The Ergosphere
Monday, March 01, 2004
 

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:

  1. 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.
  2. 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.
When push comes to shove, we really don't care what makes our cars and trucks go.  Aside from gear-heads, most people pay little attention to what's under the hood of their car; some people barely know how their vehicles work, and do little aside from adding fuel.  A shift from oil to some other motive energy for vehicles needn't be any more difficult or traumatic than the shift from spermaceti to kerosene for lighting fuel.

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:

The US used about 38 quadrillion BTU of oil in 2002, roughly half of which went for motor gasoline.  If the average efficiency of gasoline-burning vehicles is 17%, that means that a complete replacement of petroleum auto fuel by electricity would require about 3.2 quads of electricity plus losses.  This is a large but not overwhelming requirement.  Some suggestions for getting it will be part of a future entry.  
Comments: Post a Comment

Links to this post:

Create a Link



<< Home
Talk largely about energy and work, but also politics and other random thoughts


Mail Engineer-Poet

(If you're mailing a question, is it already in the FAQ?)

Important links

The FAQ
Glossary
The Reference Library

Blogchild of

Armed and Dangerous

Blogparent of

R-Squared




The best prospect for our energy future:
Flibe Energy

ARCHIVES
February 2004 / March 2004 / June 2004 / July 2004 / August 2004 / September 2004 / October 2004 / November 2004 / December 2004 / January 2005 / February 2005 / March 2005 / April 2005 / May 2005 / June 2005 / July 2005 / August 2005 / September 2005 / October 2005 / November 2005 / December 2005 / January 2006 / February 2006 / March 2006 / April 2006 / May 2006 / June 2006 / July 2006 / August 2006 / September 2006 / October 2006 / November 2006 / December 2006 / January 2007 / February 2007 / March 2007 / April 2007 / December 2007 / January 2008 / May 2008 / June 2008 / August 2008 / October 2008 / November 2008 / December 2008 / February 2009 / March 2009 / April 2009 / May 2009 / June 2009 / July 2009 / August 2009 / September 2009 / October 2009 / November 2009 / December 2009 / January 2010 / April 2010 / May 2010 / June 2010 / July 2010 / August 2010 / September 2010 / October 2010 / November 2010 / December 2010 / January 2011 / February 2011 / March 2011 / April 2011 / May 2011 / July 2011 / August 2011 / September 2011 / October 2011 / April 2013 / November 2013 / December 2013 / January 2014 / February 2014 / March 2014 / April 2014 / July 2014 / August 2014 / September 2014 /


Powered by Blogger

RSS feed

Visits since 2006/05/11: