The Ergosphere
Friday, April 29, 2005
 

It's all gas

I listened to Bush's press conference last night with a growing sense of frustration and irritation.  Does the man know nothing?  Is he unable to see how his own policies have accelerated us to the crisis we now face?  Or is he just a sociopath like Clinton, able to say whatever serves his immediate purpose with all apparent sincerity?  Regardless, what he said wasn't right; to the extent that it wasn't irrelevant, it was some of the worst political posturing I've listened to since Clinton's talk about firearms and interns.

One comment that really got to me was Bush's anecdote of the soldier who asked him to lower the price of gasoline.  Bush's response was that this was beyond his abilities.  Well, of course it is... now.  But was it always?  Had I been there and able to interrupt, I would have had to ask "Mr. President, the high price of gasoline is due to high world demand for oil and an excess of gasoline demand over refining capacity in the USA.  We used to have programs to do something about that.  But didn't you cancel the Partnership for a New Generation of Vehicles, and didn't you sign tax breaks which encouraged people to buy gas-guzzling trucks for business use whether they needed them or not?"

Among Bush's first acts in office, he cancelled a program which was ready to produce highly economical vehicles in the very near term; he substituted a hydrogen-vehicle program which is still unlikely to yield products before 2015 and will require tens or hundreds of billions in new infrastructure to support.  The first-year tax writeoff for vehicles over 6500 pounds used in a business helped to run up gasoline demand, creating windfall profits for gasoline refiners.  He also funneled a bunch of research money to the auto companies for the long term.

Was it worth it?  Here's what we lost:

  1. Valuable capacity margins in fuel refining.
  2. A better situation with regard to foreign exchange.
  3. An American hybrid program which would have been market-ready by now.
  4. Domestic vehicles ready to be converted to Calcar-like plug-in hybrids.
  5. A ready response to high world oil prices.
  6. Product lines at domestic manufacturers ready for the shift in consumer demand.

We should be so much further along than we are.  PNGV vehicles like the Daimler-Chrysler ESX3 were delivering 72 MPG back in 2000.  The diesel engines might not have met new EPA NOx standards, but so what?  Even if they had to be powered with gasoline engines and some of the more expensive technologies had to be left off, it is hard to see how the ESX3 and its like could have achieved less than 50 MPG.  With the addition of removable battery packs, such cars could have operated entirely on grid power for short trips while maintaining their cargo capacity and highway fuel economy; experiments with the Toyota Prius have shown that this can be done by dedicated amateurs.  But they've got to buy Japanese cars to do it, because Bush decided that his predecessor's program wasn't politic.

Bush's idea of an energy policy seems to be to:

None of these initiatives affects anything where the rubber meets the road.  None of them are going to do anything for the budget deficit or our balance of trade.  Arguably, none of them are going to improve our situation; they are just going to create financial empires based on government largesse.

Bush ought to have expertise in the oil business.  He ought to have seen all of this coming; he certainly knew the right people to ask for advice (and if he didn't, Cheney did).  He should have known what programs should have been kept on the back burner for the sake of the nation and our domestic industries.  He was only too happy to use largesse (e.g. tariff barriers on steel) to buy votes, but he could have made it go much farther with some statesmanlike vision.

We didn't get it.  What we got instead appears to be programs designed for the benefit of a favored investor/CEO class and the very foreign oil interests who are waging religious war against us.

This isn't leadership.  Neither is it patriotism.  And when the American people figure this out (probably about the time the Democrats break with the forces of P.C. and get serious about national security), there's going to be some mighty big scores settled in Washington.

Either that, or the USA becomes one more banana republic.

[1] Ethanol from corn appears to be a loss, energy-wise.  A recent paper claims that it's bad for just about everything it touches.  Corn (maize) is planted, cultivated, sprayed and harvested with petroleum products, fertilized with nitrogen fixed using natural gas, and the ethanol product is distilled using more natural gas or petroleum-derived propane.  This does nothing for our security; due to the cost of natural gas, even our nitrogen fertilizer is now imported.  The only purpose served by these subsidies is to transfer taxpayer dollars to the pockets of those chemical producers and agribusiness interests like ADM, with a little trickling down to the farmers almost by accident.  If Bush wanted to cut the price of gasoline, he could push to eliminate the use of ethanol in gasoline and pay farmers to idle some of their acreage instead; all the fuel the farmers are using on that idled land would make motorists happier.  And that could be done in time for this year.

 
Comments:
From a strict policy perspective the PNGV initative was a crock. If this country really wanted to reduce its oil consumption, a gas tax would be by far the best policy. It has certainly worked in other countries. Given the cultural reality in this country, I suppose it is the best thing that could be done, but it still sucked. Eliminating PNGV was one of the few things that the Bush administration has done that is in line with the market-oriented beliefs it professes to hold.

"He ought to have seen all of this coming; he certainly knew the right people to ask for advice"

The Bush administration knows exactly what is going on and just doesn't care. There is no intention of implementing any policy that doesn't preserve or enhance the CEO class's hold on power.

"Or is he just a sociopath like Clinton"

Ok, that's a wee bit much, given Clinton implemented substantially more good policies that Bush has so far, and suggested even more, including a broad-based carbon tax. You may not like how Clinton conducted his personal life (I don't approve of it, but it is hardly outside the norm) but he certainly left the country in better shape than when he started governing, which is something Bush can't say.
 
Patzek's isn't the only paper out there; the problem is aligning all of them. All the authors of such papers, so far as I have been able to tell, have agendas. All of them contradict each other, and of course the ones coming out of the USDA claim Patzek's numbers are based on old data.
 
Journey to Forever has the relevant links pro ethanol.
 
Why shouldn't I blaime Daimler-Chrysler for not putting their hybrid into production?

I mean, it sounds like they did the basic research (netting 72 mpg) and it was the company's turn to take it to market.

I do think we have some dumb priorities, and the national government has made some goofs ... but part of the blaime rests with Detroit for going with the easy sell: "bigger" and "more power".

I'm sure they thought making a bunch more 345 HP Ram pickups was an easier way to profit.

- odograph
 
Eliminating PNGV and starting a hydrogen-vehicle program cancels each other out, market-wise.  So far as technology goes, it really looks like a delaying action to prevent the marketing of technologies which could reduce or eliminate the need for oil.

I've been thinking about plug-in hybrids since the early 1990's; it wouldn't surprise me if Bush/Cheney killed the PNGV precisely because hybrids would allow a relatively fast transition away from gasoline for most miles driven.  Of course, we're unlikely to learn what they were thinking or even talking about for years, if ever.

Rob:  if the USDA (a department with an innate bias if I ever saw one) has better figures, it should publish them.  From what little I've read of Pitzek et al, it looks like they've covered enough bases to have made a very good case.

Anonymous:  We don't wait until we go to war to make guns and fighter planes; the government buys things in advance.  Neither should we sit and wait for the solutions to other national priorities to become so pressing that a popular stampede is already underway.  The problem of Wahhabi extremism made itself abundantly clear in 1993, and also that it was funded by oil revenue.  Even if Rams and Escalades were selling well, that was no excuse for funding them with accelerated tax writeoffs and killing the alternatives we were certain to need sooner or later (and sooner it was).

I was happy to see the reaction to Clinton's opportunistic politics, and I'm hoping to see outrage at Bush's craven pandering to the oil industry.  I have no reason to love a Democratic congress over a Republican one (both sides attack things, including personal freedoms, that I hold dear) but it's past time for the GOP to be chastened in its turn.  When you sell out the national interest, you deserve to get burned.
 
I think the business writeoff for heavy vehicles, regardless of their actual use (as mom's car), is a grotesque example of energy pork. Obviously.

But when we go into the next "cycle" on this energy stuff, what is going to be effective?

On the last cycle Detroit took our money, did that research, and then built a bunch of gas hogs for the market. And yes, with the knowledge that many of those gas hogs would qualify for the heavy vehicle loophole.

I sure as heck don't want to reward that with MORE research money. This whole energy field is already corrupted and distorted by too much money to too many net-negative constituencies.

The answer is to tax fossil fuels. Period.

That will drive consumers toward more efficient cars, and I'm sure Detroit has the budget and technology (even if they don't currently have the will) to design and build them.

Again, look at what they already sell in Europe. If we swapped Ford/GM's European fleet for their US fleet we'd get ... probably between a 50% and 100% if fuel economy, immediately.

They don't need our tax dolars, they need a kick in the pants.
 
BTW, I trust research money going to universities and national labs. Basic research needs funding.

I'm just want to cut Detroit off completely.
 
What exactly is it that makes ESX3 so superior to todays hybrids? Bigger battery, or what?

Also, do you have any insights on the energy cost of battery manufacturing? I've heard it asserted that the energy consumed in making a hybrid or straight-electric battery outweights several years worth of savings...
 
EP: Not sure what you mean. Journey to Forever has the links to a bunch of different studies, including several USDA ones. Yes, allow for bias, but also consider that Patzek may have his biases, too.
 
David:  I suspect that the advantages of the ESX3 come from the weight-saving techniques like the "sparseframe", the diesel engine and the lithium-ion battery.  You could replace the diesel with spark-ignition at a reasonable penalty.  I don't see why the "sparseframe" couldn't be applied to every-day production.

I couldn't tell you where the costs of NiMH and Li-ion batteries come from, but given the fairly rapid decline in their prices over time I will wager a pitcher of good beer that energy makes up a relatively small part, and greater volume and improved manufacturing techniques and machines can take big bites out of the non-material costs.

Rob:  Unfortunately, if I don't have the time to read Pitzek I'm not going to have time to read the rest of those papers either.

It looks like I'm about to have more money but less free time.  This is likely to mean less blogging.
 
Excellent post.

The solutions to our energy challenges do not lie in more government pork for agribusiness and automakers.

Polticians the world over need to get beyond the "not during my term" mentality.
 
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