Starving the beast
One of the more interesting phenomena of recent history was part of
the fallout of the Asian economic crisis of 1998. The value of
currencies in the region collapsed, and the buying power of all local
(as opposed to export) industries fell with them.The fallout was not limited to improving the competitive position of Taiwanese computer parts manufacturers. One effect which surprised many at the time was the slump in the price of crude oil; it fell from its previous range of 15-20 USD/bbl to around 10. Production proved far less elastic than prices. The production in 1999 fell only slightly compared to 1998 despite much lower prices. (Production fell again in 2002, the last year on the list - but this time the price rose, indicating that demand had not fallen. At the time of this writing the dollar price is in territory not seen since the 1990 Iraqi invasion of Kuwait.)
What are the effects of this? One of them is to pull money out of investment and non-fuel consumption. The USA is currently using roughly 20 million barrels/day of crude; an increase from $24/bbl to $34/bbl means an extra $200 million/day in cost, or roughly $70 billion per year. This is small compared to the economy, but it is a large fraction (~1/7) of even this year's bloated US federal budget deficit. The effect on the oil-producing nations is similar. At 2002 production levels, OAPEC (the Organization of Arab Petroleum Exporting Countries) also produces roughly 20 million barrels per day, and reaps a similar $200 million/day in extra revenue from the price increase.
If that money had remained in the USA it would have been sufficient to create approximately 1.2 million jobs at $50,000 a year plus overhead. In the OAPEC countries it probably creates fewer jobs, but one cannot help but wonder if some does not go to fundamentalist madrassas and even less savory "charities" in SW Asia and elsewhere.
The USA is now spending over $100 billion per year to fix problems in just one country resulting from the ability of a dictator to monopolize that country's revenue stream from oil. Even before the 2003 Iraq action, roughly half of our defense budget (call it $180 billion or so per year) was spent to defend against threats from oil dictatorships and theocracies or to protect their product on its way to us (mostly from their immediate neighbors). They literally got us coming and going.
These threats are financed with the money we send them. Despite this, the Bush administration pushed faster business tax write-offs for gas-guzzling vehicles like the Hummer and Excursion than for more efficient light trucks and cars. There is a serious disconnect in Washington, where domestic policy creates effects which frustrate the goals of foreign policy and the need for defense to protect our interests are not counted as a liability of either.
We've created a monster, and the only thing we can do about it is to stop relying on foreign oil in general and Middle East oil in particular. As most oil goes for transportation, we need to aim at the same cars and trucks which have been fuelling the profits of the auto industry. This is not going to be an easy thing to do, but there is a point we have to keep in mind: this is war, and war entails sacrifice.
We are lucky for two reasons:
- Transport is one of the least efficient users of energy in our economy. The whole sector is loaded with low-hanging fruit, fat and ripe.
- The US consumption of motor gasoline alone is approximately 90% of the total output of Saudi Arabia. Changes made in the US have the potential to change oil markets worldwide, even swinging pricing power from producers back to consumers. Spread of the same technologies around the world could do the same many times over.
The search for the ultimate energy source has for a while been a hobby for some, nearly a religion for others. However, anything which requires a large change in infrastructure before coming into widespread use is just not going to make a difference soon enough to be useful. This includes panaceas such as hydrogen and fusion.
I am going to go out on a limb and suggest that our most important immediate goal is to displace petroleum motor fuels, and our best bet is to go partially electric. CalCars has been suggesting "depletion-mode" hybrids, which carry batteries both for surge power and regenerative braking as well as short-distance driving without using any fuel at all. If the average daily commute is 20 miles round trip, a mere 20 miles range on electricity would serve to eliminate petroleum consumption on a large fraction of all driving and take a big bite out of the fuel needs for the rest. Electric load peaks typically occur during the afternoon in most areas and seasons, so vehicles which take charges of a few KWH apiece overnight would require no upgrades of the electrical infrastructure (and increased profits from sales would help finance any which are required).
Consumer acceptance of such cars ought to be good. I'd want one just because it would be nice to have these features:
- Electric air conditioning running independent of any engine, for better performance in hot weather.
- Instant-on electric heat in cold weather, even electric pre-heat. Nobody likes getting into a cold car, and nobody would have to.
- Nearly silent operation until the sustainer engine came on (the better for hearing the stereo).
- Far less frequent visits to filling stations so long as the car is plugged in regularly.
