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
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.
US consumption of motor gasoline alone is approximately 90% of
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
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
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.
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.