. Even North Dakota's wheat harvest was threatened because of diesel shortages there.
Many of my anti-car friends rejoice at the prospect of high gasoline prices, but I see pain in all of our futures. I know the readers of Cyclelicious are doing your parts to forestall and maybe even ease that pain. You're doing the right thing by riding your bikes and encouraging others by your example.
Here's an interesting study [PDF] from Washington University in St. Louis in which economist Charles Courtemanche demonstrates a causal relationship between the price of gasoline and obesity rates in the United States. According to this study, an additional $1 in real gasoline prices would reduce obesity in the U.S. by 15% after five years, and that 13% of the rise in obesity between 1979 and 2004 can be attributed to falling real gas prices during this period. Courtemanche provides evidence that increased gas prices will result in more exercise for Americans as well as fewer restaurant visits. He writes:
If the price of gas rises, the cost of driving also rises, which may affect body weight in two ways. First, people may substitute from driving to walking, bicycling, or taking public transportation. Walking and bicycling are forms of exercise, which increase calories expended. If a person uses public transportation, such as subways, buses, trolleys, or rail services, the need to move to and from the public transit stops is likely to result in additional walking, again increasing calories expended. Second, since the opportunity cost of eating out at restaurants rises when the price of gas increases, people may substitute from eating out to preparing their own meals at home, which tend to be healthier. Income effects may also lead people to eat out less in an effort to save money to pay for the increased cost of gas.
Courtemanche notes that the reduced obesity rates can save 16,000 lives and $17 billion per year in health costs, partially offsetting the pain of paying higher gas prices.
By Yokota Fritz
Hey America, did you know that we're at near record low gasoline inventory levels in the United States? What do you do when you're running short of a declining resource? Do you carefully husband the resource so it will last as long as possible? "No!" proclaims Congresscritter Zack Space of Ohio. "Let's pass money around so we can use it up even faster!"
I announced my plan to introduce the Rural Commuters Tax Relief Act of 2007. This legislation could not be simpler: If your household makes less than the national median income, you drive more than 30 miles to work and you work at least four days per week, then you receive a $100 tax credit for each month that the average price of gas is more than $3 per gallon.
The U.S. household median income in 2006 was $48,200. If you're married filing jointly with two children, you can easily find enough deduction to bring your federal tax burden to less than $3000. With this tax credit you can chop your tax bill nearly in half!
It's nice that Mr. Space is pulling for the little guy, but I and others have been warning for years that the affordable house out in the exurban prairie won't be so affordable once oil prices start the inevitable climb right about now.
BP says it is abandoning those markets because it cannot meet its goal of supply reliability. In the United States, BP brands include am/pm markets, Amoco, and ARCO.
BP station operators in the U.S. southeast are also reporting that they've been told to find new suppliers.
Fuel shortages that are already endemic across large swathes of Africa and parts of Asia are beginning to hit more remote areas of the United States, where mass transit and even bicycling is not a realistic transportation option.
Folks, this is our breadbasket. If our farmers and ranchers can't buy the fuel to manage our food supply, we're in for some tough times ahead.
By Yokota Fritz I really shouldn't write nasty things about people, but that's the only explanation for what she said on CNN tonight.
Q: As far as conservation, what are the trends you are seeing?
A: I'm hoping that consumers will see through the rhetoric about consuming less, demanding less, as faulty. It is not a given that consuming less will be good for our economy or for our personal freedom. It is not even established for our environment that we [should] deprive ourselves of gasoline for our personal mobility as well our commerce. And to suppose that it is good to do that, and pretend that we have consensus and put our heads together to deprive ourselves of this great product that makes the country go around, commercially and individually, I think is flawed. I'm hoping consumers and voters will see through that and be able to ignore some of the most extreme suggestions.
and on and on and on. Excuse me, but at $3 and up a gallon, I don't have the unlimited resources to spend to fill up my car every day; never mind the environmental and health damage done by heavy gasoline use.
Trilby Lundbert has surveyed gas prices across the United States since the 1950s, when she founded The Lundberg Survey. She is the source when the media needs information about oil and gasoline retail marketing and trends.
Rather than spending money locally or even spending our cash on something worthwhile, she wants everybody to continue sending their dollars to overseas producers for the product that we'll just spew from our tailpipes, no matter the cost. Yes, gasoline enables tremendous mobility and has fueled worldwide economic growth. It's a tremendously valuable substance that should be managed, not destroyed and used up with wanton abandon.
Her department's interest in nanotech is twofold: There's research in using nanotechnology for hazardous waste cleanup, and the nanotech industry itself has its own hazardous materials issues.
More interesting to my friend, however, is the tremendous interest at the conference on using nanotech for energy issues. The keynote speaker at this conference is Shell Oil President John Hofmeister. A great many vendors are apparently investigating nanotech for use in oil extraction, "clean energy", hydrogen manufacture and storage, fuel cells, and gassification.
Suzanne also talked about the multiple detrimental effects of replacing MTBE as an oxygenator with ethanol. I'll post more later, but she touched on the net carbon footprint of using ethanol for energy as well as the effects of using ethanol in gasoline on groundwater pollution.
We've all heard about the great gas boycott that will occur tomorrow, May 15. I expect many of the True Believers are filling up today in anticipation of this "boycott;" others will delay their purchase until Wednesday.
As many of us realize, delaying gas purchases for only a day does nothing to impact the price of gasoline or the profits of the large producers and distributers. Station operators -- who make pennies on each fillup -- will feel the pinch, as will the hourly wage earners who won't be scheduled to work that day because of the anticipated slow business.
The way to lower the price of a limited commodity -- like gasoline -- is to reduce demand. You reduce demand of gas by using less of it. You can use less gas by driving less -- combining trips, driving a little more conservatively and walking, biking, or using public transportation for some of your trips.
Remember, this week is Bike To Work Week across the United States. If you want to send a message to Big Oil, the best way to do so is to limit your purchase of their product permanently. Human-powered transportation is a great way to do that for many people.
For those who feel they cannot give up their cars, please remember that more people bicycling means there's more gas for you to burn.
Somewhat related is this neat essay from Down Under:
I suffer from "car brain" every time I am handed car keys. I lose all sense of logic. Somewhere deep in the reptilian core of my brain, lizard-thinking takes over. When car brain rules, any vague feeling of goodwill I have towards the environment evaporates. I enter a persistent vegetative state where I avoid walking and public transport at all costs.
We need to accept humans are cheap and lazy, and adopt transport policies that reflect this.
A very large number of Americans -- many of them posing as Patriots, Conservatives, and Liberals -- work together to undermine the American Way of Life by consuming huge quantities of petroleum, a limited resource. Worldwide demand for gasoline has jumped over the last year, while petroleum production remains static to dropping (mostly due to geographical constraints). In the U.S., warm, spring-like weather has induced millions of Americans to drive to their outdoor activities, spiking domestic demand just as refineries make the switch to the summer-blend of gasoline.
Folks, the price of gas has gone up because you are burning so much of it! Reducing the price through price controls or tax suspensions will only increase the demand, resulting in real shortages. Yes, oil companies are making record profits, but in our market economy that's how we control the demand. If price controls are imposed, then quotas must also be imposed on consumers for gas purchases.
By Yokota Fritz
The news media reported a while ago on the Mexican tortilla shortage because farmers are shifting production to yellow corn for ethanol production. Then Steve Dubner predicts on the Freakonomics blog that we'll all get skinnier as high fructose corn syrup (used to sweeten everything from ketchup to soda pop) becomes less available or more expensive.
Now comes this news that biofuel production is causing a "structural shift" in beer production. Global stockpiles of barley have shrunk by a third in the past two years and left the barley trade vulnerable to further supply problems this year.
“In the US, land that was cultivated for growing barley has been given over to corn because of the ethanol demand,” said Levin Flake, a grains trade analyst at the US department of agriculture. The US, which in the 1980s was a leading exporter of barley, is now a net importer as barley acreage has shrunk from more than 13m acres in 1985 to 4m this year, said Mr Flake.
Read more about this issue at The Oil Drum. I don't drink (been sober since 1989), but this is one of many examples illustrating the spread of resource scarcity and coming shortages. All our resources are at stake, and it's not going to be easy to reduce demand for one by finding substitutes - we're going to have to learn to do with less of everything.
Australia Senate Report: Bicycle to reduce oil dependence
By Yokota Fritz
An Australian Senate committee released its report Wednesday on the country's future oil supply. This report from the bipartisan Rural and Regional Affairs and Transport committee warns that the nation must act immediately to reduce its reliance on foreign oil.
Cycling is presented among the options in the report to reduce oil use. Cycling is seen as a “No Regrets” option by the Committee, meaning that even if the onset of Peak Oil occurs later than expected, the community benefits from numerous social, environmental and transport outcomes inherent to cycling.
Elliot Fishman of the Australia Cycling Promotion Fund highlights that “The Senate Inquiry made it clear that in addition to being an oil-free form of transport, cycling is an effective tool against our obesity and diabetes epidemics.”
While the report suggests various means to increase the supply of alternative fuels, many alternative fuels can have significant environmental issues in themselves. Fishman says “Unlike many of the supply side options provided to the Senate Committee, such as coal-to-liquids, cycling represents a zero emission form of transport. Our current policy environment requires us to propose responses to Peak Oil that are greenhouse sensitive. Bicycles have no exhaust pipe.”
Peak Oil may result in significant hardship for people around the world, but Cycling Promotion's Fishman believes that Australia's current drought shows that Australians can adapt. “We are on the verge of entering a petrol drought. As we approach the point at which less and less oil will be available year upon year, Australian’s will need to become fuel smart and adapt to a low oil lifestyle, just as we have done with water” says Fishman.
Off shore drilling passes U.S. House
The ban would have expired later this month anyway. This puts a ban on drilling from 100 miles in unless the states agree then drilling can occur from 100 to 50 miles in. However, this bill also eliminates the royalties that have been paid to the states. This bill keeps 90% of our oil off limits. This bill does is just another ban. http://news.bbc.co.uk/2/hi/business/7620282.stm
Drill, baby, drill
That reminds me, I have a dentist appointment coming up...
You know, I wonder if these people have a similar approach to dental care. Why brush and floss every day when the dentist can just Drill! Drill! Drill!
The "drill baby drill" clenched it for me last night. I was an undecided voter until that moment. When I saw the bloodthirsty (I mean "oil-thirsty") grins on everyone's faces and realized how selfish the Republican Party is (collective stereotype, I know...), I knew there was no other choice. Despite the fact that the Obama/Biden ticket is far from perfect, it's a helluva lot better than entering into this oil-thirsty, damn-everyone-else-to-hell, we're-taking-what-we-need mentality.
Honestly, I'm very sad for our country. We have become Ugly Americans.
Wow - I didn't watch the RNC last night (had the 1st CX race of the season and lots of pizza afterward). I'm sort of glad I missed it, because after seeing the 'drill bit' and McCain's speech to night, I'm not in the mood for more of the same.
There are a couple of things I wanted to say on this. The first is obvious - the idea that drilling is going to solve anything is nuts. The second is that I REALLY wish everyone would stop using Pickens as THE example of an "enlightened" oilman. His only interest in wind is the fact that he's combining his proposed windfarm with a proposed water pipeline and stands to be an even more wealthy man after all the deals go through. His clear intent is to use support for the windfarm transmission lines to acquire necessary control over the land that he wants to run the water lines on.
I have felt, and continue to, that the solution to home power (the oil/gas/vehicle fuel issue is a different story and wind has 0 to do with it except as a way to charge electric cars) is the expansion of single-home based alternatives like solar and the nifty new mini turbine spheres I saw the other day. As long as we are tied to the antiquated transmission system and massive grid there will be large power plants, which means coal, nuc, and dams.
I'm not thrilled about the Pickens Plan myself, but I used it because he's the type of guy who the "Drill Baby Drill" people might listen to.
Pickens himself says he's not opposed to more drilling, but at least he's realistic in saying it won't do much.
Here is my video mash up version of drill, baby, drill!
I hope you will enjoy.
Georgia on my mind
Hey. Don't mean to be an ass, but get your facts straight.
Georgia started this.
Russia only retaliated, please check the facts beyond what the mainstream media says.
It is all about oil and taking advantage of motorized addictions. The Western world will display other weaknesses as this develops. Jack
I've read a lot of analysis on this, but haven't drawn any conclusions yet as to the root cause. Thanks for mentioning the topic.
It has been anticipated for months. Europe will not go against Russia because they get so much energy from that area.
America has nothing to offer. We are all stretched out occupying the Middle East.
Putin despises Saakashvili, and wont rest till Saakashvili is ousted or assinated.
So... deuxcolors says get "facts straight" but... I didn't see any facts in the comment. It was all opinion. Pipelines would seem to be facts to me. So... reckon mr. deux succeeded in being what he "didn't mean" to be. I hadn't thought of this in terms of the "oil war" connection but there's a lot of sense to it. I'm feeling snug as a bug in a rug with my relative independence from fossil fuels. I"m going to have to use some heat in the house, but I'm good with sweaters. However, it seems the world around me could pretty much crumble. Okay, so far it's teh world around a few million other people that is blowing up ... but there isn't really good insulation from that... eventually...
Nikadimus, please re-read the article. There are multiple factors involved, but the one I'm bringing out in this article was U.S. and European oil politics and paranoia against Russia.
Paris Hilton's energy policy
...re: "paris hilton's energy policy"...
Gotta give her credit for this one even though the policies won't produce any short term solutions. Smart response in a political climate that still favors cars over people, great laughs. Jack
Hope you all didn't click on that fake "cnn08" video -- there's a trojan horse / virus on that site. It's not really CNN but a fake.
Well, if you're going to be optimistic about increased bicycle facilities & mass transit.. can't we also be optimistic about energy independence?
After all, oil is STILL finite whether there's more in Alaska or not. Drilling would just be putting a band-aid on a band-aid. & heck, even Iran is running on duel-fuel cars that take gasoline or natural gas. Their goal is to not need gasoline anymore. Oh, and the Brazilians are all over ethanol. The Chinese are going methanol. Are we going to be left behind licking the bottom of the barrel while other countries go on untouched?
When we wanted to go to the moon, we had 10 years to create the technology and lots of political will to back it. Now we HAVE the technology.. but where's the political will?
I agree the HSR bond issue has a pretty good chance of passing in Nov.
But do you think we'll actually get a working railway out of it?
I fear a statewide version of BART-to-SJ :(
Hey if your crystal ball is so clear I need to borrow it. The markets are getting crazy and even your backyard BankAmerica is trading at prices not seen since W was first elected in 2000. What's the stock's bottom price in this selloff and where will it be 3 years from now?
Thanks, I could use some help, Jack
PS. AsT Boone explains, "we cannot drill our way out of this problem".
T Boone, indeed... (shudder.)
When we wanted to go to the moon, our "leadership" wasn't quite as thoroughly corrupt as it is now, I don't believe. It takes leadership to inspire people to do that odd thing of working together and sacrificing; without it the "each man for himself" stuff takes over and then we have "nothing to fear but fear itself" - which is, alas, something worthy of fear.
Part of me wonders wehther there isn't *some* way to surprise people into discovering that we no, honestly, really DO NOT have to be this dependent!!! (like having us actually survive a few days without gasoline...)
Benefits of higher gasoline prices
your WSJ link actually links to the LA Times article....
Once fixed feel free to delete this post!
Thanks for that, Anon. Fixed now. That's what I get for writing blog posts on the bus!
"...dropping the speed limit as part of the debate on an energy policy." Does that mean lowering the speed limit as part of the debate, or does that mean not including the speed limit in the debate on an energy policy?
Ah, now that I have the correct link, I see that it was the former: that the senator was in favor of lowering the national speed limit. I can see strong opposition to that, but not, obviously, from those of us who average under 20 mph.
Warner (who is retiring and doesn't need to worry about re-election) wants to look at lowering the speed limit. You're right that "dropping" is confusing.
T. Boone Pickens plan to reduce oil use
I like what Ive seen of him, you can go to his website. If you want to know more. Kind of reminds me of another oil man, who ran for president. Could Pickens have presidential asperations>? http://www.tboonpickens.com
Pickens is a straight shooter, and unlike a certain other oilman politician, Pickens has long called for a national energy policy.
Pickens has been involved in politics for a while. He was a significant funder of the "Swift Boat Veterans" smear campaign in the last election.
...t.boone pickens is an intelligent & straight enough shooter to pay attention to, especially regarding energy sources & consumption...re: the swift boat thing...he's also smart enough to know which side his 'bread' is buttered on & therefore supported the party that was gonna be easiest on his personal wealth...fair ???, not really, but that is big money american politics...
...omg, fritz...that foto is worth a thousand words as an appropriate metaphor in so many ways...here comes the future, "rollin' on down the line"...& i'll bet you were just tryin' for 'funny', huh ???...
...good luck on that 'metro express' issue...you'd hope they'd understand it as regards the regulars who've been doing the bike/ bus thing for a while now...you guys should be "grandfathered" in, especially considering the crunch that everyone is feeling these days...
Boone makes the easy money as oil prices rise but cares more about our country than just making additional American pesos.
He is one of a rapidly growing list of business leaders who readily admit that our culture has to change if we want our future to be prosperous. As an oil man he readily states that "we cannot drill our way out of this problem".
The largest transfer of wealth in the history of the world has begun but most Americans prefer to ignore the obvious as they continue to drive large SUVs and other fuel inefficient vehicles. Jack
There is a public Forum for discussions about Pickens plan : www.pickensenergyplan.com Cheers.
Please to post the notes on the SVBC meeting. The statements on the SVBC mailing list from the SVBC board (of course Celia remains silent) are laughable.
Mexico gas tourism
Export Land Model
Please remember to Stumble, Digg, etc if you believe this article is helpful or worthwhile.
The upshot is that countries like the US are transferring their wealth to ExportLands.
Some ExportLands with spend this money frivolously (like burning it up powering SUV's and private jets), and most people there will be no better off than us when the oil runs out--others are going to invest it and actually improve their long term economic prospects at our expense (literally and figuratively)!
some will unfortunately spend it on armaments...
Exportland will also waste fuel but it is their resources to begin with and we've been wasting it for decades.
But also look at what they are doing for alternatives:’Developing Bicycle Paths in Doha, Qatar; A Plan to Promote Use of the Planned Bicycle Path in Doha’...with particular reference to the training and promotion of cycling to Muslim women.
Now that's a cycling path! http://www.velomondial.net/page_display.asp?pid=32
..."some will unfortunately spend it on armaments"...so murphstahoe, that means there is a 50% or better chance that it will come back to our economy...
My Dad lives in Dubai. They have a big AC culture there, or else you can't survive.
Boy, you've got to take a look at how lavishly people live there. Dubai is basically a Las Vegas multiplied by 2.
He tells me the price of everything is increasing out there, from food to clothing to rent of apartment. Low income immigrants are actually fleeing the country. But perhaps a good side is that there are virtually no income taxes, so you can make as much money as you want and no one will ask you any questions.
I think an indoor ski resort in the middle of a desert defines "lavish" pretty well. :-)Even Iran -- the world's fourth largest oil producer -- is expected to become a net importer in a few years.
Gee, maybe Iran should start a nuclear power generation program!
Rockefellers: Change crucial for future of Exxon
Entrenched companies don't generally fare well through technological shifts, even when they try.
None of the old builders of steam locomotives survived the transition to diesel, for example.
So don't expect oil companies to lead the way to the post-petroleum world, or even to survive it!
I would add this from the WSJ: If the Rockefellers are willing to stand up and be counted,maybe the Ford Foundation would, maybe Harvard College would." The proposal has been gaining support. In 2003, it drew 21.5% of shareholder votes, and it won about 40% last year.
Getting public policy to change will be highly influenced by corporate strategies...especially by those who are very dependent on the status quo.
The transition will be painful, even for entrenched companies, just look at the Big 3 who stayed alive via trucks-SUVs and outdated regulation. Jack
...well, it behooves high profile "name" families like the rockefellers to show a civic minded 'footprint' in this, the day & age of 'green'...
...& certain oil companies are now expressing their concerns or interests, through various forms of advertising media regarding "alternative" methods, but again it serves their own best interests regarding public image & future profits while mollifying a younger crowd maturing into a world that they see as needing environmental attention...
...295bus...i think you've drawn both a good & bad analogy re: steam locomotives to diesel...companies are structured differently in this the day of the 'mega-corp' w/ whole departments devoted to analyzing & assessing any direction needed to maintain profit margins...but budget departments won't allow shifts until a maximizing can be assured... ...there are now opportunities for smaller energy companies to make a mark but i believe ultimately they'll get bought up by the big present interests...
...i could be wrong but i think it'll be the same old, same old, even if it's re-badged & brought to the table on a bed of 'greens'...
Interesting thought about entrenched companies. The one that comes to mind for me is Schwinn -- they owned the bike market but flamed out miserably with nascent globalization in the 1970s.
Note the fortunes of World Without Oil ARG; turned into lesson plans that teachers are using in public schools. http://worldwithoutoil.org/metateachers.htm and still winning web awards a year after the event: http://beta.flowgram.com/f/p.html#AH8AFH7JHGIFK2
We are living through the last throes of a mad dog dying. Just as the Climate Change voices are finding credibility, so too are the Peak Oil 'prophets'
Drop the Federal gas tax and watch Big Oil profits GROW
Massachusetts is on the verge of increasing the tax by fifty cents per gallon, to help pay for road and bridge work.
The state also recentyl passed a one dollar tax increase on every pack of cigaretts to pay for state health care.
I thought Big Mac was concerned with national security? Jack
Gas prices here in Minneapolis jumped a whopping $0.23 - $0.28 from Wednesday to Thursday. No one complains.
Minnesota decides to raise the gas tax $.08 gradually throughout the year and the usual suspects wail and moan like their having their livers removed.
The next time someone says "Somebody ought to do something about the price of gas," I'll reply with, "Yeah, and somebody ought to do something about me being fat."
Gas prices are astronomical in New Jersey now, last night I had to fill up at $3.259 per gallon!
It scares me that these guys have so much power. Some of 'em can't see what they're doing, but it's gotten so lots of 'em do, and know they just don't have to care.
Oh, and of course, we'll stop fixing the roads 'cause we can't afford it... what else will we cut? Certainly not anything that would hurt our leaders...
...good informative article, fritz & as you know, northern california regularly leads the nation in high gas prices...
...price the stuff at euro cost & watch some real whining ensue...
That's this (or any other) administration's greatest nightmare. The only reason that we aren't papering our houses with $100 bills is because oil is sold in US$. If OPEC ever decided that it was to sell oil in Euros or Yuan, the american economy would collapse.
The gas tax would not cause a change in the supply of oil. There may be a slightly larger demand, but demand by Americans has not increased at a rate that calls for a 2$ price diff per gallon in 10 years, so I doubt it would change that much over a few weeks. The demand for gasoline has not decreased enough over the last few months we have had really high prices, so based on the elasticity of the market, there is not much growth available. Also, the gas you pump has long been pumped, processed, refined, etc. before it will see your tank, so the supply argument is shot. Oil is also traded as a commodity, which also greatly changes how the supply and demand chain works. The only way to see real negative change in the pockets of the oil companies is to reduce the amount of their product you use. As long as we continue to use our automobiles in the fashion that we do, the oil companies will continue to increase profits. I also think that McCain’s idea has an equal chance to the snowball I left on my running engine.
I think gas has doubled during the time crude has doubled. I haven't checked price history but that's the way it seems. The cost of refining shouldn't have changed much. Delivery only costs a little more. It seems like the rest of the price increase has gone somewhere other than to the Saudis. This would be no different.
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Anon 9:17 -- crude oil is a worldwide commodity. You're correct that U.S. demand has remained monstly constant over the past two years, but worldwide demand has shot up as India, China and other developing economies build up their infrastructure and benefit from globalization. In the meantime, global supply has remained almost constant -- worldwide oil production remains at about 85 million barrels per day.
Demand pressures have increased while supply remains constant = big price increases.
Well as a nice young man living in Iceland (a little island in the middle of the Atlantic and a part of Europe) we have some nice prices going on concerning gas, we pay no less than $8 for petrol and no less than $8.3 for diesel. I really wish I could get your $3-4 for the gallon, I'd think I would have won the lottery.
Energy Wasting Day viral video
They tried to hard. The only things truly funny in the video were the T-shirts.
Saw your recent flickr picture of the price of gas there. Yikes! Even though it's "only" around $3.15 here (regular), I find myself taking the price of gas into consideration more often when I plan a trip. It's now cheaper to take the train round trip to Chicago than drive in, and that's without figuring in parking.
Whereas living in Portland may cause me to be a bit skewed, it's definitely heartening to see shops like Clever Cycles doing well, and companies like Civia, Swobo, and Kind Cycles popping up with solid commuter-focused offerings for the US. It's going to take a while to change the mindset from recreation to transportation, but it will happen eventually. Really there's no other option.
..."...is because of choices we made a decade ago about transportation & housing development, when resources were cheap"...
...a simple but good point to bring up in an excellent post, today...
...it's that kind of thinking, that kind of mindset that obviously has to be replaced w/ longer range intelligent forecasting...
...our self limiting ability to look into the future because we're enjoying the 'now' may be our downfall...
A good deal of the blame of why Americans don't ride bikes lies on the heads of the bike manufacturers. When people were actually interested in biking while Lance was winning TdFs, what did they sell? Racing bikes and that's all you got except for MTBs. Racing bikes are good for racing but not much else.
Instead of looking at the interest and seeing what people wanted, Big Bike wanted to sell inappropriate bikes to novice bikers. It's funny to see the bike press wet themselves over the utility bikes at the NAHBS because these have been around for a while. It's just that wasn't cool enough, sexy enough for them to get excited about. Perhaps Trek and the rest will finally get the hint that US riders need bikes that work just like bikers everywhere else around the world.
Perhaps they'll get it this time.
Thanks for the comments, all. I had Bro Yam's similar post flagged but forgot to include it in my article (which I'll do in a moment).
When gas is cheap, it's easy to go wild and have fun, so I can't say I really blame people. There but for the grace of God...
Indeed it's good to see commuter bikes getting some attention. I'm one of those excited about these new bikes because they're what I've always wanted :-) I don't know if the bike industry is really to blame -- they built what they thought customers would buy.
Yeah, Fritz, in your spare time would you please get on that NAHBS City Bikes write-up???
Elasticity argument notwithstanding, the skyrocketing oil barrel is also inversely proportional to the descent of the dollar in sub-toilet paper values. I am afraid the black gold producers like to be paid in real currencies. This is absolutely obvious, but few in the US seem to notice it.
...i'd have to side more w/ fritz than brother yam in regard to the industry & it's conceptualizing...
...you spend all your capital building what you want or think people should buy & it will sit on the floor unsold...it's a delicate balance of educating, prodding, paying close attention to both needs & trends...
...there are people better versed than i, on this site, who might explain it but the bottom line right now is: commuting by bike is bigger within the industry than perhaps ever before...& it's a win/ win situation for the customers...
Nansen Saleri writes an opinion piece for the WSJ titled "The World Has Plenty of Oil" and it is one of the most popular emailed articles.
OPEC Prez Khelil told reporters the global market is being affected by what he called "the mismanagement of the U.S. economy...There is sufficient supply. There's plenty of oil there."
W complains "I think it's a mistake to have your biggest customers' economies slowing down as a result of higher energy prices."
Meanwhile oil is up $4.98 per barrel today, another new high.
Somebody is wrong...
If gas consumption is shrinking, I'm still not sure it's about demand elasticity, or even really economics.
The fact is, gas is a small enough part of the cost of driving that going from $3 to $4 per gallon doesn't raise the whole cost that much.
Of course, it's the cost that people are most aware of paying.
Maybe it's actually a combination of trying to save money and (gasp!) idealism.
Or maybe people are just trying to start making adjustments now so they'll be able to deal with life when gas gets to $10!
Sheyrl Crow - Gasoline
...ah, sheyrl...sweet, soulful as ever & bringin' it home... ...you'll always have it, babe...
Too bad she confuses Brasil & Argentina.
The vision dims and all that remains are memories. They take me back - back to the place where the black pump sucked guzzolene from the earth. And I remember the terrible battle we fought - the day we left that place forever. But, most of all, I remember the courage of a stranger, a road warrior called Max. To understand who he was, you must go back to the last days of the old world, when, for reasons long forgotten, two mighty warrior nations went to war and touched off a blaze which engulfed them all. For without fuel they were nothing. They had built a house of straw. People stopped in the streets and listened: for the first time they heard the sound of silence. Their world crumbled. And only those mobile enough to scavenge, brutal enough to pillage would survive. At last, the vermin had inherited the earth. And in this maelstrom of decay, ordinary men were battered and crushed. Men like the Warrior Max, who in the roar of an engine, lost everything and became a shell of a man. A burnt out, desolate man, a dead man, running from the demons of his past. A man who wandered far away. And it was out here in this blighted place that he learned to live again.
Dan Yergin fan club
Let's lead! Let's lead! Waving flag now :D Gotta tune up my flute to play Pied....
Tonight on the NBC Evening news with Lester Holt, Daniel Yergin was interviewed for his views on the price of oil. I assume that your "fan club" has contacted the major networks regarding this fool.
$100 per barrel
Will bicycle companies vie for the practical market in practical ways?
Will the Media Forces continue to preach "keep buying stuff!" as the nonsolution to the problems we of course don't really have?
Will great chunks of the WWW get hacked?
Will it snow on February 5?
Fritz, glad I wasn't the only one paying close attention to oil prices today. They closed at 99.64/barrel. Not sure what afterhours trading will bring.
Great, but I am ready for the price per barrel to get over 100 and stay there. Maybe that arbitrary benchmark number will get the car buying public's attention. We really need more consumer demand for smaller, efficient automobiles. At some point, people have to stop complaining about prices while they are gassing up the old SUV and actually buy vehicles that use less fuel. It would be great if more people turned to cycling, and bike companies should and will try to tap into that market. Even if most people continue to drive though, a shift to smaller cars would make the roads safer for all of us.
Economist says 'Don't worry, be happy'
You are dead on the money. Our economic basis has been the petro-dollar for decades. Schoolkids who were paying attention in the 1960s were being taught that oil was running out. That means someone realized it even then. But people only respond to a crisis, and then only long enough to be able to get back to rationalizing their way out of meaningful, long-term change.
Yep. U.S. peak production was in the early 70s, but then foreign production came online and made up the difference. This seemingly discredited the "Peak Oil Theory" to many many people. We'll always find more!
Maybe we will. Oil companies continue scouring the world for new fields, but the returns our diminishing.
Hey, if you combine this post with that post, what happens to the US dollar? Gah, now I'm going spend the rest of the evening trying to invent a hopelessly uninformed radical new economic theory.
It's all connected. The result is hyperinflation in the U.S. in the short term.
Food prices up by one third
I just found the journal article (Chaplin, L. N. & John, D. R. "Growing up in a Material World: Age Differences in Materialism in Children and Adolescents." J. Consumer Res., vol. 34, p. 480), and it has absolutely nothing to do with unhappy Hummer drivers. So it grates on me a bit the research is being spun that way in the blogosphere. It looks like the researches were trying to show why materialism spikes among younger adolescents, and why restricting things like TV watching and corporate advertising in schools doesn't really address the root of the problem. The relationship between materialism and happiness in adults with respect to their vehicles is probably a far more complicated one, but the same general idea is probably there.
(Don't mind me, I needed a good excuse to try out Chicago Journals Online.)
In 2006 35.5million people (or over 1/10th of the population) were 'food insecure. http://www.secondharvest.org/learn_about_hunger/fact_sheet/poverty_stats.html
I can't imagine this massive uptick in food costs is helping matters much.
Thanks Jennifer. I usually at least glance at the research but I didn't in this instance -- that'll teach me to be in a hurry!
Seth, the hunger problem is indeed getting worse in the USA. In the Bay Area I've seen announcements that local food banks are critically low on food.
Robert Hurst on Peak Oil
$4+ gasoline in San Mateo, California!
Get well soon!
Thanks, Citizen. I'm kind of better today. I plan to go into work tomorrow.
Go to work?! What a waste of feeling better. ;-P
Thanks for the mention Fritz. Glad to hear you are starting to feel better.
My four year old absolutely loves Mike and the Bike. He has a poster vin his room and he listens to the CD that came with the book all the time. I pointed out Phil Liggett at the Tour de Georgia this year and he wasn't particularly excited until I said, "that is the guy who reads Mike and the Bike on your CD". During the TdF, my son referred to Mr. Liggett as the Mike and the Bike guy every time he saw him on TV. I'll have to take the book along for Phil to autograph next year. I am sure that he would be glad to meet one of his younger fans.
Bicycling the Next Big Thing
"bicycling will be a major mode of transportation in the near future."
Gee, d'ya think? How come so few f us got the word in 1973, and then in 1978? All through school I heard that oil was finite. So bicycling has been a major mode of transportation in my past. It will continue in my future as long as I have one.
Bicycling was once a major mode of transportation. The rise of the automobile changed that ... but now it is back. I guess you could say that riding is, um, cyclical...
Imagine, a reporter that doesn't dig deep enough for the facts in this day and age. Shocking!
$3.49 per gallon
I, too, have seen more people cycling to work and even, in some cases, walking, even though fall has arrived. I think we are all feeling the pinch at the pump.
Pinches are no fun, period :( And when people start thinking they don't have enough... if there's a little leadership people can get together and work through and have team spirit and all the good things... or people get scared and isolated and swipe from each other and get more scared... like the man said, we have nothing to fear but fear itself... so I'm a little worried. Trying to figure out a way to create the illusion of leadership :)
You pay more for things, especially for distant things. This has two positive effects: it makes local production more attractive, and it raises the cost to the buyer of polluting the environment by shipping, i.e. you don't get as much of a free ride on pollution as you might have before. So while it sucks, at least there are positives.
I'm hoping for the "We're in this together; let's all pull together" too. Agreed that more expensive energy will make destructive/wasteful practices too expensive to be viable.
Donna, it looks like weather in your area is still somewhat pleasant. It'll be interesting to see what happens after the snow starts falling.
The price of gas must stay low if we want the economy to continue to do well. Beware of the party that clams to want to help the poor but keeps coming up with new tax ideas to hurt them. The latest Clinton idea would add $0.50 a gallon to the price of gas. Making it harder for the poor to get to work and buy food and other things that would increase with transportation cost.
Gasoline makes you fat
.... so what's making me fat, then?
I've been hearing a lot about this study lately, and honestly I have a hard time believing that it would really make that big of a difference. Lazy people will still find ways to be lazy.
We're lazy by nature. Laziness is inherent in us, and in fact laziness is a valuable survival trait for any animal. Super easy availability of cheap energy makes it *too* easy, unfortunately.
Tax credit for exurban car commuters
Fritz, I was at at party last week and two people there were complaining about their commute by car. Seems they go from one suburb to another and the traffic is so bad that it takes them 45 minutes to an hour each way. Oh, did I mention that the distance involved is 8 miles? I suggested they try riding a bike to save time and money. Although that thought never occurred to them, they actually seemed to be considering it. I'll let you know if either one gives it a try.
Nearly an hour to get 8 miles? Wow, that's pretty bad.
My commute took 80 minutes this morning. But I traveled 24 miles and it was by bike ;-) Oh, and I enjoyed it!
Signs of the times
If the government put all the money that's going to Oil towards renewable resources of energy (solar, wind, hydro-electric) we'd all be set. Even Nuclear would give us hundreds of years of power. But instead, all of the tax dollars are going to the war for oil.
Trilby Lundberg smokes crack
She's protecting her livelihood,so there is nothing here but self-interest. But, you should also remember, a lot of people think like this. A lot of people over 50.
They're gonna die and then we can change the world.
"She is the source when the media needs information about oil and gasoline retail marketing and trends."
Ok, so we are to be surprised when she says we should buy more gas?
It's like people are surprised gas prices has gone up when we have a President and Vice President who have come from the oil industry.
If you say something to yourself often enough you *can* shut down rational thinking. Lots of people "don't think" just like this. It's a lot more comfortable and as long as you only hang around people who agree, you feel good. Smoking crack helps too. What a complete bimbette Trilby Lundberg is. Hope she googles her name in a fit of pique :)
I don't know about you, but I am just glad that my "extremist views that have now achieved mainstream acceptance." Seriously, does anyone (besides Ms. Lundberg) really believe that even the act of dicussing conservation is somehow un-American. How dumb can you get? She should be ashamed.
I also don't think the exponential increase in car ownership wordwide is lifting the majority of people "out of a backward, poor way of life" as she decribes. If anything, it is just furthering the growing division between rich and poor in developing countries.
I did a little digging, and it turns out Trilby did not found Lundberg Survey Inc. Her father Dan Lundberg started the company, and her brother Jan Lundberg took over when he died. After Jan left the company, she took over. Jan has since become an outspoken environmentalist, and has battled with his sister over custody of their aging mother. He describes her sister as "a servant of major oil companies" and accuses her of "yank[ing] a home out from under family members by supporting the liquidation of the property." No word on her consumption of combustible cocaine derivatives though.
And that headline has to be an M.E. Kerr/Wendie Joe Sperber reference, right?
Dinky Hocker, wow -- umm, yeah, that reference was entirely intentional!
Chameleon: I was vaguely aware of some nastiness between Trilby and the rest of her family and I had wondered what the relationship was between Jan (a man, pronounced "Jon" or "Yawn" -- think Jan Hammer) and Trilby. I guess I should have suspected that Trilby didn't found LSI by herself in the 50s -- she looks to be about 60 years old.
Nanotech and energy research
The Great Gas Boycott of 2007
So, what you're saying is if I don't drive as much, I won't have to buy as much gas? But wait, can I keep buying gas but not use it?
So. The six ways of lowering gas prices don't even *hint* at reducing demand by *needing* less. The question "are any of these even possible" seemed to mean the suggestions didn't have to be "feasible" but I suppose driving less is truly unthinkable. Like my nonsense word verification of the day: jffokuhm ...
I received one of those gas boycott chain mails. It makes me laugh that people think they can just not buy it, but still consume the same amount. It the whole "something for nothing" mentality. The only thing that will make people use less gas is to make it more expensive. While $4-5 gas may hurt in the short term, I see it creating big changes in the long term.
Last week I drove to Phoenix ... and spent a lot on gas. These were my first real gas purchases this year.
from Snopes "Pain in the Gas" http://www.snopes.com/politics/gasoline/nogas.asp
"Gasoline is a fungible, global commodity, its price subject to the ordinary forces of supply and demand. No amount of consumer gimmickry and showmanship will lower its price in the long run; only a significant, ongoing reduction in demand will accomplish that goal. Unfortunately, for many people achieving that goal would mean cutting down on their driving or opting for less desirable economy cars over less fuel-efficient models, solutions they find unappealing." Get on bike and quit whinning!
Just a thought, if people would buy JUST gas at the gas station, and not all the other stuff, this would have a huge effect on their profits (they always say they don't make their profit from gas). You can only get gas from a gas station, but you can get all the other stuff from your corner liquer store. Just my 2 cents.
I am sorry if this is in the wrong place or wrong group. Acting Together Will Make A Difference! visit www.end2crazygasprice.com now! Our objective is to Force the gas companies to lower their gas price by asking the consumers in Canada and in the United States NOT TO PURCHASE ANY GAS from the selected gas companies posted below.
We can have a significant impact on the price of gas IF WE ACT TOGETHER to initiate a GAS PRICE WAR!!! So Please Start The Boycott Now! Until futher notice WE DO NOT BUY ANY GAS from the following companies CANADA - Esso - Petro-Canada - Shell USA - ExxonMobil (all Exxon Mobile Gas Stations) - Esso - Shell YES, WE CAN WIN BUT…It is absolutely NECESSARY To continue purchasing our gas ELSEWHERE Than at the posted gas stations above and this, until we reach our objective. And, MOST OF ALL, HELP US
BY FORWARD THIS MESSAGE TO FAMILY, FRIENDS, CO-WORKER etc...! CAN WE COUNT ON YOU…? Please visit www.end2crazygasprice.com and join us to implement it. NO PROTEST REQUIRE! All you have to remember the next time you fill up, STAY AWAY from SHELL, PETRO-CANADA, ESSO, and All ExxonMobil Gas stations. "BOYCOTT" is the only option left for us to fight against this crazy gas prices, unless the government involve and regulate the gas price somehow!
My gas price conspiracy theory
Ok -- so -- what drives the price of fuel? The market. Are we willing to pay $5 a gallon for it. Yes. Am I?
I'm not. I didn't even realize the price had gone up. What was it that Al Gore said? Find the courage to change?
I want to get eco-green-credits for riding my bike, Al?
Good post Fritz. Gas here in South Carolina is still very cheap, well under 2.50/gal currently. Unfortunately, we have some of the lowest state gas taxes in the country, but that doesn't stop many residents from appealing the Governor to temporarily suspend the state gas tax. That is a completely absurd idea when those measly taxes don’t even begin to cover the cost of maintaining the automobile’s infrastructure.
I also don’t understand the public support for price controls. You would think that in a red state like this one, a majority of people would want to see the free market economy at work, but that does not seem to be the case. No other product is as competitive as gas at the retail level. Try price shopping for a gallon of milk with out even leaving the road. I say, let the oil companies charge whatever they want. At some point, consumers will chose not to buy the product and the prices will come in line with what the public is willing to pay. Furthermore, if gas prices eventually rise to what I consider a reasonable level, people will demand fuel-efficient vehicles and car companies will provide the products to supply that demand. I am all for smaller cars and safer roads, so I would be happy to pay 6 bucks a gallon when I need to use the car.
Thanks for the comments. I didn't realize SC was one of the states looking at price controls. Some California legislators are talking about.
Doesn't anybody remember the gas lines from the 70s that occurred as a result of gas controls and rationing. Making a scarce resource cheaper will make it even more scarce.
Problems with the market setting the price of gas does result in inequity, unfortunately. The poor are disproportionately affected, for example. I know a lot of working class people who live in cheap housing miles and miles from their work, living in areas that are not well-served by public transit and "alternate commute modes" programs. They're stuck with the high prices.
Eco credits: Congressman Earl Blumenauer will introduce a "Bike Commuter" bill tomorrow to encourage employers (through tax breaks) to provide financial incentives for bike commuters.
Remember the days (like, two years ago) when everyone was in an uproar because gas was shooting up to almost 3 bucks a gallon? Well much like the frog that stays in the water that is slowly brought to a boil, people are sitting idly by while prices creep ever closer towards $4. I was riding in a car with a friend this morning and he stopped for gas. He was leaning against his car, watching the digits on the pump climb past $30 and he said, "man, I'll bet you save a ton by riding your bike." Ummm, just a bit. The world looks a lot better from the seat of a bike.
I'll second that -- THe world looks better from the seat of a bike.
Biofuel: First tortillas, now beer
I think it was James Kuntsler a few weeks ago who said that it looks like we're gonna burn off our last six arable inches of topsoil just so we can keep motoring. Nutty.
I need a drink, but it's too early in the morning here.
well, we'll always have vodka. you can distill anything into vodka. congrats on being sober...
Yeah, Peak Beer.
Australia Senate Report: Bicycle to reduce oil dependence
I liked that last link, very funny, I sure as heck hope it doesn't come to that kind of scenario.
I wondered if somebody would make it to the end of the article and notice. :-)
When I lived in Australia, I worked in the transport industry, and commuted by bike for a while. Rather scary place for bikes - a huge depot with trucks, trains, and forklifts. If the Howard government is pushing more people to ride bikes, it only means that they're figured out a way to tax them too. IndustryOutsider