We have a serious problem. America is addicted to oil
President Bush offered an amazing state of the union speech, amazing not necessarily for being complete, but even hinting at reality seems a good start.
http://www.nytimes.com/2006/01/31/politics/text-bush.html?pagewanted=print
Keeping America competitive requires affordable energy. And here we have a serious problem. America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology.
This short paragraph seems a mess to me, but I take the center as a useful admission - America is addicted to oil.
America uses 25% of the world's oil consumption, has 2% of the world's reserves, and produces 8% of the world's oil production.
When oil sold near $10/bbl in 1999, no one cared that we were "addicted to oil", but $60+/bbl in 2005 seems to have convinced the recovering alcoholic president that perhaps there's a problem here.
http://research.stlouisfed.org/fred2/series/OILPRICE/98/10yrs
There still seems to be a contradiction that a president must be an optimist for his people and an optimist can't necessarily tell people the truth they're not ready to hear. SO "Technology" is the best way to break our addiction? It is just nonsense at too many levels to even attempt to respond to.
...new technologies will help us reach another great goal, to replace more than 75 percent of our oil imports from the Middle East by 2025.
This is just another messy, messy statement, given a world oil market where ultimately it matters little where we get our oil from since we're taking it from somewhere, and so singling out the middle east is total total nonsense.
Our current imports from the middle east are perhaps 900Mb/year (of
US Oil Suppliers
Canada 584 Mb/a
Mexico 584
S.Arabia 548
Venezuela 475
Nigeria 402
Iraq 256
Angola 110
UK 110
Algeria 73
Kuwait 73
Other ~2000
Domestic ~2400
http://peakoil.net/Newsletter/NL51/newsletter51.doc
So you might say we import as little as 12% of our oil from the Middle East. So perhaps the president is asking for us to reduce our oil consumption by 9% (75% of 12%?) by 2025? 9% of current 21Mb/day is about 2Mb/day. So will we only be consuming 19Mb/day in 2025? I just don't begin to know how to interpret this goal, especially considering the estimates that Middle East oil are 2/3 of the world's "proved" reserves.
It's just crazy since in 20 years non-OPEC production will be long past peak production and we'll surely be importing much MORE than 12% of oil from the Middle East by then.
The reality is more likely that world oil production "won't exist" to meet our demands, much less the world's demands by 2025, and exporters who can avoid civil war or external takeover will be selling oil at prices we're only beginning to imagine possible.
A president who says we're addicted to oil ought to offer suggestions that can reduce this addiction by direct "cost" to those most addicted. We NEED higher prices for oil. We NEED a model that predicts higher prices in the future so we can PLAN for those higher prices.
A world "free market" for oil is GREAT when markets are expanding and production is expanding, but HORRIBLE when markets continue to expand as production plateaus and leans ever closer to the downward slope.
Whatever hope we have for a smooth "transition" from oil to alternatives ought to be abandoned, at least if we think "markets" will take care of this.
When the government wants people to stop smoking, it imposes high cigarette taxes, and this works, to degrees. And the tobacco market is certainly more stable than oil.
Either we "tax" ourselves to ween us away from dependence on oil, or we're just not serious about this weening. EVEN if oil now sold at $200/bbl, that'd not be a reason to reduce a consumption tax. In fact it would be a greater reason to keep the tax because ever small reduction in demand lowers market prices.
Hey, just like "trickle down economics", maybe the reverse is true as well "trickle down prices". If prices are higher consumption is lower, and prices are lower! The government can REDUCE prices by taking MORE money from the economy! What a win-win situation!
Anyway, I'm glad our president has offered America the word "Addiction", and its a start. I'm still a pessimist about the future, about our collective will to save ourselves from our addiction. There's still economists out there who dare assert that higher prices will take care of themselves, so there's nothing to do but party until the party is over. Meanwhile here's money to be made and so we all should INVEST in the problem so we'll personally have the wealth to handle the coming chaos!
I'm hopeless about government action too at least. So I'm at least glad "the word is out", and individuals can respond as we can.
I say "Get out of debt", "Live, work, and shop close to home", and "Be prepared for a lower standard of living" that will be needed in our "market oriented" transition of "demand destruction."
I feel for those on the bottom who are not able to be prepared for economic chaos. I don't even think anyone can be prepared except for living frugally, investing in ways that reduce future energy usage, and hence future income demands.
Being a pessismist is not a good place for a public message. President Carter tried it, gave the exactly correct message (for the long term picture), but addicts don't want long term predictions. They can't look past 5 years, much less a future that is nothing like the recent past. Only the great depression of the 1930's may be close to our future, and we had plenty of energy then, so our new problem is likely to be very different still.
Thank you Mr. President. You've rang the bell. The race is set, and we've all got time to make peace with our maker before the shit really hits the fan.
Houston, we have a problem. Think Apollo 13. Technology will "save" us, because we're inventive and adaptive to problems, but don't expect it to save all of us. We've not yet turned back around the moon's far side, and we don't yet have a plan to even survive the return journey.
Powerdown, conservation MUST also be a part of the solution, Mr. President.
http://www.nytimes.com/2006/01/31/politics/text-bush.html?pagewanted=print
Keeping America competitive requires affordable energy. And here we have a serious problem. America is addicted to oil, which is often imported from unstable parts of the world. The best way to break this addiction is through technology.
This short paragraph seems a mess to me, but I take the center as a useful admission - America is addicted to oil.
America uses 25% of the world's oil consumption, has 2% of the world's reserves, and produces 8% of the world's oil production.
When oil sold near $10/bbl in 1999, no one cared that we were "addicted to oil", but $60+/bbl in 2005 seems to have convinced the recovering alcoholic president that perhaps there's a problem here.
http://research.stlouisfed.org/fred2/series/OILPRICE/98/10yrs
There still seems to be a contradiction that a president must be an optimist for his people and an optimist can't necessarily tell people the truth they're not ready to hear. SO "Technology" is the best way to break our addiction? It is just nonsense at too many levels to even attempt to respond to.
...new technologies will help us reach another great goal, to replace more than 75 percent of our oil imports from the Middle East by 2025.
This is just another messy, messy statement, given a world oil market where ultimately it matters little where we get our oil from since we're taking it from somewhere, and so singling out the middle east is total total nonsense.
Our current imports from the middle east are perhaps 900Mb/year (of
US Oil Suppliers
Canada 584 Mb/a
Mexico 584
S.Arabia 548
Venezuela 475
Nigeria 402
Iraq 256
Angola 110
UK 110
Algeria 73
Kuwait 73
Other ~2000
Domestic ~2400
http://peakoil.net/Newsletter/NL51/newsletter51.doc
So you might say we import as little as 12% of our oil from the Middle East. So perhaps the president is asking for us to reduce our oil consumption by 9% (75% of 12%?) by 2025? 9% of current 21Mb/day is about 2Mb/day. So will we only be consuming 19Mb/day in 2025? I just don't begin to know how to interpret this goal, especially considering the estimates that Middle East oil are 2/3 of the world's "proved" reserves.
It's just crazy since in 20 years non-OPEC production will be long past peak production and we'll surely be importing much MORE than 12% of oil from the Middle East by then.
The reality is more likely that world oil production "won't exist" to meet our demands, much less the world's demands by 2025, and exporters who can avoid civil war or external takeover will be selling oil at prices we're only beginning to imagine possible.
A president who says we're addicted to oil ought to offer suggestions that can reduce this addiction by direct "cost" to those most addicted. We NEED higher prices for oil. We NEED a model that predicts higher prices in the future so we can PLAN for those higher prices.
A world "free market" for oil is GREAT when markets are expanding and production is expanding, but HORRIBLE when markets continue to expand as production plateaus and leans ever closer to the downward slope.
Whatever hope we have for a smooth "transition" from oil to alternatives ought to be abandoned, at least if we think "markets" will take care of this.
When the government wants people to stop smoking, it imposes high cigarette taxes, and this works, to degrees. And the tobacco market is certainly more stable than oil.
Either we "tax" ourselves to ween us away from dependence on oil, or we're just not serious about this weening. EVEN if oil now sold at $200/bbl, that'd not be a reason to reduce a consumption tax. In fact it would be a greater reason to keep the tax because ever small reduction in demand lowers market prices.
Hey, just like "trickle down economics", maybe the reverse is true as well "trickle down prices". If prices are higher consumption is lower, and prices are lower! The government can REDUCE prices by taking MORE money from the economy! What a win-win situation!
Anyway, I'm glad our president has offered America the word "Addiction", and its a start. I'm still a pessimist about the future, about our collective will to save ourselves from our addiction. There's still economists out there who dare assert that higher prices will take care of themselves, so there's nothing to do but party until the party is over. Meanwhile here's money to be made and so we all should INVEST in the problem so we'll personally have the wealth to handle the coming chaos!
I'm hopeless about government action too at least. So I'm at least glad "the word is out", and individuals can respond as we can.
I say "Get out of debt", "Live, work, and shop close to home", and "Be prepared for a lower standard of living" that will be needed in our "market oriented" transition of "demand destruction."
I feel for those on the bottom who are not able to be prepared for economic chaos. I don't even think anyone can be prepared except for living frugally, investing in ways that reduce future energy usage, and hence future income demands.
Being a pessismist is not a good place for a public message. President Carter tried it, gave the exactly correct message (for the long term picture), but addicts don't want long term predictions. They can't look past 5 years, much less a future that is nothing like the recent past. Only the great depression of the 1930's may be close to our future, and we had plenty of energy then, so our new problem is likely to be very different still.
Thank you Mr. President. You've rang the bell. The race is set, and we've all got time to make peace with our maker before the shit really hits the fan.
Houston, we have a problem. Think Apollo 13. Technology will "save" us, because we're inventive and adaptive to problems, but don't expect it to save all of us. We've not yet turned back around the moon's far side, and we don't yet have a plan to even survive the return journey.
Powerdown, conservation MUST also be a part of the solution, Mr. President.
posted by Ares Olympus at 11:29 PM
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