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Global Oil Panic: The United States of America

Oil prices are on the up and up, setting new records at the pump. Each time this happens, a spate of panicky reactions in national politics, all isolated from each other, burst up. First, a brief look at the state of the debate in the USA:

In the USA, McCain has proposed reacting to the higher oil prices by temporarily cutting taxes. This is in keeping with the Republican solution to everything -- cut taxes. Hillary Clinton has jumped on the McCain tax cutting train, hoping to draw more contrasts with Barack Obama. Meanwhile, Obama finds himself in the same camp as George W. Bush in opposing a symbolic tax holiday. A few paragraphs from the New York Times, via Drezner:

At a meeting with voters in North Carolina on Monday, Mr. Obama said lifting the gas tax for three months would save the average consumer no more than $30, a figure confirmed by Congressional analysts. Mr. Obama has previously dismissed Mr. McCain’s proposal as a “scheme.”

“Half a tank of gas,” Mr. Obama told his audience. “That’s his big solution.”

President Bush’s spokeswoman essentially sided with Mr. Obama in saying that tax holidays and new levies on oil companies would not address the long-term problems of dependence on foreign oil.

Dana Perino, the White House spokeswoman, said gasoline prices were “entirely too high, but I think it would be disingenuous and unfortunate for American consumers for them to be led to believe that there is a short-term fix.”

The Bush administration is too right about that, but it is also pushing the line that dependence on foreign oil could have been cut back if Congress had authorised exploration in the ANWR reserve. Bush himself talked about a million barrels of oil, daily, in his speech on April 29th, outtakes of which can be viewed on talkingpointsmemo. A reuters news analysis, via TPM, knocks that one down:

The Energy Information Administration, which is the Energy Department's independent analytical arm, estimated that if Congress had cleared Bush's ANWR drilling plan the oil would have been available to refiners in 2011, but only at a small volume of 40,000 barrels a day -- a drop in the bucket compared with the 20.6 million barrels the U.S. consumes daily.

At peak production, ANWR could have potentially added 780,000 barrels a day to U.S. crude oil output by 2020, according to the EIA.

The extra supplies would have cut dependence on foreign oil, but only slightly. With ANWR crude, imports would have met 60 percent of U.S. oil demand in 2020, down from 62 percent without the refuge's supplies.

Perhaps it is an even larger error to talk about this issue in isolation. Just last March, Bush noted that oil is a fungible commodity. That is to a large extent true, as long as there is a functioning global market for oil. If, say, Venezuela shifts its exports to China, that will displace some exports other countries make to China, which can then be shipped to the US.

But fungibility cuts more ways than one, and, accordingly, ANWR will have an impact on oil prices proportionate to its negligible impact on the global market for oil.

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Zyme on :

Can one of the american readers tell us what a liter of gas costs in the US now? Not a gallon - a liter of it. Then we can make a comparison and the americans might see with what price one can live with in Europe. Aside from that I recall reading a german article recently about foreign companies drilling holes in Germany to find oil. At first I considered it to be a joke, but there seem to be impure reserves that might be mined profitably now!

Álvaro Degives-Más on :

One: http://www.gasbuddy.com/ Two: http://www.convertunits.com/from/gallon+%5BUS,+liquid%5D/to/litre Bonus: http://www.pege.org/fuel/convert.htm

Pat Patterson on :

Actually Sen. McCain has put Sen. Obama in the difficult position of having to defend higher gas prices which are unpopular any time of the year but especially leading into the summer months when many families drive hundreds of miles for their vacations. Many people in Europe seem not to understand that the cities and suburbs are designed around the car and not some ancient precincet. In the US average mileage per year is 20,000, in the UK it's 10,000 and in Germany it's 8,400. Gas may cost more but driving less and driving generally much smaller, lighter and often more efficient cars doesn't mean that the Europeans are spending any more on gas than Americans are. Drilling in ANWR is merely one step in a long complicated step for US energy independence. As the technical problems are solved then other fields, deeper fields, open up. It's not just Alaska but some 75% of the known reserves still left in the continental US are off-limits under several acts of Congress. I have to use premium, 91 octane, most of the time and per gallon costs are rising above $4.00 so roughly a liter of gas in the US would cost $1.15. Occasionally I have to use 100 octane, autocross on the weekends, and that runs about $10.00 a gallon.

Zyme on :

Thank you for the numbers. That looks like a huge difference between 91 and 100 octane! Here ordinary 91 octane costs as much as 95 octane, around 1.45 € (2,25 $) per liter. 100 Octane are at around 1.59 € here, so not that much of a difference. I understand that americans need to drive more in daily life - but on holidays? Arent´t close range flights heavily subsidised in the US as well?

Elisabetta on :

Zyme: Close range flights are not heavily subsidised by the govermint and the discount airline industry as a whole is underdeveloped. With the new open-sky agreement perhaps one hopes that will soon change. The choice of a car for a holliday is really a cultural one. If I am traveling anywhere under 500 miles, it makes both financial and ulitiarian sense to drive. It is cheaper than the train and more efficient than flying; in addition, as Pat pointed out most American cities are built around the automobile, so unless you want to hang out in a 3 miles radius or take the bus you will need to rent a car anyway. People fly for big vacations, say vacationing in Fla from Mass. That is a 4000km drive, so they fly.

Pat Patterson on :

I should have been more specific, the highest octane gas, in California, you can get at the pumps is 91. 100 octane is not readily available and usually only one station in a 100 carries it regularly and when there are a lot of sports car races they run out.

quo vadis on :

The octane numbers aren't comparable. The US uses a different standard for octane than European countries.

Pat Patterson on :

91 octane is comparable to 95 octane in Europe so 100 octane gas here is 105 in Europe and only suitable for big blocks or high revving small blocks. In other words racing gas.

Joe Noory on :

Per liter it's averaging $1.06 for 91 octane +/-$0.06 for 87 or 93 octane. So that would be in the area of €0,67 +/-€0,04. Before you react, remember the kinds of distances and population density at hand, and the factor that self-employment and sole-propreitorship plays in services that require transportation and hauling: i.e. construction trades, specialty work, etc. Trucking, for example, involves a great many independent operators who own their own equipment rather than being wage or salaried employees of a trucking company.

Joe Noory on :

There are no direct or indirect subsidies that I'm aware of. I dn't think relatively light taxation as a subsidy. I have heard of smaller cities offsetting the gangway fees to lure airlines into bringing in routes that they want, but am not aware of anything more than that.

Nanne on :

Well, yes, that's the simplicity of 'there is such a thing as a free lunch, and here's a pony, too' politics, it's always popular to want to cut prices and it's hard to argue that preventing bridges from falling in is also important. Further incentivising consumption in a global market where the increase in oil prices is caused by demand outstripping supply is economic insanity. Unfortunately the level of economic literacy among the public and press is so low that such inane proposals keep doing well in Hillary Clinton's focus groups. The suburbs and exurbs in America are in for a big shock, by the way. You're already seeing that the main price decreases after the housing bubble collapse are happening in [url=http://www.npr.org/templates/story/story.php?storyId=89803663]areas with long commutes[/url]. The collapse of the housing bubble, the emerging recession and continuing price increases for oil are going to come at them simultaneously and knock a lot of them out.

Don S on :

Thanks for the link, Nanne. I have observed that also here in the UK. I work in Ipswich, about 70 miles NE or London. There is a newish suburb out here named Kesgrave, and prices here are dropping like a lead balloon (20-25% down from a year ago by my informal measurement. Yet in outer London where I live prices are down no more than 5% or so, if that much. The 'long commute' phenomena may explain the differential. Kesgrave is really a marginal commuting distance from London, with total journey time being perhaps 90 minutes to two hours one-way. So the commute may explain the drop.

franchie on :

"while not doing a darned thing to find alternatives to traditional oil and gas, and thus relieve the immense demand placed on those relatively scarcer resources" you say it, but in reality there are many researches that are made on alternative sources of energy : solar is one (south of France), wind also (relatively recent), geothermy fonctions already for more 30 years in Auvergne... the air cars (links in another message underneath) ; These alternative choices haven'nt been much priced so far because of their costs at the construction, while the electricity energy was ready to install. if you had read the Blooberg link about Allegre, you would have read that even our "lefties" don't price your globalwarmth gurus ; the nuclear energy as bringing lot of jobs, brings also lot of foreign money in France wallets... an idea ? to improve the reactors for exemple !

Álvaro Degives-Más on :

The following comments go to a relatively small share of overall oil and gas fuel consumption: transportation related consumption, both by consumers and commercial / industrial users. Nanne, there's an essential distinction between wanting to "cut prices" and looking at an existing [b]massive[/b] taxation of hydrocarbon based fuels. The former suggests indirectly some form of subsidy to make up for the difference between cost and sales price, the latter suggests shifting taxation revenues to elsewhere. And in Europe, vehicles are overall taxed to smithereens; it's not unusual to find countries (yes Netherlands, I'm looking at you) where the price of a new car practically doubles from leaving a European factory to leaving the car sales lot. And that's totally aside from stiff taxation per year - what in the US is a relatively nominal registration fee, is oftentimes a magnitude higher there. For a US resident, it's an astounding exercise to compare both gas and car prices here to those there. Bottom line: transportation fuel costs are artificially padded, big time in Europe. Now, up to a point, that may answer to a fundamental desire to regulate traffic circulation. But that point has long ago passed and made way to being a convenient tributary cash cow. So, again: in Europe there's [i]ample room[/i] for a debate (as much as it'll be academic in practice) about ways to alleviate the spiking costs of (specifically) gas / diesel, compensating loss of tax revenue elsewhere. In the US, such a "cutting cost" debate is a mostly academic exercise; yes, it's taxed, but nowhere close to the same galaxy as in Europe. That's why I think it's simply [i]dishonest[/i] to dismiss that possibility as somehow inherently and intrinsically linked to [i]subsidizing[/i] gas prices at the pump. Instead, it'd show more true energy and environmental conscience to engage the energy deficit in a more structural fashion, instead of couching it in conceited and hollow PC axioms, like forswearing the nuclear option (I'm still baffled how the "greens" in especially Germany and the Netherlands got their way, when I think about the sad Kalkar story!) and excessively focusing on hardly practical (as in: not-constant productive) renewables based on wind and solar. Geothermal is an option, and it's hardly contemplated, in spite of its accessible and now, due to high coupled gas and oil prices, even economically feasible alternatives. Aside from attempting to save energy consumption of course, which can't but be a limited approach. But it almost amuses me to see the hypocrisy with which France's 80% reliance on nuclear energy for its electricity generation capability is bought left and right (I believe Franchie already listed France's customers) while not doing a darned thing to find alternatives to traditional oil and gas, and thus relieve the immense demand placed on those relatively scarcer resources. There's a problem in the entire energy production chain; production, distribution and consumption are under an increasing strain, worsened as other countries develop their own appetite along with their economies. Until serious steps are taken, e.g. by attempting to substitute traditional oil products with supplements (Shell, Chevron and Sasol's GTL is a good step), it's going to remain dumb dabbling with a soaked towel while the faucet remains streaming wide open. I'll grant that "cutting prices" is more of an economic stimulus topic in Europe, than a serious / significant environmental step; but combined with a faster implementation of tighter emission standards, lowered transportation costs (by making new "clean" vehicles far more attractive) you can go a certain way of the path. There's so much wrong with the energy picture that a swarm of blogs wouldn't suffice. But I thoroughly reject the idea that the artificial high transportation costs in Europe are "sacred" and/or "etched in stone" because they're somehow aimed at protecting the environment. To use a technical energy term: that's unmitigated BS. There's simply no political willingness to come clean, concerning available resources and means to gradually build a path to sustainable, renewable and eventually truly zero-footprint energy cycles. Cutting cost is a necessary ingredient for that - but certainly not for the reasons you suggest. Cutting cost is necessary because in Europe the unexpected spiking oil and gas prices are threatening to throttle off its still (fortunately!) existing industrial and hence engineering capability; by comparison, here in the US so much has already been outsourced and moved out, that I see little spare capability to develop such a longer-term path. The US, sadly, has wasted so much time and siphoned off so much potential for government regulatory influence, that there's little left, but to hope for cheap imports of foreign solutions. I'm seeing how, here in Nevada, Solar One (at the moment, the world's largest solar energy generation field) has been taken over by a Spanish consortium; looking at the potential for solar, wind and especially geothermal, it's begging the question why the rhetoric of self-sufficiency hasn't achieved any traction. My conclusion is: because there's too little left to start over. Europe can turn the thing around, but only proviso it looks honestly at its pricing (and financing) structure, and at the ingredients that are inescapable and unequivocally necessary to build that road to sustainability. And if that takes smacking a few mad-capped "greens" around, well, so be it - that's at least [i]some[/i] rewarding amusement along the way. Again: "cutting cost" is not only possible, it's an imperative ingredient of the mix.

Nanne on :

There is no real connection between driving cars and protecting the industrial base in Europe -- except indirectly insofar as that industrial base is producing said cars. Energy taxes can be differentiated. They are in Germany, where companies that are taking part in the Emissions Trading Scheme are generally exempted. I think that is common practice throughout Europe. The Dutch tax on new vehicles is also differentiated, in order to incentivise the purchase of cleaner cars. Generally taxation of environmentally harmful activity can have a 'double dividend', by shifting distortionary taxes on entirely positive activity, like work, to activities that cause a lot of negative externalities that have not been priced in. I do not know the precise estimates, but I don't think that the negative externalities caused during a car's lifecycle have been fully priced in yet, even in the Netherlands. It makes little sense to talk about the burden on car drivers without taking the overall (long term) tax burden into account. Yes, in the Netherlands car drivers are taxed quite a bit. But the share government has of the gross domestic product is not higher than in other parts of Western Europe. Realistically, if you'd want to reduce the cost of driving you'd have to increase income taxes. Or other taxes. Or ramp up debt that will eventually have to be paid off.

Joe Noory on :

Remember, if you get rid of that older, dirtier car, bear in mind while behind the wheel of that Mercedes A-class, Prius, or Smart so "embedded with virtue" that someone else is driving your old beater around.

Nanne on :

It's indeed nonsense to think about car consumption as an issue of personal virtue. Only the aggregate of the entire fleet counts, and there are no environmentally virtuous cars available for purchase, all there is being more and less damaging vehicles. But cars are deeply emotional extentions of personality in our culture. And so the Prius has become a fashion item for the conscious-y consumer. It does help that the latest generation is an excellently designed and very practical family car. Most other 'green' cars bombed, and the Smart is still struggling to find real success.

Don S on :

Yes. I found it hilarious to see the 'taste-leaders' of Hollywood shifting from their Hummers into Priuses. But that will pall and they will shift into something else as soon as the Prius becomes common and un-'trendy'. One more thing - Arianna Huffington may feel virtuous driving around in her Prius, but doesn't her 20,000 sq foot mansion with swimming pool and AC throughout sort of outweigh any possible energy savings from her Prius, you think? It's the thought that counts, I'm sure. And an improvement on her Hummer/Navigator/whatever. But lets not nominate these people for sainthood just yet; they aren't setting a good example for the plebs just yet. No, the man I respect is Ralph Nader because he walks the walk as well as talking the talk.

Álvaro Degives-Más on :

That's a wonderful truism in your first sentence, Nanne - except nobody's arguing that. The "real" underlying connection that I was getting at is between having a significant industrial base and strategic self-reliance. Wholesale outsourcing is great for that elite upper 0,1% and not so good for the rest. But I'm not going to divert here on the crossroads of macroeconomics and politics. Yes, energy taxes can be differentiated. But like Mahatmas Gandhi said, in response to what he might think of British civilization: it's a great idea. But it's nowhere near differentiated enough to be effective in driving a path toward a future sustainable, renewable and zero-footprint model of energy cycle. Yes, the German model can be reasonably called "differentiated" but only if you're a tributary taxonomy geek. If one sets the objective of reaching such a clean energy loop, however, it's a different story. The nominal "differentiation" in the respective tax systems in for example Germany and the Netherlands reflects a lofty intent. Again, not to divert too much, but there's a key difference between "nudging" (e.g. by putting a premium, like on recycling or thrifty energy consumption patters) and eliminating barriers. And looking at the very, very costs of transportation (nevermind that indeed mass/public transportation fortunately is in a much better shape than, say, in the US) and the enormous taxation component that explains much of that, I say there's [b]ample[/b] room to refocus on the true purpose of taxation. Again, taxation of transportation has become the proverbial heroin to which politicians are addicted; in that context, it behooves politicians to reflect on the fundamental nature of collectively providing the foundations for a truly free moving society. Else, the massive but necessary investments in transportation infrastructure (e.g. the high cost of maintaining highways) end up as an imbalanced burden on a majority benefiting a disproportional minority. As to moving toward cleaner vehicles, a tax incentive to junk older (dirty) cars without dealing with the (mostly tax related!) costs associated with acquiring and operating a new clean fleet makes no sense. And that's the whole crux here: to point at the inefficacy of the current system as an impediment (or worse: as some kind of proof of its impossibility) for a more straightforward objective-oriented system is ingenuous at best. Euphemisms like "in the Netherlands car drivers are taxed quite a bit" don't help to shed a more realistic light on the true proportions of the imbalance in the distribution of the tributary burden, and its in my opinion dramatic inefficacy (which comes at an ultimately much greater expensive social cost of diminished willingness to shoulder them). You point at the necessity of compensating shifts in taxation; well, yes, that's precisely my point, too... In essence, my thesis on the current situation there is that on the one hand, freedom of movement is enormously handicapped, and on the other, that allocation of tax revenues and related expenditure within the field of (specifically) transportation is not sufficiently aligned to be effective if a key goal is to move toward a clean energy loop. And again: if one considers the collective amount of public expenditure as a given (why not - if only to simplify here), maintaining such overall homeostasis doesn't need to stand in the way of addressing an ineffective and ineffective imbalance in a given internal sector of economic activity. The difference here is between reluctance to address and willingness to overcome the status quo, which is embodied by the well-known evil trifecta opposing change: slow learning, fast forgetting, and organized resistance. My statement as fact that Europe is, overall, in a [i]better[/i] shape to embark on that path to a clean energy loop doesn't deny something else: that Europe is lazy.

Nanne on :

About half the people in the Netherlands live in what effectively is LA county. Talking about freedom of movement as a cost issue in that setting is illusory: if personal transportation with cars is made much cheaper we'll just add more to the gridlock. I would not argue that our taxation systems are perfect, I think that taxes on cars are on the one hand too low and on the other hand wrongly allocated (there should be far more taxation on old cars). In that sense you are right that there has to be a more honest discussion. Part of that honest discussion, though, has to be a recognition that [url=http://en.wikipedia.org/wiki/Pigovian_tax]pigouvian taxation[/url] is often a more effective instrument than direct regulation, is fair, and is likely to have an overall positive impact on the economy when the tax burden is offset elsewhere.

Álvaro Degives-Más on :

Freedom of movement is [i]illusory???[/i] I may be wrong, but I am getting the impression that you're confusing free as in "free beer" (delicious stuff from the draft anywhere in the Netherlands, by the way) with "freedom." [b]Of course[/b] transportation isn't and can't be gratis, especially in an extremely densely populated area as the Randstad (the almost contiguously urbanized area in the Western part of the country). And to be sure, any serious infrastructural project that attempts to facilitate transportation is bound to create big trouble - ranging from the hassle during construction, to opposition of those over whose land / home the projected transportation line is built, to escalating costs throwing budgets into disarray. It's a well-known complex issue in the Netherlands itself. But to curtail freedom to the point of virtually immobilizing a large group of people, which is the social equivalent of inbreeding, is outright scandalous and insulting. Yes, public / mass transportation isn't an easy subject, but no, shrugging it off as something "too difficult" is not an acceptable disposition for any self-respecting politician. It goes to my earlier conclusion: laziness, and political cowardice to boot.

Don S on :

"Now, up to a point, that may answer to a fundamental desire to regulate traffic circulation. But that point has long ago passed and made way to being a convenient tributary cash cow." Yes. I won't speak for continental europe because I don't know enough about it, but in the UK the punitive fuel taxes not only punish automobile drivers but also contribute to extremely high prices on public transport, particularly the trains but also the Tube in London, which costs several times the cost of a ticket in most german cities. Also the service is incredibly inefficiet, so much so that I've concluded that in terms of total costs (including lost time) running a private car is actually cheaper outside of central London, even for a single person. For a family the cost of using public transport is ridiculously higher than a car. If the aim were to get people into public transport the enlightened policy would be to use road tax and petrol duty revenues to massively improve the public transport network and subsidize the cost of tickets -instead they use it for general revenue.

Joe Noory on :

Simpler still, this nutty idea of having a "tax holiday" on fuel will only increase demand, do nothing for supply, and send the price higher. It may even cause a run on fuel. No - governments need to manipulate the markets foe basics like energy as little as possible, because without floating the price it can't really drop. Taxes on petrol in Europe were just that sort of attempt at constructing stability. As a result prices can only drop very little. Until social reasons for this were rationalized a decade ago, people hated it. As well they should. It was a heavy handed policy that robbed people with buying power and thus saving power. In fact the less you make, the more punitive it is.

Don S on :

I think that may be a typo, Zyme, or some kind of specialized fuel. Generally superpremium in the US (not sure what octane) sells at a similar markup to what you cite. But I could be wrong, I haven't purchased gas in the US for a long time. But that was my experience. Flights aren't usually directly subsidized, although they may be effectively subsidized by low airport charges and possibly low fuel taxes (as in much of Europe I think). American holidays frequently involve long car trips, which are usually cheaper and often take less time than flights do. The more people who travel the more sense the car makes. A four person family will seldom fly, for example. A simgle person or a couple may fly more often. Compared to Europe there are fewer 'city breaks' and perhaps more beach holidays and visits to national parks, but the kind of packaged holidays beach hols common in Europe are not as common in the US, as Americans often work out their own transportation arrangements.

David on :

Jonathan Alter has a good analysis of the political pandering behind the McCain/Clinton gas tax holiday in [url=http://www.newsweek.com/id/134856/output/print] Newsweek[/url]: "It will cost the U.S. Treasury at least $8.5 billion and probably much more, according to state highway officials. For McCain that's no money at all—merely one month in Iraq. For Clinton it's money she's already spent. She has said in the past that any proceeds from a windfall profits tax would go for renewable energy. The $8.5 billion figure assumes the tax would be reapplied after Labor Day. Fat chance. The one-year costs are probably closer to $30 billion." BTW, did Senator McCain explain how this will help fund his plan to occupy Iraq for 100 years ( or even 10,000 years, as he has said on occasion)?

Joe Noory on :

While you chase the rabbit of McCain's warning that history could leave the US military in the gulf for another century, would you have imagined Kennedy pulling them out of Berlin?

David on :

The big difference is: in Iraq they are destabilizing force. Five years ago today Commander Codpiece gave his infamous speech on the USS Lincoln under the "Mission Accomplished" banner. What have we gained in the past five years? What does McCain hope to gain in the next 100?

Joe Noory on :

From what I recall, Lincoln DID finish its' mission, but you appear not to have finished yours'. Are there any other random off-topic [url=http://www.bls.gov/news.release/empsit.nr0.htm]pet peeves[/url] that you need to get off your chest at the moment? Disappearing bees? Global warming?

Pat Patterson on :

I sense that at least one person here sees the possibility of a new Age of Aquarius more and more unlikely every day!

Fuchur on :

I wish we had a few Republicans in Germany, too. Over here, the default solution to everything seems to be to increase taxes...

Álvaro Degives-Más on :

Supposedly, that's the job of the FDP liberals / libertarians... I believe in truth in advertising. I'd sue them for fraud!

Fuchur on :

Ok, they are a bit of an exception. Sadly enough, they haven't been in any particular position of power now in quite a while...

Zyme on :

Of course a party like the FDP can´t get major support . People favor a strong state here - and they got it. To gain its allembracing strength it is eating up our money. But I don´t see this as such an ideological question as in the anglo-saxon sphere. The state isn´t a power-hungry monster eating up our income. It is merely distributed. Now I am no socialist per se. Instead the state here is simply representing the wish of the people to have their lives controlled and in order. The german amount of control and order simply have their price. Take taxes for example: The german word Steuern is far better in this context - Through taxes our daily life is "gesteuert". People are encouraged to certain kinds of behaviour in the economy and disencouraged from others. Now when 2/3 of the world-wide literature on tax laws is written in german you know that we have mastered the discipline of steering the people :D

John in Michigan, USA on :

On the environment-energy comments here, there are a lot of assumptions that simply aren't true. 1) We assume that fuel efficiency of personal transportation is the main problem. It isn't. It is not even close. Personal transportation (by car, bus, train, etc) is probably less than half of all transportation (shipping, fresh veggies, cheap or exotic stuff from all over the world). Worse: Transportation is only about 30% of all energy use. The rest is in manufacturing, agriculture, etc. If any country doubled the fuel efficiency of its entire fleet of cars, that would be considered an incredible, unbelievable success; yet it would only make the country 15% (30% divided by 2) less dependent on energy. In fact the benefit would be less than that, since people would use some of the savings to drive more miles or consume more public transportation. So transporting people is only a small part of the energy question. 2) Most of the energy used in a car (or bus, or train) is not used for fuel. Consider all the energy consumed by a car during its lifetime (including raw material extraction, manufacturing, maintenance, and disposal). The fuel for operation for the lifetime of the car (for all owners) is only about 30% of the total energy used. So buying a new car that is "better" for the environment is actually bad for the environment (you would spend 70% of the energy to save a fraction of 30%). If you really care about the environment, you should drive (and maintain) your current car until it dies beyond repair. Only after than should you buy a new, efficient car.

Álvaro Degives-Más on :

Good points, even while I think you injustly excluded the factors of cleaner and more efficient production methods and higher recycling efficiency. That is very much a part of what I'd call an intelligent and holistic approach to the systemic inefficacies at work within transportation-related sector. Even so, your larger point that transportation is but a slice of the pie to be addressed is absolutely correct and pertinent.

Nanne on :

It's unfortunate that oil and energy are equated so easily. While oil is fungible, energy, currently, is not. The markets for oil and for other forms of energy are different. One relevant difference being that a much greater percentage of oil is used for transportation (68% in [url=http://www.eia.doe.gov/neic/quickfacts/quickoil.html]the USA in 2006[/url]). In turn around 97% of the primary energy sources for transportation in the USA are based on oil, and only 2% of electricity is generated with oil (statistics [url=http://www1.eere.energy.gov/vehiclesandfuels/facts/2003/fcvt_fotw288.html]for 2002[/url]). Obviously we also need to talk about energy and energy policy. In some aspects, the way people talk about energy policy is not yet inclusive enough because food is also energy. But in terms of dealing with concrete current problems, step by step, transportation and electricity have to be dealt with [i]as such[/i] just as much as transportation and agriculture. Your second claim is false. Lifecycle energy use for cars is between 73% and 90% on fuel consumption. See this [url=http://www.pacinst.org/topics/integrity_of_science/case_studies/hummer_vs_prius.pdf].pdf[/url] (page 4-5). Note that if you increase the life of a vehicle, you will increase the share of its active life energy use.

John in Michigan, USA on :

Re my second claim - my claim was based on my memory of the book [url=http://www.natcap.org/]Natural Capitalism[/url] by Hawken, Lovins, and Lovins. I hope I remembered correctly! I will pull up my PDF's and get you an exact citation from that book as soon as I have a moment. I've only looked briefly at the PDF that you cited, it looks reasonable. I wonder what accounts for the different conclusions? Thanks for the information. I will look into it.

John in Michigan, USA on :

Well, maybe my memory is going bad. I can't find the 30% figure in Natural Capitalism (although I still highly recommend the book). The closest I can come to supporting my statement that fuel represents only about 30% of the total lifetime energy costs of a car, is this article in Slate by Peter Huber, [url=http://www.slate.com/id/2112806]The Art of Energy[/url]: "Fuel costs represent under 20 percent of the typical cost of driving—not because gas is cheap, but because we spend so much more turning the exploding gasoline into a safe, comfortable ride" The difference (20% vs. 30%) is because Huber is talking about energy cost, while I was trying to talk about units (Watts, etc) of energy. Huber has been writing about energy use for a while, and I am sure he has done research. However, in that article Huber doesn't provide any information about where he got that 20% figure, so I am unable to make any meaningful challenge to Nanne's well-supported claim that fuel is 73-90% of the lifetime energy cost of a car. I still think I'm not entirely wrong. I suspect the difference is in how you count energy use. For example: If it takes X amount of natural gas to melt raw steel and pour it into the mold for an engine block, we could convert X into the equivalent amount of gasoline or diesel fuel using formulas from a physics textbook. That approach would get you the 70-90% figure. However, if you instead counted all the energy required to extract, refine, and deliver that natural gas to the factory where it will be used to make engine blocks, you would get a figure closer to 20%. It all depends on your assumptions, and how you ask the question.

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